Direct Compensation Definition

Direct compensation is a type of compensation that involves immediate and direct monetary payment to the employee.

Direct Compensation Extended Definition

Direct compensation is the monetary benefit a business gives its employees in return for their work. This includes an employee’s:

• Base pay
• Performance-based variable pay
• Bonuses
• Stock options

It may also include certain types of allowances, such as housing, travel, meal, or car allowances.

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Last Updated By

Maria Tanski-Phillips | Mar 02, 2023