What is total reward?
Salary is only part of what an employee actually receives. Total reward is the sum of pay, pension, insurance, benefits, and development. Here is the concept explained, with a worked example and the reasons visibility is the whole point.
Salary is only part of what an employee actually receives. Total reward is the sum of pay, pension, insurance, benefits, and development. Here is the concept explained, with a worked example and the reasons visibility is the whole point.
The definition
Total reward is the combined value of everything an employer gives an employee in exchange for their work. The concept is usually broken into four parts:
- Cash pay: base salary, any bonus, and variable components.
- Pension and insurance: occupational pension, sickness insurance, accident insurance, premium waiver insurance.
- Benefits: wellness allowance, healthcare insurance, a benefits budget, extra vacation days, and everything else elective.
- Development and work environment: education, flexibility, tools.
The idea is simple: two jobs with the same monthly salary can differ by tens of thousands of kronor per year in actual value. That difference only shows up if you count the whole package.
A worked example
Take an employee on 40,000 kr per month at a company with a normal Swedish package. The figures are illustrative, but the levels are typical:
| Part of the package | Value per year |
|---|---|
| Cash salary | 480,000 kr |
| Occupational pension (4.5% of salary) | 21,600 kr |
| Sickness and accident insurance | 5,000 kr |
| Wellness allowance | 5,000 kr |
| Flexible benefits budget | 12,000 kr |
| Total reward | 523,600 kr |
Nearly 44,000 kr per year sits outside the salary, more than eight percent of the package's value. At companies with richer packages the share is often higher. And that is before employer social fees: for the employer, the package costs considerably more than the payslip will ever show.
The problem: the value is invisible
Here comes the uncomfortable part. The value exists, but the employee never sees it. Salary arrives every month with a clear number on it. The pension, the insurance, and the benefits show up nowhere in daily life, and what is not visible is valued at zero in the employee's head.
That is why total reward has become central to modern compensation strategy: it is not a new way to pay, it is a new way to show what is already being paid. We have written more about the gap between what companies deliver and what employees experience in Why employees don't experience the value of benefits.
Total reward and total compensation are used near-interchangeably. In Swedish, total ersättning or totalkompensation. In American usage, total reward often also emphasises non-monetary parts like development and recognition. For practical HR work in Sweden, it is enough to think: salary plus pension plus insurance plus benefits.
Making the value visible
Three things make the biggest difference to how the package is experienced, in descending order:
- Show the whole picture in one place. An employee should be able to see salary, pension, insurance, and benefits budget together, not across five systems and PDF attachments.
- Make benefits elective. A benefit the employee chose themselves is felt more strongly than the same amount in a standard package, and gets used more.
- Remind at the moment of use. Every wellness receipt and every purchase in the benefit store is a moment where the value becomes concrete.
That is the order CLVR Benefits is built around: the employee sees their whole package in the webapp, makes their own choices within their budget, and meets the value every time it is used.
The short version
- Total reward is salary plus pension, insurance, benefits, and development, counted as one whole.
- In a typical Swedish package, more than eight percent of the value sits outside the salary, more in richer packages.
- Value that is not visible is experienced as zero. Visibility is the whole point of the concept.
- Gather the whole picture in one place, make benefits elective, and let the value show at every use.
More from the blog
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