Compensation Meaning: Here’s What It Means and How To Use It?

You’ve likely heard someone mention the word compensation before, but what does it mean? This guide will tell you everything you need to know.

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If you’re a hardworking individual that provides services to others, you’ve likely heard the word “compensation” before, but do you know what it means? We’ll tell you!

In this guide, we’re exploring the English word compensation to uncover its definition, origin, and more. So if you’ve ever been curious about the meaning behind compensation or how to use the term in a sentence — keep reading. Here’s our complete guide on compensation.

What Is the Definition of Compensation?

/ˌkɑːm.penˈseɪ.ʃən /ˌkɒm.penˈseɪ.ʃən/

More often than not, you will see compensation defined as a monetary payment given to a person in exchange for services rendered. Compensation in the workplace refers to what is earned by the employees — AKA, a salary. 

Other forms of employee compensation include:

  • Base pay — salary wages or hourly wages
  • Recognition pay
  • Overtime wages
  • Bonus pay
  • Tip income
  • Merit pay
  • Benefits — standard vacation policy, retirement, insurance
  • Sales commission
  • Stock options
  • Other non-cash benefits 

Pronounced kom-puhn-sey-shuhn, compensation also refers to the act of rewarding someone by making up for that person’s damages, emotional distress, loss, or injury by giving that individual an appropriate benefit. 

Additionally, compensation is used in biology where it can be defined as the improvement of any defect that happens through excessive development or action of another organ or structure of the same structure. 

In simpler terms, compensation is the act of compensating. 

What Is the Origin of Compensation?

Believe it or not, the word compensation comes from the Latin word compensat-, which simply means, “weighed against.” If you receive compensation for your services that is deemed fair, the reward is equivalent to your time and effort. In other words — the scale is balanced

What Are the Synonyms and Antonyms of Compensation?

Synonyms and antonyms can help you to better express yourself while enhancing your existing vocabulary. That said, what exactly is a synonym? And what’s an antonym? 

Simply put, synonyms are words that have similar meanings whereas antonyms are words that have opposite meanings. With this in mind, let’s review the synonyms and antonyms of compensation, shall we?


  • Damages
  • Recompense
  • Act of kindness 
  • Remunatiaon
  • Goodwill gesture
  • Indemnification
  • Indemnity
  • Requital 
  • Act of assistance
  • Reimbursement
  • Claim
  • Retention 
  • Golden handshake
  • Remuneration
  • Settlement
  • Payoff


  • Hindrance
  • Punishment
  • Nonpayment
  • Delinquency
  • Defaulting
  • Fine
  • Avoidance
  • Fee
  • Theft
  • Extortion
  • Cost
  • Increase
  • Spoilage
  • Disowning
  • Forsaking
  • Recantation
  • Bankruptcy
  • Rejection
  • Outstandings
  • Punition 

How Can You Use Compensation in a Sentence?

Now that you understand what compensation means, it’s time to practice using our word of the day in a sentence. 

Quiz yourself to see how many accurate sentences you can come up with using the term compensation. If you’re still a little confused, feel free to explore our example sentences listed below:

“Throughout the pandemic, many families relied on unemployment compensation while they were in lockdown.” 

“Just looking at Tim’s base pay you may think he was getting the short end of the deal. However, if you happen to look at his total compensation, let’s just say he is doing a-okay.” 

“The compensation that our boss was offering to work this weekend was definitely not worth my time.”

“After pouring my blood, sweat, and tears into this project for a number of years, I am expecting a rather large compensation.”

“The victim’s family was awarded millions of dollars in compensation.”

“Bob claimed compensation for loss of earnings.”

“Mary wasn’t too fond of the compensation package, but I felt otherwise.”

“After a lengthy battle in court, the company was not required to pay a hefty fine or compensation.”

“Before accepting a job, it’s of the utmost importance that you review compensation for your time.”

“The insurance company paid $3,000 for the loss of Jimmy’s car.”

“The lawyer examined the entire issue of damages, including compensation for the psychological suffering his client was put through.”

“If you ask me, compensation is the most essential thing to look for when searching for a career.”

“It’s important to me that workers’ compensation and healthcare benefits are offered.”

“Harry decided to seek compensation after realizing the car accident left him paralyzed from the waist down.”

“Due to years of abuse at the hands of the employer, the employees are finally seeing compensation and are suing the company.”

What Are Translations of Compensation?

Planning a vacation overseas? Need help saying compensation in a different language? We’ve got your back! Here are some of the most common translations of the word compensation:

  • Finnish: hyvitys 
  • French: compensation 
  • German: Entschädigung 
  • Greek: αποζημίωση 
  • American English: compensation 
  • Arabic: تَعْويض 
  • Thai: การชดเชย 
  • Turkish: tazminat 
  • Ukrainian: компенсація
  • Vietnamese: tiền đền bù
  • Brazilian Portuguese: compensação 
  • Chinese: 赔偿金 
  • Polish: wynagrodzenie 
  • European Portuguese: compensação 
  • Romanian: compensație
  • Russian: компенсация 
  • Spanish: compensación 
  • Japanese: 賠償金 
  • Korean: 보상 
  • Norwegian: godtgjørelse 
  • Swedish: kompensation
  • Croatian: naknada
  • Italian: risarcimento
  • Czech: odškodnění 
  • Danish: kompensation 
  • Dutch: compensatie 
  • European Spanish: compensación 

A Final Word

To sum it all up, compensation means to make up for something. It can be a cash payment or a non-cash payment that is meant to balance the scales in order to make a bad situation better. 

In other words, compensation is the act of compensation — it’s the state of being compensated.


  1. Compensation Synonyms | Collins English Thesaurus 
  2. COMPENSATION definition | Cambridge English Dictionary 
  3. definition of compensation | The Free Dictionary