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 few cases that have gone to trial, including Stumo's, are not intended to determine criminal liability but rather to determine the financial compensation due to the victims' relatives.

From Barron's • May 4, 2026

Under EU rules, this will allow airlines to avoid paying financial compensation to passengers, though they will still be entitled to reimbursement or an alternative flight.

From BBC • May 3, 2026

The New York settlement would funnel funds into a survivor trust and allow individual compensation to be determined through tiered evaluations, with reported averages varying widely depending on severity and documentation.

From Salon • May 3, 2026

GameStop adjusted Cohen’s compensation package at the beginning of the year to give him extra incentive to boost the company’s market value and profitability.

From The Wall Street Journal • May 1, 2026

There is no grand compensation to the admission of envy of the poor.

From "Hunger of Memory" by Richard Rodriguez

Related Words

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