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What is Remuneration? – Definition, Types, Classifications, and More

Definition

Remuneration is any compensation offering as compensation for providing a service or transfer of assets.

Remuneration can be seen as any payment or compensation between two or more parties to transfer some necessary factor.

It is the price that one party pays to another for having provided services or assets.

Generally, the term is associating with salary, that is, the payor payroll offers to an employee by his employer to fill a vacancy and submit his job.

However, any banking product ( deposit, investment fund, checking account, or other) is also remunerating.

Even for collaborations and commercial agreements (freelancers) also corresponds to Remuneration.

Also read: What are the Types of Calculator? – Definition and Types

What are the 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.

1.      Salary performance

It is a type of Remuneration made up of the salary and its different components, including checks and allowances.

2.      Remuneration in kind

These are all those social benefits that an employee receives from the company.

He must not pay directly, such as health insurance, housing payments, the pension fund, the restaurant check, etc.

3.      Extraordinary Remuneration

It is the reward obtaining by a person who has excel in some aspect within a company or organization.

It is the case, for example, of bonuses, prizes, or gifts that a boss gives to his brightest workers.

4.      Other forms of Remuneration

The employer can offer and extend vacation days or days off for its workers or offer corporate childcare for their descendants’ benefit.

What are the Classifications of Remunerations?

Depending on its format and reason for being, they are classifying according to the following types.

·         Ordinary, extraordinary, and special

Ordinary result from the Remuneration of the services providing, while extraordinary ones are offered sporadically (bonuses or overtime).

On the other hand, special remunerations are awarding to meet specific conditions, such as bonuses, prizes, gifts, etc.

·         Fixed and variable

On the one hand, fix Remuneration is tacit to be those received by the employee in a given period, been set to the extent that his salary does not vary in his pay periods.

On the other hand, variable contemplates the possibility that the monthly result is not the same from one month to another.

·         Main and accessory

It is primary when it responds to the consideration agreed in the employment contract.

While Remuneration is accessory when it is calculating on the primary Remuneration, as is the payment of the worker’s overtime work.

How is the Payment in Remuneration?

It corresponds to the employer’s primary obligation and providing the work for which the worker has been hiring.

In our legislation, it is of particular importance, for which the legislator has taken care to dictate a series of norms that tend to its adequate protection.

What is the Administration of Remuneration?

It is the procedure that seeks to establish the right structure between salary and function to be performing in the job.

Likewise, it is in charge of studying the market to designate a similar remuneration in similar functions in other organizations.

Gross and net Remuneration

It is the salary that a worker receives without making the deductions or contributions for social security and other taxes required by the State.

About this term, it is also essential to understand the net Remuneration.

Which is the salary that the employer receives already with the deductions and contributions drawn.

Remuneration basics

It is growing as a consideration in money.

Or in kind that the worker receives for the service or work provided to the company.

Due to the importance that is generates in the life of an individual.

Since it allows him to cover all the essential expenses of his own and that of his family, such as clothing, food, house, among others.

It recognizes as a right established in the Charter Country Magna

Also read: What is Internet? – Definition, Characteristics, Operation, and More

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