Total Remuneration Package: How Australian Employers Should Structure It

If you employ (or plan to employ) staff, you’ve probably come across the phrase total remuneration package - sometimes written as “TRP”, “total package”, or “package inclusive of super”.

It can be a useful way to present pay in a clear, commercial way. But it can also create confusion (and disputes) if it’s not structured and documented properly - especially when awards, overtime, allowances, bonuses, and superannuation are in the mix.

In this guide, we’ll walk you through what a total remuneration package is, what you can (and can’t) include, and how to structure it so it’s practical for your small business and compliant with Australian workplace laws.

What Is A Total Remuneration Package (And Why Do Employers Use It)?

A total remuneration package is the total value of what you provide an employee in return for their work.

In plain terms: it’s not just the “take-home pay” or base salary. It’s the overall “deal” - including cash salary/wages and other benefits you provide.

What Is Total Remuneration In Practical Terms?

When employers talk about total remuneration, they usually mean a package that includes:

• Base salary or wages (what you pay as ordinary earnings)
• Superannuation (either paid on top of base, or included within a packaged figure)
• Bonuses or commissions (if applicable)
• Allowances (for example, travel allowance, tool allowance, first aid allowance - depending on the role and award)
• Non-cash benefits (for example, a company car, phone allowance, additional leave, or other perks)

Employers often use total remuneration packages because they can:

• make it easier to compare an employee’s overall cost
• create flexibility in how you allocate benefits (especially for senior roles)
• help you recruit by showing the “whole offer” rather than just the base salary

That said, packaged remuneration needs to be handled carefully - because many workplace entitlements in Australia are based on minimum rates, classifications, and conditions under an award or enterprise agreement.

Why “Total Package” Can Be Risky If You Don’t Define It Clearly

One of the most common problems we see is when a business says something like:

“We’ll pay you $90,000 total remuneration package.”

…but the employee understands it as $90,000 plus superannuation, while the employer intended it as $90,000 inclusive of superannuation.

This isn’t just a “miscommunication” issue - it can lead to underpayment claims, especially if the employee is award-covered and the packaged amount doesn’t actually cover all required minimum entitlements.

Inclusive vs Exclusive Of Superannuation

In Australia, employers usually structure packages in one of two ways:

• Base salary + super (exclusive): for example, “$90,000 + super”.
• Total remuneration package inclusive of super: for example, “$90,000 total package (inclusive of super)”.

Because superannuation is often the flashpoint, it’s worth spelling this out clearly in writing. If you want a deeper read on the common confusion point, it’s helpful to get across super in salaries and how employers usually describe it.

A Total Package Does Not Automatically “Override” An Award

If your employee is covered by a modern award, you can’t simply package a number and assume it covers everything.

You still need to ensure the employee receives at least the minimum entitlements that apply - which may include (depending on the award and the role):

• minimum base rate
• penalty rates
• overtime
• allowances
• loadings
• break entitlements and rostering rules

Many small businesses handle this by doing proper award compliance checks up front, then documenting how the package is intended to satisfy (and where necessary, exceed) minimum entitlements.

What Should You Include In A Total Remuneration Package?

The right package structure depends on the role, your industry, and how your business operates. But it helps to think in categories: cash components and non-cash benefits.

1. Cash Components

These are usually the core of the package and the easiest to value.

• Base salary/wages: the fixed amount for ordinary hours.
• Superannuation: generally a percentage of ordinary time earnings (OTE), paid into the employee’s nominated fund. (Super guarantee rates can change over time, so it’s worth checking the current rate when you’re setting or updating a package.)
• Bonuses: discretionary or KPI-based (you’ll want to define when they are payable, and whether they are guaranteed).
• Commissions: common in sales roles (define the commission rate, calculation method, and when it’s earned).
• Allowances: where required by an award or agreed as part of the employment arrangement.

2. Non-Cash Benefits (And Things To Watch)

Non-cash benefits can be attractive, but they need careful handling because the “value” may not be obvious, and tax treatment can be different (for example, fringe benefits tax may apply). (This is a general guide only and not tax advice - you may want to speak to your accountant or a tax adviser about the tax and FBT treatment of specific benefits.)

Examples include:

• Company car (including fuel cards)
• Work phone or phone allowance
• Additional paid leave (for example, extra annual leave on top of the NES minimum)
• Professional development budgets
• Flexible work arrangements (not always a dollar value, but still part of the “deal”)

If you include non-cash benefits in a total remuneration package, be clear about:

• who owns the item (e.g. car, phone) and what happens on termination
• any policies about use (e.g. personal use limits)
• what you will do if the benefit is withdrawn or becomes unavailable

How Should Australian Employers Structure A Total Remuneration Package?

A good package is one that is:

• easy to understand (for you and the employee)
• accurate (so it reflects true cost)
• compliant (especially if the employee is award-covered)
• documented (so expectations are clear and enforceable)

Step 1: Decide Whether You’re Packaging Super Or Paying It On Top

From a small business perspective, this is often the first structuring decision because it affects budgeting and recruitment messaging.

• If you advertise “$X + super”, the employee’s base pay is $X and super is paid on top.
• If you advertise “$X total remuneration package”, you should clarify in writing whether that includes superannuation, and how it’s calculated (including what super guarantee rate applies at the relevant time).

There isn’t a single “right” approach - but whichever you choose, consistency (and clarity in documentation) is key.

