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Glossary of Human Resources Management and Employee Benefit Terms
Remuneration is a multifaceted concept that plays a crucial role in the world of employment and compensation. It encompasses all the ways in which individuals are rewarded for their work or services within a company or organization. Beyond just basic salary or wages, remuneration includes a wide range of financial and nonfinancial benefits, each designed to recognize and motivate employees.
Remuneration refers to the total compensation or rewards that an individual receives in exchange for their services, work, or employment with a company or organization.
Types of remuneration can be broadly categorized as follows:
According to the Internal Revenue Service (IRS) in the United States, remuneration is a term synonymous with wages when it comes to taxation. It refers to the total amount paid by an employer to an employee for their services or work. This includes all forms of compensation, whether they are labeled as salary, hourly wages, bonuses, commissions, or any other payment made to the employee in exchange for their work.
For tax purposes, the IRS considers remuneration as the sum total of an employee's earnings, including not only their regular pay but also any additional forms of compensation, fringe benefits, and taxable allowances or reimbursements they receive from their employer. These earnings are typically subject to federal income tax, Social Security tax, and Medicare tax withholding, as well as state and local income taxes, where applicable.
The difference between salary and remuneration:
A salary refers specifically to the fixed, regular, and typically monthly or bi-weekly payment that an employee receives from their employer in exchange for their work or services. Whereas remuneration is a broader term that encompasses all forms of compensation and benefits that an individual receives for their work or services. It includes both financial and non-financial rewards.
Salary represents the core or base component of an employee's compensation package. It is a predetermined and consistent amount of money that an employee can expect to receive for their work, regardless of performance or hours worked.
Whereas remuneration includes not only the base salary but also additional forms of financial compensation like bonuses, commissions, overtime pay, and other perks and benefits such as health insurance, retirement plans, allowances, and non-cash incentives.
The factors affect remuneration policies:
Here's how remuneration typically works:
These are short surveys that can be sent frequently to check what your employees think about an issue quickly. The survey comprises fewer questions (not more than 10) to get the information quickly. These can be administered at regular intervals (monthly/weekly/quarterly).
Having periodic, hour-long meetings for an informal chat with every team member is an excellent way to get a true sense of what’s happening with them. Since it is a safe and private conversation, it helps you get better details about an issue.
eNPS (employee Net Promoter score) is one of the simplest yet effective ways to assess your employee's opinion of your company. It includes one intriguing question that gauges loyalty. An example of eNPS questions include: How likely are you to recommend our company to others? Employees respond to the eNPS survey on a scale of 1-10, where 10 denotes they are ‘highly likely’ to recommend the company and 1 signifies they are ‘highly unlikely’ to recommend it.
Remuneration affects taxes as:
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