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Compensation Agreement

Employment Agreement

Employment Agreement

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THIS COMPENSATION AGREEMENT (this "Agreement") dated this ________ day of ________________, ________


______________________________ of ______________________________________
(the "Employer")


- AND -

______________________________ of ______________________________________
(the "Employee")



  1. The Employer and the Employee entered into an employment agreement (the "Employment Agreement") dated June 22, 2024, as amended.
  2. This Agreement does not replace the Employment Agreement but is a temporary supplement to it.

IN CONSIDERATION OF and as a condition of the parties entering into this Agreement and other valuable consideration, the receipt and sufficiency of which consideration is acknowledged, the parties to this Agreement agree as follows:

  1. The terms of the Employment Agreement, as amended, are amended by this Agreement.
  2. The Employee will receive an hourly wage of $_____________________________.
  3. The Employee's compensation will be payable twice per month while this Agreement is in force. The Employer may deduct from the Employee's compensation any deductions or remittances required by law.
  4. This Agreement is effective from June 22, 2024 until June 22, 2024.
  5. The terms of the Employment Agreement apply to this Agreement, except where the context requires otherwise.
  6. This Agreement takes precedence over the Employment Agreement unless a new employment agreement or similar agreement is later created.
  7. On the termination or expiry of this Agreement, the Employee's compensation will be set according to the employer's policies and procedures.
  8. Miscellaneous Terms
  9. The Employer and the Employee acknowledge that this Agreement is reasonable, valid and enforceable. However, if a court of competent jurisdiction finds any of the provisions of this Agreement to be too broad to be enforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable.
  10. In the event that any of the provisions of this Agreement will be held to be invalid or unenforceable in whole or in part, those provisions to the extent enforceable and all other provisions will continue to be valid and enforceable as though the invalid or unenforceable parts had not been included in this Agreement and the remaining provisions had been executed by both parties subsequent to the removal of the invalid provision.
  11. All negotiations and understandings have been included in this Agreement. Statements or representations which may have been made by any party to this Agreement in the negotiation stages of this Agreement may in some way be inconsistent with this final agreement. All such statements are unenforceable. Only the written terms of this Agreement will bind the parties.
  12. Any amendment or modification of this Agreement or additional obligation assumed by either party in connection with this Agreement will only be binding if evidenced in writing signed by each party or an authorized representative of each party.
  13. Time is of the essence in this Agreement.

IN WITNESS WHEREOF, the parties have duly affixed their signatures under hand and seal on this ________ day of ________________, ________


_________________________ (Print)




_________________________ (Print)

Last Updated October 12, 2023

Compensation Agreement

Alternate Names:

A Compensation Agreement is also known as a/an:

  • Salary Agreement
  • Employee Compensation Agreement
  • Compensation Contract

What is a Compensation Agreement?

A Compensation Agreement is used by an employer to record a negotiated change in wage or earning potential for an employee. As an example, after a new employee completed their probationary period, the employer and employee agree to a new wage amount in the form of a raise. Both parties could use a Compensation Agreement to document the change.

A Compensation Agreement acts as a supplemental form to an Employment Contract, in that it does not replace it, but rather amends or changes the details regarding employee compensation to the new terms.

What should be included in a Compensation Agreement?

A Compensation Agreement should include information about the parties involved (the employer and employee), and details about how the employee will be compensated for their work, like hourly wage, yearly salary, commission, etc. The agreement also needs to include how often the employee receives their wages, such as monthly or every two weeks.

LawDepot's Compensation Agreement prompts you to enter details about earnings as part of the questionnaire, but you can also add any additional clauses that might be unique to your situation.

As an example, a salesperson may be entitled to receive a bonus if they exceed sales targets during a business quarter.

What is the difference between a Compensation Agreement and an Employment Contract?

An Employment Contract typically covers things like the employment term (the length of time the employee will work with the company, if applicable), details about holidays, sick leave, and bereavement polices, as well as details about the initial compensation an employee receives when they begin their employment.

A Compensation Agreement is usually introduced at some point during the employment term (such as after a probationary period or an annual review process) to outline any changes in wages, like a raise or bonus, or even changes in non-monetary compensation, such as additional vacation or personal days. The agreement simply records the employee's updated wage amount and other details related to their new compensation terms.

Related Documents:

  • Employment Contract: An Employment Contract governs an employment relationship by detailing the rights, responsibilities, and obligations of both the employer and employee.
  • Employment Offer Letter: An Employment Offer Letter is a formal acknowledgement from an employer to an applicant offering them a position with the company.
  • Independent Contractor Agreement: An Independent Contractor Agreement is used to hire a contractor or freelancer to complete a job or provide a service.
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