Step 2: Check Whether The Role Is Award-Covered (And What That Means For Packaging)

Some employers assume that if someone is paid a salary, awards don’t apply. In many industries, that’s not true.

Even salaried employees can be award-covered. That’s where award compliance, time recording, and set-off provisions become important, because you need to ensure the employee would not be worse off overall compared to their minimum award entitlements.

Step 3: Decide How You’ll Handle Variable Pay (Bonuses, Commissions, Overtime)

Variable pay is where packages can become messy.

As an employer, you’ll want to separate:

• guaranteed pay (base salary/wages, super, guaranteed allowances)
• conditional pay (bonuses tied to KPIs, commissions)
• situational pay (overtime, penalties, shift loadings - if applicable)

If you “roll up” variable elements into a total remuneration package, you’ll want to be especially careful. For example, if your employee regularly works outside ordinary hours, a flat salary may not cover what they are owed under an award unless it’s properly structured (and properly monitored).

Step 4: Be Clear About What’s Included, What’s Additional, And What Can Change

A well-structured package usually spells out:

• the base salary amount (and pay frequency)
• the superannuation amount or percentage and whether it’s included in the headline package figure
• any allowances and the circumstances where they apply
• bonus or commission terms (including any discretion)
• non-cash benefits and the policies that apply
• review periods (for example, annual salary review)

This doesn’t need to be overly complicated - it just needs to be unambiguous.

How Do You Document A Total Remuneration Package Properly?

This is where many small businesses can protect themselves (and their team) with the right paperwork.

If you’re offering a total remuneration package, it’s not enough to put a number in an email. You should document the package in an employment agreement and support it with the right workplace policies.

Employment Contract: The “Source Of Truth”

Your Employment Contract is typically where you should define:

• the employee’s base salary or wage rate
• superannuation (inclusive or exclusive)
• ordinary hours of work
• how bonuses/commissions are calculated (or if they are discretionary)
• any agreed allowances or benefits
• termination provisions (including notice)

If you intend the salary to compensate for certain entitlements (for example, some overtime or allowances), this should be addressed carefully and drafted clearly. Done properly, it can reduce misunderstandings and help you demonstrate compliance if a dispute arises.

Policies And Handbooks: The “How It Works Day To Day”

Policies can help you operationalise the package and set expectations - especially around things like bonus schemes, use of company property, travel claims, and expenses.

For many small businesses, a Staff Handbook is a practical way to keep key policies in one place and update them without rewriting the entire employment contract each time.

If You Offer Perks, Make Sure You Also Cover Privacy

If your package includes perks that involve collecting personal information (for example, company devices, monitoring systems, or payroll portals), don’t forget your privacy obligations. (Privacy requirements can vary depending on your business, the type of information you collect, and whether the Privacy Act 1988 (Cth) applies - including the employee records exemption in some circumstances.)

A tailored Privacy Policy is particularly important if you also collect customer data (which many small businesses do), but it can also play a role in explaining how personal information is handled across your business.

Keep Your Language Consistent: Salary vs Wages

Small drafting inconsistencies can create big practical issues later - particularly around pay frequency, timesheets, overtime, and deductions.

It’s worth being deliberate about whether a role is structured as salary or hourly wages, and what that means. Many employers find it helpful to align terminology with salary vs wages distinctions before they lock in a “package” figure.

Common Mistakes To Avoid With Total Remuneration Packages

Even with the best intentions, total remuneration packages can go wrong when they’re treated as a shortcut rather than a structured system.

Here are common issues we recommend you avoid:

1. Not Stating Whether Super Is Included

This is the classic dispute. If the contract and offer letter don’t clearly say “inclusive of super” or “plus super”, you’re leaving room for disagreement.

2. Assuming A High Salary Automatically Covers Award Entitlements

A flat salary may still fall short if the employee routinely works overtime or is entitled to penalty rates and allowances under an award. You need to check and monitor this - particularly if the role has variable hours.

3. Treating Bonuses As Guaranteed (When You Don’t Mean To)

If you describe a bonus in a way that looks guaranteed, you may be creating a contractual entitlement. If it’s meant to be discretionary or conditional, that needs to be drafted carefully.

4. Forgetting Termination Entitlements Aren’t “Included” In The Package

Employees have minimum entitlements on termination (like notice) that generally aren’t absorbed into a total remuneration figure. If you’re considering paying notice out rather than having someone work it, it helps to understand payment in lieu of notice and how it should be handled.

5. Not Updating The Package When The Role Changes

If the role expands (more responsibility, more hours, different duties), the package should be reviewed. A package that was compliant and fair 18 months ago may no longer reflect the reality of the role today.

Key Takeaways

• A total remuneration package is the total value of what you provide an employee, including base pay and (often) superannuation, plus other benefits.
• The most important drafting point is to clearly state whether the package figure is inclusive or exclusive of super.
• If an employee is covered by a modern award, a “total package” approach still needs to meet minimum award entitlements, which may include penalties, overtime, and allowances.
• Well-structured packages separate guaranteed pay (base + super) from variable pay (bonuses/commissions) and spell out exactly how each component works.
• Your Employment Contract should be the source of truth for the package, supported by policies (often consolidated in a staff handbook) so the offer works smoothly in practice.
• Getting the structure right early can reduce disputes, improve recruitment outcomes, and help you stay compliant as your team grows.

If you’d like a consultation on putting together a total remuneration package (or reviewing your employment contracts and pay structures), you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.