Understanding Salary vs. Compensation: Can You Help Clarify the Difference?

Hi, may I know the exact difference between these two terms?

Salary

Compensation

Please provide your insights and suggestions.

Thanks & Regards,
Saravanan

I have a rough view. Maybe it is as follows:

Salary

Salary is a contractual amount an employee receives when they enter into a contract with the employer for the services rendered to the company where they work.

Compensation

Compensation is an amount received by an employee as condolence or help for some misfortune or mishap that occurred while working, either in the company or for the company.

Regards,
Nishant

Understanding Salary and Compensation

Salary is received in return for the services rendered by an employee to his/her organization. It is a monetary benefit given to an employee to motivate them.

On the other hand, compensation is a broader term that not only includes monetary benefits like salary but also covers all non-monetary benefits such as perks, time off, etc.

In short, compensation encompasses all the monetary and non-monetary benefits received by an employee from their employer.