Remuneration

Remuneration is the total amount of money that a worker gets from his or her employer. This amount of money consists of base pay, commission payments that a seller receives from own sales, extra payments for staying after working hours and other benefits to which an employee is entitled.

There are extra payments or special goods that are provided by a company for workers, such as gym right at the working place, vacation plan, etc. These perks may be or may not be included in the remuneration of workers. It’s worth noting that tips are considered remuneration as well.

What affects Remuneration

The level of remuneration a worker can receive is affected by the following factors:

• The worker’s value. In case the worker has unique skills that are extremely useful for a company, the possibility of receiving bonuses for such workers is higher.
• Type of the job. Some workers get an hourly wage, some receive a fixed salary, while others are entitled to commissions, tips and other kinds of bonuses.
• The business model of a company. Some companies have a wide bonus program for their workers. Such programs usually include stock options and other types of bonuses. However, it should be taken into account that not all companies develop such programs. Some consider it too difficult to put into practice.
• The economy in general. In situations when there are numerous work positions and a lack of skillful workers, companies start to search for the greatest candidates. In this case the amount of remuneration is expected to be higher.

Types of Remuneration

Remuneration may be expressed in many different ways. It may be salary, commission, tips, sick pay, reimbursement of business trips, etc. However, there are several distinguished types.

Golden hello. Golden hello is a type of remuneration that is offered to a person in order to lure him or her into a new job. For example, the person demonstrated incredible skills working for a company. Thus, another company decided that his or her skills are highly requested for the current company’s tasks or in general. The money is usually paid before the person enters the company or at the time he or she starts working.

Golden parachute. Golden parachute is supposed for top executives. It’s given in case the company for which an executive works is taken over by another company and consequently the executive is terminated. This condition may be included into the contract before the person starts working.

Deferred compensation. Deferred compensation is an amount of money that can’t be received at once, an employee gets it later. Taxes are paid later as well. Usually, such compensation includes retirement plans, stock-option plans, etc.

Company’s benefits. Usually, but not always, firms provide their workers with special benefits. Such benefits may include health insurance (which covers a certain percent of medical expenses of an employee), access to a company gym, permission to use a company car, etc. The amount and presence of benefits depends on a company and type of job.

You should remember that all kinds of remuneration are subject to taxation.

What is the minimum wage

An employer is obligated to provide his or her salaried employees with a decent salary. For this purpose, the minimum amount of money the employer must pay to his or her employer is set. This amount is called the minimum wage; it's the lowest remuneration.

The minimum wage differs from country to country. For example, in the U.S. the federal minimum equals 7.25 dollars. In Australia it’s almost twice higher and equals 14.52 dollars, while in Japan the minimum wage is similar to the U.S. minimum wage and equals 7.52 dollars.

Employers aren’t obligated to pay according to the minimum wage level always. Exceptions are restaurant waiters, seasonal workers, students, etc.