What is 'Recompense'

Recompense is the act of awarding a target person, group or entity some form of monetary benefit as a result of the target performing some action or as a result of some action happening to the target. This is one of the main tenets of capitalism, as people perform a task as a result of being paid some sort of relevant incentive.

For example, companies may pay its workers with a special cash bonus as a result of the workers' efforts in contributing to the company's profits. However, a company may have to pay a compensation as a result of an injury that happened to the worker as a result of the company's negligence.

BREAKING DOWN 'Recompense'

Recompense payments award a targeted person, group or entity with some form of monetary benefit as a result of previous actions performed or occurrences of legal loss. Entities often use recompense payments to reward employees for high performance or goals achieved. Court actions also often include required recompense payments for losses from expenses incurred over a specified action or series of tasks.

Recompense payments are one of the main tenets of capitalism. They provide relevant incentive for actions and tasks performed through assurance of due payment. In a capitalist society, these payments can be relied upon because of the standards set by legal frameworks for citizens and businesses.

Recompense Payment Examples

As an example, companies may pay its workers with a special cash bonus as a result of the workers' efforts in contributing to the company's profits. These special cash bonus payments are often contingent upon past performance levels achieved or corporate goals attained during a previously specified period of time.

Recompense payments are also often referred to in worker compensation cases. In worker compensation cases, companies may be required to pay recompense payments as compensation for past injury or harm incurred by an employee as a result of work on the job or the company's negligence.

Companies under business organization often have reserve funds allotted for various types of recompense payments. These funds are typically paid into on a regular basis to allow for appropriate and timely payout of recompense payments or rewards. Payments of recompense are denoted as a liability on corporate balance sheets.

In the case of a legal matter, an individual or entity may be required to make recompense payments as compensation for past damages or losses incurred through the course of a series of events or tasks under judgment in a legal proceeding. Expenses eligible for recompense may occur throughout the duration of a case in legal court. In legal court cases, expenses for recompense are required to be paid in full to the damaged party upon a legal order by the court. Terms of legal recompense payments are typically outlined and awarded based on the court’s legal view of just and adequate compensation for loss or damages.

RELATED TERMS
  1. Workers' Compensation

    Workers' compensation is a publicly-sponsored system that pays ...
  2. Payment Option ARM Minimum Payment

    A payment Option ARM Minimum Payment is an option to make minimum ...
  3. Down Payment

    A down payment is a type of payment made in cash during the onset ...
  4. Transfer Payment

    Transfer payments, in the United States, are payments made to ...
  5. Finality Of Payment

    Finality of payment refers to when a payment to another party ...
  6. Guaranteed Payments to Partners

    Guaranteed payments to partners are payments meant to compensate ...
Related Articles
  1. Tech

    Is the Payment Processing Industry Evolving? (PYPL, TGT)

    Learn about the many changes in commerce and payment systems that are happening in the rapidly evolving payment processing industry.
  2. Investing

    Evaluating Executive Compensation

    Learn about the different types of CEO compensation, where you can find this information, and how it can affect your investments.
  3. Personal Finance

    Is Making Biweekly Mortgage Payments A Good Idea?

    Do you think making two payments a month for your mortgage is a good idea? Think twice about that. We tell you why.
  4. Managing Wealth

    A Guide To CEO Compensation

    Learn everything you need to know, with our guide to CEO compensation.
  5. Investing

    How to Save Money on Your Mortgage

    These strategies can potentially save you thousands of dollars over the length of a mortgage.
  6. Tech

    How Digital Payments Will Change Commerce in 2016

    The way we transfer and spend money is constantly evolving, and 2016 is poised to expand digital payments like we've never seen before.
  7. Personal Finance

    5 Tech Companies With High Stock-Based Compensation (GOOGL, AMZN)

    Examine stock-based compensation among large tech firms to determine which factors are driving equity compensation and how executive grants are determined.
  8. IPF - Mortgage

    Understanding the Mortgage Payment Structure

    When you get a mortgage to buy a home, you need to understand the structure of your payments, so you know how expensive the whole thing will ultimately be.
  9. Financial Advisor

    What Is Mode of Premium?

    Your decision on how frequently to make life insurance payments, or your mode of premium, can have a big impact on your total costs.
RELATED FAQS
  1. What's the difference between cash-on-delivery differ and delivery against payment?

    Find out more about cash on delivery and delivery versus payment transactions and the difference between these two types ... Read Answer >>
  2. How Should You View a Balance of Payments Deficit?

    Discover how it might be possible to run a balance of payments deficit, what causes them in international trade and whether ... Read Answer >>
Trading Center