Total Compensation

Total compensation is a term used to describe all forms of monetary payment an employee receives. For existing employees, this usually includes base pay plus incentives. For newly hired employees, total compensation in the year they are hired may also include a sign-on bonus.

Total Compensation = Base Salary + Incentive Compensation

Total compensation can also refer to the total value an organization offers an employee, not just the monetary payments. This can include job perks with a monetary value, along with employer-provided benefits like vacation time, holiday pay, health insurance, dental plans, life insurance, and tuition reimbursement.