What is Base Salary vs. Total Cash Compensation?

Whether you’re in HR or working in literally any other field, the term “base salary” is probably a familiar one.

No matter what you do for a living, you know that those two words mean, what are you going to pay me to do this job? And it’s likely the first thing you ask when you’re offered a new role.

By the way, in case you didn’t know the formal definition, here’s what “base salary” technically means:

Base salary — Compensation paid to an employee by an employer for performing the basic duties of their job. Base salary does not include bonuses, incentives, benefits, perquisites or allowances. Base salary is typically shown as either an annual salary (or an hourly rate in the U.S.)

Interesting that the base salary doesn’t include things like bonuses or benefits, right?

That’s because there are other terms that include your salary AND all those additional perks.

Namely? Total cash compensation, a.k.a. TCC.

Here’s what TCC means:

Total cash compensation — The actual amount of cash compensation paid in a year. TCC is normally defined as the sum of actual base salary, actual bonus, and actual short-term incentives paid.

So, in summary: TCC is base salary, but with your perks, benefits, bonuses, and more tacked on. Base salary, on its own, is only your monetary compensation.

Well, we can store that one in the mental dictionary — or you can keep both of those definitions (plus dozens more) right on hand!

Download our FREE guide, “The Ultimate Compensation Glossary,” and you’ll have a go-to resource for the most important (and confusing!) compensation terms.

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