What Does Remuneration Mean?

What makes up remuneration

• Base salary or wages — the fixed cash component.
• Superannuation guarantee — compulsory employer contributions.
• Bonuses and commissions — discretionary or contractual; the distinction matters enormously on termination.
• Allowances — vehicle, tool, travel, on-call and industry allowances under an award.
• Equity — options or shares under an ESOP, or phantom share rights.
• Non-cash benefits — vehicle, phone, health cover, parking, salary-packaged items, some of which attract fringe benefits tax.

Total remuneration package vs base plus super

Two ways to express the same job:

• TRP $120,000 inclusive of superannuation — the super guarantee comes out of the $120,000, so cash salary is lower, and increases to the super rate reduce take-home pay unless the contract says otherwise.
• $120,000 plus superannuation — the employer pays super on top, so the real cost is higher and rate rises are the employer's cost.

Contracts that say "$120,000 package" without specifying which model applies invite a dispute every time the guarantee rate changes. Say it explicitly, and address what happens on future rate increases.

Why the definition drives real money

1. Redundancy and notice. Payments are usually calculated on base rate of pay under the Fair Work Act, which excludes bonuses and most allowances — but a contract can promise more.
2. High-income threshold. Access to unfair dismissal turns on annual earnings, which includes some benefits and excludes others.
3. Payroll tax and workers compensation. State definitions of wages capture allowances, fringe benefits, contractor payments and shares — often broader than employers expect.
4. Bonus disputes. Whether a bonus is discretionary or an entitlement, and whether it survives termination, is settled by drafting, not by intention.

Drafting the remuneration clause properly

• State the base salary figure and whether superannuation is inclusive or additional.
• Set out review timing, and make clear a review does not guarantee an increase.
• For bonuses, specify the measurement period, the criteria, whether payment is discretionary, and whether the employee must be employed and not under notice on the payment date.
• Describe non-cash benefits and who bears fringe benefits tax.
• Include a set-off clause for award entitlements where an annualised salary is paid — and check the annualised wage provisions of the relevant award.
• Deal with equity by reference to the plan rules, including treatment for good and bad leavers.