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Types of Compensation: A 2025 Guide for HR

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If organizations want to reward their employees fairly, they need to understand different types of compensation and how to create attractive compensation packages. Let’s examine the different types of compensation employers can of

fer.Cont
entsWhat is compensat
ion?What are the different types of employee compensat
ion?– Direct comp
ensation– Indirect
compensation– To

t
al compensation What

is compensation?Compensation refers to any payment given by an employer to an employee during their period of employment. In return, the employee will provide their time, la

bor, and skills.This compensation can be in the form of a salary, wage, benefits, bonuses, paid leave, pension funds, stock options, and more. Compensation is

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