Employee compensation refers to the total amount of money and benefits an employee receives in exchange for their work. This includes base salary or wages, bonuses, health insurance, retirement benefits, and other perks and benefits.

Example

An example of employee compensation is an employee who earns a base salary of $50,000 per year, receives an annual bonus of $5,000 based on their performance, and has access to a company-provided health insurance plan and 401(k) retirement plan.