How to create a total compensation statement (with template)

Published

Jun 9, 2025

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You’ve probably had the conversation. An employee thinks they’re underpaid, but they’re only looking at monthly paychecks. They’re not thinking about retirement contributions, health benefits, or how much PTO they have available. These talks can get uncomfortable fast. A clear total compensation statement heads them off at the pass and can help avoid confusion. It brings everything into focus and makes it easier to build trust and improve retention.

In this guide, we’ll learn what a total compensation statement is, why it matters, and how to create one that your employees understand. We’ll cover what to include, how to format it, and how to deliver it with confidence. You’ll also find a downloadable statement template and a total compensation example to work from.

What is a total compensation statement?

A total compensation statement lays out everything you, as an employer, offer to an employee. Not just a base salary, but the full package of bonuses, retirement contributions, health insurance, paid time off, and other employee benefits. It helps potential new hires and established team members see the full value of what they’re getting in return for their effort. It also helps employers engage in more transparent, grounded conversations about compensation and benefits.

Why are total compensation statements important? 5 benefits

A paycheck only tells part of the story. A comprehensive total compensation statement fills in the details, showing your team exactly what they’re getting beyond base pay. It builds trust, highlights the full value of your offer, and helps your team feel more secure and supported at work.

1. Increases employee retention

When employees appreciate the full value of their compensation package, they’re less likely to look elsewhere. Even if your base salary isn’t the highest on the market, strong employee benefits and retirement plans can tip the scale towards staying put.

2. Enhances transparency and trust

Just the act of providing a compensation statement shows that you’re willing to be open about the full scope of your employee’s earnings. That transparency, especially when it includes both monetary and non-monetary elements, helps employees feel informed and respected, which naturally builds trust.

3. Helps employees make informed financial decisions

Understanding total salary wages, retirement contributions, and insurance coverage helps employees plan for major life decisions. Whether they’re budgeting for a home or comparing offers, a straightforward total compensation breakdown makes a big difference.

4. Supports recruitment efforts

When candidates have questions about pay and benefits, a well-structured total compensation statement helps you stand out. It’s a way to show and not just tell them that your offer means more than just a salary.

5. Encourages employee engagement

Employees are more engaged when they feel valued. If you’re looking for ways to improve employee engagement, a transparent statement that highlights both monetary and non-monetary perks reminds them that they’re more than a line on the payroll report.

Key components of a total compensation statement template

Every section of a total compensation statement plays a role in helping your employees understand what they’re truly earning. A strong total compensation statement starts with a clear compensation plan that defines how each pay element fits your company’s goals.

Leave out too much, and the message gets lost or, worse, undervalued. When people don’t see the full compensation package, they may assume their salary is all they’re getting. Including the right components builds trust and shows that you offer more than just a paycheck.

Base salary

This is the foundation of most compensation and benefits packages. It’s your employee’s fixed salary or hourly rate, typically expressed as an annual salary. It serves as the starting point for calculating other contributions.

Bonuses and incentives

If your team earns performance bonuses, sales commissions, annual profit sharing, or other forms of incentive compensation, include them in your compensation statement. These are some of the most visible types of monetary rewards and a key part of many employee compensation strategies to drive performance.

Equity and stock options

Ownership matters. Whether it’s stock options, RSUs, or other forms of equity, this section shows employees that they’re part of something bigger and potentially more valuable over time.

Medical, dental, vision, and wellness benefits

This section covers the cost of health insurance, including vision insurance, dental insurance, and extras like wellness programs or flexible spending accounts. You can also include employee assistance programs here, which are often overlooked but can offer real support. If you’re using benefits administration software, it’s much easier to pull these details into your total compensation statement without chasing down plan summaries.

Retirement contributions

List all retirement-related perks, including employer matches, pension contributions, or other retirement plans. It’s helpful to show the dollar value of what the company adds each year, not just the percentage.

Paid time off (PTO) and leave policies

Include PTO, sick leave, and any other paid leave like parental or caregiver time. These benefits might seem invisible, especially to employees who haven’t needed them yet, and laying them out clearly helps people recognize their value.

Professional development and education benefits

If you offer tuition assistance, training stipends, or paid conference time, emphasize it. These perks may not be direct cash, but they’re part of your employee value proposition, and they show a long-term commitment to employee development.

