English Reference

Word

compensation

Phoneticscom·pen·sa·tion, stress on the third syllable

US/ˌkɑmpənˈseɪʃən/

UK/kˌɒmpənsˈeɪʃən/

Definitions

01money for loss or injury

B2 · Upper Intermediate Uncountable noun Law

n. money that you receive because you were injured or something you own was damaged.

n. something, typically money, awarded to someone as a recompense for loss, injury, or suffering.

“The airline offered the passengers financial compensation for the long delay.”

“The court ordered the company to pay substantial compensation to the workers who had been exposed to hazardous chemicals without proper safety equipment.”

Usage

Often used with the verb 'claim' or 'award'.

02salary and benefits

C1 · Advanced Uncountable noun Formal

n. the total amount of money and other benefits an employee receives for their work.

n. the total amount of the monetary and non-monetary pay provided to an employee by an employer.

“The job offer includes a competitive salary and a generous compensation package.”

“The executive's total compensation includes a base salary, annual bonuses, and stock options based on the firm's performance.”

Usage

Common in human resources and corporate contexts.

Teaching tip

In American English, this is the standard formal term for a 'pay package'.

03balancing a weakness

C1 · Advanced Countable noun Academic

n. something that makes a bad situation feel better or balances out a problem.

n. the process of concealing or offsetting a psychological or physical defect by developing another trait.

“His great sense of humor was a compensation for his lack of confidence.”

“The patient's brain showed remarkable compensation, with the healthy hemisphere taking over functions previously managed by the damaged area.”

Usage

Often used in psychological or biological contexts.

Collocations

Common phrases and expressions where native English speakers use the word “compensation” in context.

Verb

01. award compensation to the plaintiff

“The judge chose to award compensation to the plaintiff after reviewing the evidence of negligence.”

verb + noun + prep + noun

02. receive financial compensation

“Families of the victims will receive financial compensation from the insurance company.”

verb + adj + noun

03. seek compensation for the injury

“The victim decided to seek compensation for the injury sustained during the workplace accident.”

verb + noun + prep + noun

Adjective

04. adequate compensation for losses

“Small business owners argued that the government grants were not adequate compensation for losses during the lockdown.”

adj + noun + prep + noun

05. generous compensation package

“The executive was lured away by a generous compensation package that included stock options.”

adj + noun

Noun

06. claim for compensation

“The legal team filed a formal claim for compensation following the breach of contract.”

noun + prep + noun

07. workers' compensation scheme

“The new legislation aims to streamline the workers' compensation scheme to ensure faster payouts.”

noun + noun

Preposition

08. in compensation for the delay

“The airline offered passengers travel vouchers in compensation for the delay.”

prep + noun + prep + noun

Real-World Examples

“And sure enough at the end of the season he did join City, who had to pay Chelsea a huge compensation figure, even though he was no longer their manager.”
BBC News 14 Aug 2026
“Some passengers may also be entitled to financial compensation when a cancellation or delay is due to the strike.”
The Local 14 Aug 2026
“Ryanair said it would not comment on the preliminary report, or on whether Karović would receive compensation, until after the final report was published.”
The Guardian 14 Aug 2026
“At the upper end of its estimate, about £1.2bn in costs would come from businesses who are forced to pay workers compensation for cancelled shifts.”
BBC News 13 Aug 2026

Etymology

From Middle English compensacioun, from Old French compensacion, from Latin compensātiōnem, accusative singular of compensātiō. Equivalent to compensate + -ion.

Etymology adapted from Wiktionary, available under CC BY-SA 4.0.

Word family

NOUN

compensation(C1)

Domain

Finance

This entry

Exam level
CambridgeCambridgeCambridge English QualificationsThe exam suite from Cambridge University Press & Assessment, from A1 Movers up to C2 Proficiency. The benchmark names double as CEFR labels.C1 AdvancedIELTSIELTSInternational English Language Testing SystemThe 0–9 band test co-owned by the British Council, IDP, and Cambridge. Used for university entry, work, and migration.7.0–8.0TOEFL iBTTOEFL iBTTest of English as a Foreign Language, Internet-Based TestETS's academic English test, the standard route for US university admissions. Scored 0–120, with a 1–6 scale since 2026.1–6 scale: 5.0–5.595–113TOEICTOEICTest of English for International CommunicationETS's workplace English test, big in Japan and Korea. Listening & Reading scores 10–990 and tops out at C1.945–990
Frequency
Common
Level
C1 · AdvancedOxford
Updated

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