compensation

American  

[kom-puhn-sey-shuhn] / ˌkɒm pənˈseɪ ʃən /

noun

1. the act or state of compensating, as by rewarding someone for service or by making up for someone's loss, damage, or injury by giving the injured party an appropriate benefit.

2. the state of being compensated or rewarded in this way.

3. something given or received as an equivalent for services, debt, loss, injury, suffering, lack, etc.; indemnity.

   The insurance company paid him $2000 as compensation for the loss of his car.

   Synonyms:

   indemnification, satisfaction, requital, reparation, amends, payment, recompense

4. Biology. the improvement of any defect by the excessive development or action of another structure or organ of the same structure.

5. Psychology. a mechanism by which an individual attempts to make up for some real or imagined deficiency of personality or behavior by developing or stressing another aspect of the personality or by substituting a different form of behavior.

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compensation British  

/ ˌkɒmpɛnˈseɪʃən /

noun

1. the act or process of making amends for something

2. something given as reparation for loss, injury, etc; indemnity

3. the automatic movements made by the body to maintain balance

4. the attempt to conceal or offset one's shortcomings by the exaggerated exhibition of qualities regarded as desirable

5. biology abnormal growth and increase in size in one organ in response to the removal or inactivation of another

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Other Word Forms

• compensational adjective
• noncompensation noun
• precompensation noun
• procompensation adjective
• subcompensation noun
• subcompensational adjective

Etymology

Origin of compensation

First recorded in 1350–1400; Middle English compensacioun, from Latin compēnsātiōn-, stem of compēnsātiō “a balancing”; equivalent to compensate + -ion

Explanation

Compensation means "making up for something." When a restaurant offers you a free dessert as compensation for messing up your dinner order, the hope is that you will leave happy (and refrain from writing a negative review online). Compensation can also be money, a payment meant to give someone a fair exchange for their effort and output. In fact, the word comes from the Latin word compensat-, meaning "weighed against." If you receive fair compensation for your work, the money is equal to your time and effort. In other words, the scale is balanced.

Example Sentences

The family of a former Kirklees Council worker who died from cancer caused by exposure to asbestos through his job have received more than £1m in compensation.

From BBC • Apr. 22, 2026

These write-downs were disregarded for the purposes of determining executive compensation.

From The Wall Street Journal • Apr. 22, 2026

The yield bond holders get for holding U.S. debt is around its historical average while the ask for additional compensation to hold long-term debt is at typical levels even though risk has increased.

From Barron's • Apr. 22, 2026

When he starts as CEO, Bonfig will get an additional long-term incentive compensation award for Best Buy’s fiscal 2027 with a target value of $1,781,250.

From MarketWatch • Apr. 22, 2026

He had a grand feeling, no doubt, a compensation of vigour and clarity and uplifting of the heart Perhaps his famous God did give him something which she could not give.

From "The Once and Future King" by T. H. White

Related Words

• allowance
• benefit
• bonus
• coverage
• earnings
• fee
• indemnity
• pay
• payment
• payoff
• premium
• profit
• redress
• reimbursement
• remittance
• remuneration
• reparation
• restitution
• reward
• salary