What is a compensation package

Remuneration: what does this mean?

If someone does their job, they get theirs for it wage. Or besalary? He will hardened and tempered? Or maybe rewarded? In this Jungle of terminology climbing through is very difficult.

In a nutshell: remuneration

What is meant by remuneration?

Remuneration is a generic term and generally describes the financial consideration for a service provided. How high it turns out is usually recorded in the employment contract.

What is the most common form of compensation in labor law?

The most common terms are probably wages and salaries. The latter is usually paid in the same amount every month, whereas wages can vary and are paid weekly.

What is a pay grade?

You can find out what a remuneration group is about here.

Specific information on the types of remuneration:

Time wages

What are the advantages and disadvantages of time compensation? Find out here!


Find out in this guide what the labor law term “salary” really means.


When do we actually talk about “wages” and what are real wages? More here.

Performance-based payment

What is performance-based pay? What are the characteristics in this regard?

Performance-related wages

In this guide we explain what is meant by performance-based pay.

Expenses on a business trip

Here you get an overview of expenses, daily rates and relevant regulations.

There are also questions about the variable or performance-based remuneration. What do these terms mean and how do they differ?

This guide gives you one Overview of the most important key points on the subject of "remuneration" and how this relates to the terms wage, salary and remuneration.

Remuneration - Definition: What does "remuneration" mean?

Basically, the remuneration is as Consideration for a service Are defined. So she belongs to the Main duties in a service contract. These are in Section 611 German Civil Code (BGB) held. The paragraph states that one side is obliged to provide the service and the other side to the agreed remuneration.

The remuneration is a Generic or generic term.

in the Employment Law are the terms Most common wages and salaries. It is Originally a term for the remuneration of workers and the Salary for that of the employees. Since this clear distinction is rarely made nowadays, wages and salaries are used almost equally.

Other names for the remuneration in the different occupational groups are the following:

  • Pay: in the military or in community service
  • fee: in the field of freelance professions such as doctors, appraisers or architects
  • commission: in commercial law
  • Fee: for artists
  • Royalty: in the arts and crafts in general
  • Usage fee: in copyright contract law

The term "Wages" occurs again and again and is used synonymously for remuneration. But in most cases a small distinction is made at this point as well, insofar as that Pay primarily describes income from non-self-employed activities.

The Amount and due date of the remuneration for the work performed is very clear from the employment contract and collective bargaining agreements dependent. If no agreements have been made, the principle applies § 612 BGB of the usual remuneration. In addition, the statutory minimum wage has been in effect since the beginning of 2015. It is currently included € 9.50 (as of January 2021) gross per hour.

Further information on allowances and deductions:

Shift allowance

What types of shift allowances are there and what should employees consider?


In this guide you can read whether Tringeld has to be taxed or not.

Christmas bonus

Are you entitled to a Christmas bonus? We give the answer here.

What is variable or performance-related compensation?

A performance-related remuneration describes so-called Wage components or elements of remuneration that are paid based on performance become.

Especially in the field of trade, the term so-called Performance fee used. For specialists or executives, the designation of commission enforced.

Next to it also belongs bonus in this spectrum. This primarily describes an annual performance fee.

Originally, performance-based pay was established in some industries or companies in order to Incentives for workers to accomplish. Besides this Achievement motivation This form of remuneration is always about the Increase in productivity and increasing identification with corporate goals.

In addition to performance-based remuneration there are now other models, each with a different orientation:

  • Success-based remuneration
  • Performance-based remuneration
  • Results-based remuneration
  • Value-based remuneration
  • Competency-based remuneration

What is a pay grade?

Basically will every employee in a certain salary group depending on the field of activity classified. Most likely, the remuneration is in the area public service known as well as the Remuneration according to TVöD. In both cases, a tariff-based remuneration is described for different occupational groups.

The remuneration is recorded in remuneration tables and the amount of the respective remuneration is decided depending on the group. Incidentally, the same applies to the Remuneration according to AVR - the employment contract guidelines of the German Caritas Association and the Diakonisches Werk.

Special case: on-call remuneration

The On-call duty is a special form of on-call duty and is used in various industries. For the remuneration of on-call duty, the regulations in the employment contract as well as the collective agreement conditions applied are decisive. The Remuneration for on-call duty occurs predominantly flat-rate.

For the Remuneration from on-call service traditionally one applies lower pay than, for example, with “normal” full-time work.

Additional information about remuneration:

Wage equalization fund

Find out in this guide when a wage adjustment is paid.

Paid breaks

Do breaks also have to be paid for according to labor law? You can find the answer in the guide.


When can you apply for a higher grouping and what does the application look like?

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Remuneration: what does this mean?
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