Compensation and Benefits

Meaning & Definition

The Compensation and benefits are the combination of both pay and non-pay components of compensation. Compensation refers to direct monetary payments for work performed (i.e., the employee’s salary, commission, bonuses, etc.), while benefits include non-monetary items (i.e., the employee’s pension plan, health insurance, sick leave, etc.). Together, the total compensation and benefits package is an important consideration in attracting and retaining quality employees.

Important features include

• Offers Compensation that is Fair, competitive and motivating to employees.
• Provides employees with equal pay, supported by employee satisfaction and engagement.
• Provides internal equity and external competitiveness with like positions in similar organizations.
• Creates a strong Company Brand, resulting in a stable workforce and improved company performance.

Compliance Requirements

Minimum wage laws are a requirement for the payment of wages under all circumstances, including industry rates. 

The Payment of Wages Act, 1936, requires employers to pay wages according to established timescales. The Payment of Gratuity Act, 1972, provides certain eligibility criteria for gratuities.

Employees may be taxed on their salary and on payments made or received through TDS (Tax Deducted at Source).

While statutory benefits must be provided by employers to their employees, some companies also provide other types of benefits based on their own policies.

For more info, visit: Payroll Software