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How to create a total compensation statement: 6 tips

If you’re building a total compensation statement, you want it to be clear, accurate, and genuinely useful to your team. The goal isn’t just to show the numbers. You want to help your employees see the real value of everything they’re getting, both salary and employee benefits. It should also reflect your broader compensation philosophy, whether that’s market-based or performance-driven. Here’s how to make sure your next compensation statement ticks all the boxes.

1. Gather accurate employee compensation data

Start with solid numbers. That means pulling data on base salary, paid time, retirement plans, and any extras like life insurance or commuter benefits. If anything’s off, your whole compensation statement falls flat, so be sure to get this part right.

2. Categorize compensation components clearly

Make it easy to follow. Use simple section headers like ‘cash compensation,’ ‘health benefits,’ and ‘perks.’ That way, employees can quickly connect the dots between what they earn and what you, the employer, contribute. A simple spreadsheet can get the job done, but many compensation management software tools can help automate the process.

3. Format the statement for maximum clarity

Stick to a clean layout. Tables work well here, especially if you add totals for each section and a final total compensation number. The more readable your compensation statement, the more likely your team is to actually pay attention to it.

4. Personalize the statement for each employee

Don’t send out a generic form. Take time to list the benefits each employee actually uses, like specific wellness programs, chosen health insurance plan, and how much PTO they’ve taken. If they’ve taken advantage of extra perks like relocation assistance or a retirement match, call that out. The more tailored your statement feels, the more likely your employees are to see real value.

5. Review for accuracy and compliance

Double-check everything, especially your math and category labels. If you’re including things like disability insurance or flexible spending accounts, make sure that they’re listed correctly and that you’re not missing anything you’re required to include.

6. Distribute the statement securely

Use secure delivery methods, whether that’s a locked PDF or a password-protected HR portal. You're dealing with sensitive information like salary numbers, benefits, maybe even stock options, so treat it like it matters.

Total compensation statement template & example

Creating a clear, well-organized total compensation statement doesn’t need to be complicated. The template below gives you a ready-made starting point that you can customize to reflect your organization’s full compensation and benefits offering.

Download here

Manage total compensation & benefits with Rippling

If you’re already tracking payroll and employee benefits with Rippling, creating a total compensation statement is easier than you think. With Rippling, all the key data from salaries to retirement contributions is already in one centralized location, ready to pull into a clean, shareable format.

Built on top of a single source of truth for employee data, Rippling’s payroll software keeps your employee data nimble and easy to access. That means your employee data isn’t tied to one specific app—it’s the same across payroll, time and attendance, onboarding, performance management, and any other apps you use within our unified platform. What does that mean for you and your team? For starters, you have a single source of truth for up-to-the-minute employee information. It also means that your team doesn’t have to reenter information across systems when an employee gets promoted or moves to a different city to work remotely. From changing security permissions to updating PTO policies, Rippling triggers automatic updates to employee information in a single flow.

Even better? Rippling's benefits administration software consolidates all your benefits into one system, streamlining enrollment, deductions, and administration. With Rippling, you can:

Gather relevant information about your company for ACA reporting to the IRS
Generate and e-file 1094-C forms for your company
Submit reporting forms to the IRS and any relevant state agencies on your behalf
Generate 1095-C forms for all eligible employees and add them to your employees’ Rippling profiles
Track your compliance-related information, including plans that were offered, insurance-eligible employees, enrollment information, employee hours, and more—all in one place

Total compensation statement template FAQs

How do you create a total rewards statement?

To create a total rewards statement, start with the basics: base salary, bonus, and paid leave, like sick leave or PTO. Next, add employee benefits; things like retirement plans, life insurance, wellness programs, and flexible spending accounts. Don’t forget stock options, disability insurance, or relocation assistance if they apply. Use a clear statement template so the final total compensation statement is easy to read. Your goal is to help your employees visualize their full compensation package at a glance.

What is an example of total compensation?

A total compensation example might include a base salary of $70,000, plus health insurance, retirement plans, paid time off, and extras like commuter benefits or employee assistance programs. When you add up all the employee benefits—both monetary and non-monetary—you get the full picture. A clear compensation statement based on a standardized statement template helps employees understand how much their employer invests in their progress and well-being.

How often should compensation statements be updated or shared?

At minimum, you should share a compensation statement once a year, typically as part of the performance review process or after a salary change. Some employers send a total compensation more often, however, to remind employees of the total compensation package they’re receiving. That includes nonmonetary perks, too. Keeping this information fresh helps your employees see the real value of their employee benefits, which can go a long way toward improving employee retention.

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