Total compensation includes all benefits, including the base salary of an employee.
We have all felt underpaid at some point. You look at your paycheck, seeing how much you made in salary during a period. You see the price of items going up around you, feeling that you've lost your purchasing power. Yet, you do receive other compensation from your job. Total compensation is your base salary plus all your benefits.
Base Salary
Base salary is what you see on your paycheck. It is the amount per hour or per year that you are paid for performing your job. Base salary does not include any bonuses, benefits or perks associated with the job. It increases with raises or adjustments, but remains the yearly or hourly wage paid. Base salary is typically the number you say when people ask you how much you make -- what you are paid.
Total Compensation
Total compensation is everything the company provides an employee in exchange for working. It includes base salary, bonuses, benefits, perks and on-site amenities. 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. This lack of disclosure often leads employees to feel underpaid for their time and services.
Related Reading: What Is the Difference Between Annual Compensation & Pay?
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.
Unusual Benefits in Total Compensation
Companies have many unique ways to compensate their employees. These may be low-cost, yet can increase the total value of the work output. On-site child care, gym memberships, casual dress codes, flexible schedules and prizes are all ways that companies compensate employees. You may not see the value of these benefits listed on your paycheck. The total compensation of these benefits, however, may include savings in time, worry and stress.
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