Types of Compensation
Total compensation indicates that an employee is making two or three times his base salary. A company may inform you that you are receiving additional compensation, yet rarely discloses the full amount compensated during the entire year.
Typical Benefits Included in Total Compensation. When looking at total compensation, companies offer common types of benefits. Typical compensation packages include health insurance, performance bonuses, vision and dental insurance and retirement plans. Each of these has a cost to the company and a value to the employee. The values of these plans sometimes are not reported to the employee. Similar rates may not be available to you, if you're paying for your own health, vision or dental plans.
In this lesson, you'll learn about merit pay, piece rate pay, commissions, bonuses and skills-based pay and how they help achieve this goal. Incentive Compensation Defined Hanna is a human resource specialist for a large corporation.
A sales commission is a sum of money paid to an employee upon completion of a task, usually selling a certain amount of goods or services. Employers sometimes use sales commissions as incentives to increase worker productivity.
The federal overtime provisions are contained in the Fair Labor Standards Act (FLSA). Unless exempt, employees covered by the Act must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay.
Stock compensation refers to the practice of giving employees stock options that will vest, or become available for purchase, at a later date. Stock compensation refers to the practice of giving employees stock options that will vest, or become available for purchase, at a later date.
Payments received by U.S. Government civilian employees for working abroad, including pay differentials, are taxable. However, certain foreign areas allowances, cost of living allowances, and travel allowances are tax free. Pay Differentials. Pay differentials you receive as financial incentives for employment abroad are taxable.