What to include in a total compensation statement?

A total compensation statement is a document showing the whole value of the compensation an employee receives in exchange for their work; for the average U.S. civilian worker, this averaged $48.05 per hour in June 2025. Distinct from a pay stub, a total compensation statement doesn't just show wages or salary payments. The document also includes other types of direct compensation, such as bonuses or commissions, and the employee's indirect compensation, such as health insurance benefits and 401(k) matching.

What is total compensation vs. salary

Total compensation includes an employee's base salary plus the monetary value of all benefits, bonuses, and perks they receive. Salary is just the fixed base pay, while total compensation shows the complete financial investment a company makes in each employee.

This difference matters because employees often underestimate their true compensation value. When you factor in health insurance, retirement matching, paid time off, and other benefits, the total package can be significantly higher than base salary alone. For example, recent U.S. data shows that benefit costs for private industry workers accounted for 29.8 percent of their total compensation.

What to include in a total compensation statement

So, what exactly should you include in your total compensation statement? Here are the essential components that belong on every statement:

Core compensation elements:

• Hourly pay/salary

• Overtime pay

• Paid time off (PTO) such as sick leave, vacation, and personal time

• Commissions, bonuses, and any other incentive pay

• Insurance benefits such as medical, vision, life, and dental

• Retirement plan contributions

But wait—there's more you can include beyond the basics. Here are additional benefits that add real value:

• Education benefits

• Legal assistance

• Relocation assistance

• On-site childcare

• Health savings accounts

• Stock options

• Pet insurance

• Fitness or wellness programs

• Company vehicle

• Company-provided mobile phone

• Career advancement opportunities

Remember: if it costs your company money and benefits the employee, it belongs on the statement—even if they don't receive direct payment for it.

Purpose of total compensation statements

The purpose of creating and sharing total compensation statements is to provide employees with a complete overview of their compensation package. Employees are generally aware of the other compensation types beyond wages or salaries. Still, seeing this information all in one place can be enlightening and give them a better picture of all the compensation they receive. Typically, employers only send these statements to employees once per year.

Looking to reward your global team? Offer salary, equity, and benefits confidently with Oyster.

Employers are not legally required to share total compensation statements, but doing so can benefit their businesses. When employees can easily see the full value of their compensation, they may experience a boost in morale and feel more loyal to the company, which is a significant advantage given that only 18% of employees feel they have a "very transparent" model for pay communication. 

How to create a total compensation statement

Creating effective total compensation statements doesn't have to be complicated. Here's a simple step-by-step process:

Step 1: Inventory your compensation offerings

List everything you provide, from base pay to benefits like tuition reimbursement and relocation assistance.

Step 2: Organize into categories

• Direct compensation (such as wages, salary, or bonuses)

• Indirect compensation (employer-paid benefits such as 401(k) matching and health insurance coverage)

• Totals

Step 3: Customize for each employee

Tailor each statement to reflect the individual's specific compensation package.

Step 4: Distribute and explain

Share the statements with employees and take time to explain what they're seeing and why it matters.

Examples of total compensation statements

It may be helpful to consider some examples of total compensation statements, such as the ones below:

Example 1

Regular pay: $45,250

Overtime pay: $12,000

Paid time off: $8,750

Health insurance: $10,000

Vision insurance: $4,000

Total: $80,000

Example 2

Base salary: $82,000

Paid time off: $12,000

401(k) contributions: $5,500

Medical insurance: $9,000

Disability insurance: $2,500

Pet insurance: $3,000

On-site childcare: $8,000

Total: $112,000

Notice that the individual components of the example total compensation statements may change, but they both include several components of employee compensation as well as a sum of all the components at the bottom. 

Actual documents may include a total compensation statement introduction or a cover letter to explain the contents. This introduction is not necessary, but may be useful for framing the document and helping employees understand its purpose.

Streamline global compensation management

Creating a clear and comprehensive total compensation statement is a powerful way to boost morale and retain top talent. But when your team is distributed across different countries, managing fair and compliant compensation becomes much more complex. Local laws, market rates, and statutory benefits vary widely, making it a challenge to provide equitable rewards.

Oyster's Total Rewards solution simplifies this process. Our platform provides the data and tools you need to design and deliver competitive, compliant compensation packages tailored to each local market. From salary benchmarking to localized benefits, we help you create a consistent and delightful experience for every team member, no matter where they live. Ready to build a world-class global team? Start hiring globally.

FAQs

How often should companies provide total compensation statements?

Most companies provide total compensation statements annually, typically during year-end reviews or open enrollment periods.

Are total compensation statements legally required?

No, total compensation statements are not legally required in most places, but they're considered a best practice for employee engagement.

How do you calculate the monetary value of benefits and perks?

Use the actual cost to your company—employer contributions for insurance and retirement plans, or the full amount offered for perks like wellness stipends.