English Reference
noun

compensation

n.
US /ˌkɑmpənˈseɪʃən/ UK /kˌɒmpənsˈeɪʃən/ com·pen·sa·tion UK spelling compensations

  1. 01 B2 Upper Intermediate Law

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

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

    Simple

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

    In context

    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'.

  2. 02 C1 Advanced Formal

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

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

    Simple

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

    In context

    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.

    Teacher's tip

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

  3. 03 C1 Advanced Academic

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

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

    Simple

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

    In context

    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.

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

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.

This entry
Origin Latin compensātiōnem
Level C1 · Advanced
Frequency Common
Updated