The three basic components of compensation are:
Base pay: This is the fixed amount of money an employee is paid for their work, usually on an hourly, daily, or annual basis. Base pay may also include commissions, bonuses, and other forms of guaranteed income.
Benefits: This includes non-wage compensation such as health insurance, retirement plans, paid time off, and other perks.
Incentives: These are financial rewards tied to performance or other specific goals, such as sales quotas or production targets. Examples of incentives include commissions, bonuses, and profit-sharing plans.