{"id":4534,"date":"2022-01-07T13:19:39","date_gmt":"2022-01-07T13:19:39","guid":{"rendered":"http:\/\/43.204.200.242\/hr-glossary\/direct-compensation\/"},"modified":"2024-06-03T16:32:28","modified_gmt":"2024-06-03T11:02:28","slug":"direct-compensation","status":"publish","type":"hr-glossary","link":"https:\/\/akriviahcm.com\/resources\/hr-glossary\/direct-compensation","title":{"rendered":"Direct Compensation"},"content":{"rendered":"<h1>What is direct compensation?<\/h1>\n<p>The complete compensation of an employee includes both direct and indirect compensation. While the Direct compensation is the monetary compensation given to the employee based on performance and experience, indirect compensation are the rewards and additional perks like insurance, retirement fund and employee discounts on the top of the base salary.<\/p>\n<h2>Types of Direct Compensation<\/h2>\n<ul>\n<li>\n<h3 class=\"h5\">Salary:<\/h3>\n<p>It is the monetary compensation companies provide to employees for their hard work.<\/li>\n<li>\n<h3 class=\"h5\">Travel Allowances:<\/h3>\n<p>Companies cover the cost of travel and commute of various employees. Travel allowances come under that category.<\/li>\n<li>\n<h3 class=\"h5\">House allowances:<\/h3>\n<p>It is provided by company if the employee is relocating for work. It is also part of the Flexi benefit plan wherein a company covers the house allowance, it can be part of the net salary.<\/li>\n<li>\n<h3 class=\"h5\">Medical reimbursement:<\/h3>\n<p>Employees are provided with medical allowance that covers them and their family as well.<\/li>\n<\/ul>\n<h2>Factors to note while deciding direct compensation<\/h2>\n<p>One can decide the direct compensation for an employee based on &#8211;<\/p>\n<ul>\n<li>\n<h3 class=\"h5\">Research Industry standards:<\/h3>\n<p>Recruiters can research how much salary is being offered for similar position in relevant industries. While doing the study, try considering the geographic location as well. If it is a remote role, scanning the entire global market would be a good idea to offer a comprehensive compensation package.<\/li>\n<li>\n<h3 class=\"h5\">Pay based on experience and skills:<\/h3>\n<p>An employee with a higher level of education, skills and experience should be compensated accordingly.<\/li>\n<li>\n<h3 class=\"h5\">Check budget and resources:<\/h3>\n<p>Before offering a position to a candidate please determine a budget and check your resources. This helps recruiters and management take a planned decision.<\/li>\n<\/ul>\n<h2>Direct Compensation &#8211; FAQs<\/h2>\n<h3 class=\"h4\">What is direct compensation with example?<\/h3>\n<p>The monetary benefits aka the in-hand salary that an employee receives for their work in the company is an example of direct compensation.<\/p>\n<h3 class=\"h4\">What is the purpose of direct compensation?<\/h3>\n<p>Direct compensations are a way to appreciate employees and acknowledge their hard work.<\/p>\n","protected":false},"featured_media":0,"template":"","class_list":["post-4534","hr-glossary","type-hr-glossary","status-publish","hentry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>What is Direct Compensation? | Meaning &amp; Definition | Akrivia HCM<\/title>\n<meta name=\"description\" content=\"Direct compensation is the sum of wages, bonuses, and benefits paid to employees for the service provided by their employers.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/akriviahcm.com\/resources\/hr-glossary\/direct-compensation\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Direct Compensation\" \/>\n<meta property=\"og:description\" content=\"Direct compensation is the sum of wages, bonuses, and benefits paid to employees for the service provided by their employers.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/akriviahcm.com\/resources\/hr-glossary\/direct-compensation\" \/>\n<meta property=\"og:site_name\" content=\"Akrivia HCM\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AkriviaHCM\" \/>\n<meta property=\"article:modified_time\" content=\"2024-06-03T11:02:28+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@AkriviaHCM\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/akriviahcm.com\\\/resources\\\/hr-glossary\\\/direct-compensation\",\"url\":\"https:\\\/\\\/akriviahcm.com\\\/resources\\\/hr-glossary\\\/direct-compensation\",\"name\":\"What is Direct Compensation? 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