What is remuneration?

Remuneration is the payment or compensation offered to a person for the provision of a service at a specified time and in a specific place. This salary concept is also known as wage, pay or salary, which is the payment or the nĂ³mina that is offered to a worker by his employer to fill a vacancy in his company. However, it is also possible to speak of the concept of remuneration in the field of banking products (such as the remuneration of a deposit or a checking account), or in commercial agreements (freelance workers).

Types of remuneration

Regarding salary agreements, we speak of remuneration when we refer to the benefit or reward that an employee may receive from the entity that issues the payment. Let's see, next, the different types of remuneration that exist:

  • Salary performance: it is a type of remuneration formed by the salary and its different components, including the checkbook and diets.
  • Remuneration in kind: these are all those social benefits that an employee receives from the company and for which he should not pay directly, such as health insurance, housing payments, pension fund, the restaurant check, etc.
  • Extraordinary remuneration: it is the reward obtained by a person who has excelled in some aspect within a company or organization. This is the case, for example, of bonuses, prizes or gifts that a boss gives to his brightest workers.
  • Other forms of remuneration: the employer can offer and extend vacation days or days off for its workers, or offer corporate childcare for the benefit of their descendants.

How are remunerations classified?

Depending on its format and reason for being, remunerations are classified according to the following types:

  • Ordinary, extraordinary and special: ordinary remuneration is the result of the remuneration for the services provided, while extraordinary remuneration is those that are offered sporadically (bonuses or overtime). On the other hand, special remunerations are those that are granted in the event of meeting specific conditions, such as bonos, prizes, gifts, etc.
  • Fixed and variable: on the one hand, fixed remuneration is understood to be those received by the employee in a given period of time, being fixed to the extent that his salary does not vary in his pay periods; on the other hand, variable remuneration is one that contemplates the possibility that the monthly result is not the same from one month to another.
  • Principal and accessory: a remuneration is principal when it responds to the contraprestación agreed in the employment contract, while a remuneration is ancillary when it is calculated on the main remuneration, as is the case of the payment of overtime worked by the worker.

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