5 Difference Between Base Salary & Total Compensation

Salaried employees are paid a fixed amount each payday. This amount is called “base salary.” Depending on your employment agreement, your base salary may not represent your total compensation. This would happen if you receive benefits or other types of payments in addition to your base salary.

The salary employees are the ones who are paid regularly within the period of fixed tenure. Depending on the employment of the agreement the salaries are based on the experience of the employees and their representation in the market. The salary-based employees are given different compensations in order to combat the company differences and gives them leverages for the same purpose. The base salary sometimes leads to the differentiation of various compensations. This article sheds light on the major difference in the base salary and salary compensation.


The compensations are never straight forward. Many of the perks are hidden in it. The payments may not always be contained separately. The commissions, bonuses, fringe perks and advantages are not always explicitly given out in hand. They are deemed as silent features which may be availed upon the need or want of the employee. The paid vacations are one of the sought advantages which is found rarely. Relocation reimbursement, tuition fees, retirement benefits, and stock options are also considered decent incentives alternates.

Varied Compensation Package Value

The value of the compensation packages is never the same. It fluctuates depending on the employee as well as the employee. The executive and the commercial employees have fluctuating compensation depending upon their skills and regular packages. According to the articles published in the journal five out of seven companies surveyed have an unequal share of compensation.

Taxation Rules

The government instead of cutting taxes on the individual companies have this rule of not putting the burden on the company itself. They have got it distributed, on the individuals very well. The taxations are not only liable for the companies only. This is why the pays are taxed while the compensations arenโ€™t taxed. The small gifts and the awards are secured from such forms of government taxations to grant the employees a chance to enjoy their jobs. The taxable portions are then put channeled in the respective order of the priority.

Special Considerations

The companies need to convey and make tier employees understand the true crux of the compensation. The special considerations include sessions specially to make them understand the limitations of the compensation plans that they have set out. This can vary depending on the age group of the employees. For instance, the retirement policies can be explained well to the age group from 50 to 60 onwards (The age where the employees are likely to get retired).


Communicating compensations is hard

Communication is the key to any organization. The employees should know how much are they rewarded. The pays and the basic salary should be mentioned separately. They are good to differentiate between different set of payable schemes. This is so to make the calculations easy for the employees so they donโ€™t have to take out their calculator every time they get paid, either in the form of pay or compensation.

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