Compensation means the total amount of payments and benefits an employee receives in exchange for their work.
Compensation policies tend to differ country to country, making it challenging to create compensation plans for a global workforce.
Different types of compensation can include:
- Base salary
- Overtime
- Benefits (e.g. health insurance and retirement plans )
- Stock options
- Commission
What is a compensation package?
A compensation package will consist of monetary and non-monetary benefits, including bonuses, perks, insurance, and stock options – among other things. Needless to say, an appealing global benefits package can do a lot to attract and retain talent.
Challenges in creating compensation packages for a global workforce
- Currency fluctuation: because currencies tend to fluctuate, it can affect employees’ compensation value. Managing these changes to ensure that your global workforce continue getting valuable compensation packages can be difficult.
- Tax and employment laws: with different countries come different tax and employment laws. This means aspects of a compensation package may be taxed differently depending on the local laws. Employers must constantly keep this in mind.
- Costs of living: each country will have different costs of living. Still, compensation packages need to remain consistent in their value regardless of their geographical location. For employers, creating equally meaningful compensation packages while keeping in mind budgets can take a lot of time and energy.
- Cultural differences: Different countries’ customs and values may have their own unique definitions for what worthwhile compensation means. This, too, is something companies need to be attuned to.


The power of consolidated global payroll
Free white paper: how enterprises can streamline global payroll at scale