Compensation vs. Restitution — What's the Difference?
By Tayyaba Rehman — Updated on September 15, 2023
Compensation is payment for services rendered or to offset losses, often in employment or business. Restitution is making good on a loss or damage, usually by returning lost items or their equivalent value, often mandated by law.
Difference Between Compensation and Restitution
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Key Differences
Compensation and Restitution are both financial terms that deal with the exchange of value, but they serve different functions. Compensation is generally a payment made for services provided, or to make up for some kind of loss or injury. Restitution, on the other hand, is the act of restoring something lost or stolen to its proper owner, or making good on a wrong done.
The intent behind Compensation is usually to balance an equation. This could be an employer compensating an employee for work done or a company compensating a customer for a faulty product. Restitution typically occurs when someone has wrongfully taken something from another and is mandated to return it or pay for its equivalent value, often as part of a legal judgment.
When it comes to the legal context, Compensation can be awarded for a wide range of things including personal injury, breach of contract, or wrongful termination. Restitution is more often associated with criminal cases or civil disputes where the aim is to make the victim whole by returning what was taken or its value.
From a grammatical perspective, Compensation is often used as an uncountable noun when talking about a general practice, but can also be countable when referring to specific instances ("a compensation"). Restitution is generally used as an uncountable noun, and is more specific to individual cases ("the restitution").
Comparison Chart
Primary Purpose
Payment for services or losses
Restore something lost or stolen
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Legal Context
Civil cases mainly
Criminal or civil cases
Intent
To balance an equation
To make victim whole
Countability
Both countable and uncountable
Generally uncountable
Scope
Broader applications
More specific to individual cases
Compare with Definitions
Compensation
Payment received for services rendered.
The worker received compensation for the hours he put in.
Restitution
Returning something lost or stolen to its owner.
The thief was ordered to make restitution of the stolen goods.
Compensation
Reimbursement for expenses incurred.
The employee got compensation for his travel expenses.
Restitution
A legal obligation to restore a loss.
The company faced a restitution requirement for environmental damage.
Compensation
The act of compensating or the state of being compensated.
Restitution
Reparation for a wrong or injury.
Restitution was deemed necessary for the victim's emotional distress.
Compensation
Something, such as money, given or received as payment or reparation, as for a service or loss.
Restitution
Restoration of something to its original state.
Restitution of the artwork involved careful restoration.
Compensation
(Biology) The increase in size or activity of one part of an organism or organ that makes up for the loss or dysfunction of another.
Restitution
The law of restitution is the law of gains-based recovery, in which a court orders the defendant to give up his gains to the claimant. It should be contrasted with the law of compensation, the law of loss-based recovery, in which a court orders the defendant to pay the claimant for their loss.
Compensation
(Psychology) The act of consciously or unconsciously changing one's behavior to offset a real or imagined deficiency, as in personality or physical ability.
Restitution
The act of restoring to the rightful owner something that has been taken away, lost, or surrendered.
Compensation
The act or principle of compensating.
Restitution
The act of making good or compensating for loss, damage, or injury; indemnification.
Compensation
Something which is regarded as an equivalent; something which compensates for loss.
Restitution
A return to or restoration of a previous state or position.
Compensation
(finance) The extinction of debts of which two persons are reciprocally debtors by the credits of which they are reciprocally creditors; the payment of a debt by a credit of equal amount.
Restitution
(legal) A process of compensation for losses.
Compensation
A recompense or reward for service.
Restitution
The act of making good or compensating for loss or injury.
Compensation
(real estate) An equivalent stipulated for in contracts for the sale of real estate, in which it is customary to provide that errors in description, etc., shall not avoid, but shall be the subject of compensation.
Restitution
A return or restoration to a previous condition or position.
The restitution of an elastic body
Compensation
The relationship between air temperature outside a building and a calculated target temperature for provision of air or water to contained rooms or spaces for the purpose of efficient heating. In building control systems, the compensation curve is defined to a compensator for this purpose.
Restitution
That which is offered or given in return for what has been lost, injured, or destroyed; compensation.
Compensation
(neuroscience) The ability of one part of the brain to overfunction in order to take over the function of a damaged part (e.g. following a stroke).
Restitution
(medicine) The movement of rotation which usually occurs in childbirth after the head has been delivered, and which causes the latter to point towards the side to which it was directed at the beginning of labour.
Compensation
The act or principle of compensating.
Restitution
The act of restoring anything to its rightful owner, or of making good, or of giving an equivalent for any loss, damage, or injury; indemnification.
A restitution of ancient rights unto the crown.
He restitution to the value makes.
Compensation
That which constitutes, or is regarded as, an equivalent; that which makes good the lack or variation of something else; that which compensates for loss or privation; amends; remuneration; recompense.
The parliament which dissolved the monastic foundations . . . vouchsafed not a word toward securing the slightest compensation to the dispossessed owners.
No pecuniary compensation can possibly reward them.
Restitution
That which is offered or given in return for what has been lost, injured, or destroved; compensation.
Compensation
The extinction of debts of which two persons are reciprocally debtors by the credits of which they are reciprocally creditors; the payment of a debt by a credit of equal amount; a set-off.
Restitution
The act of returning to, or recovering, a former state; as, the restitution of an elastic body.
Compensation
Something (such as money) given or received as payment or reparation (as for a service or loss or injury)
Restitution
The movement of rotetion which usually occurs in childbirth after the head has been delivered, and which causes the latter to point towards the side to which it was directed at the beginning of labor.
Compensation
(psychiatry) a defense mechanism that conceals your undesirable shortcomings by exaggerating desirable behaviors
Restitution
A sum of money paid in compensation for loss or injury
Compensation
The act of compensating for service or loss or injury
Restitution
The act of restoring something to its original state
Compensation
Money given to offset a loss or injury.
She received compensation for her medical bills after the accident.
Restitution
Getting something back again;
Upon the restitution of the book to its rightful owner the child was given a tongue lashing
Compensation
A system of rewards in an organization.
The company offers a competitive compensation package.
Restitution
Financial repayment for loss or damage.
Restitution was ordered for the vandalized property.
Compensation
Settlement in a legal case involving loss.
The court ordered compensation for the wrongful termination.
Common Curiosities
What is Restitution?
Restitution is restoring something lost or stolen, or its equivalent value, often mandated by law.
Is Restitution always legally mandated?
Restitution is often legally mandated, especially in criminal cases.
What is Compensation?
Compensation is payment for services or to offset losses, often in employment or business.
Is Compensation countable or uncountable?
Compensation can be both countable and uncountable, depending on the context.
Is Compensation always financial?
Compensation is usually financial but can sometimes be in the form of benefits or perks.
Can Compensation be voluntary?
Yes, Compensation can be voluntary, as in the case of a gift or tip.
Can Compensation occur in a legal context?
Yes, Compensation can be awarded as part of a legal judgment.
Can Restitution be voluntary?
While possible, Restitution is often mandated to make the victim whole.
Which is broader, Compensation or Restitution?
Compensation has broader applications, while Restitution is more specific.
Is Restitution countable or uncountable?
Restitution is generally used as an uncountable noun.
Is Compensation only for work?
No, it can also be for losses, injuries, or other forms of reimbursement.
Is Restitution only for theft?
No, it can also involve making good on any loss or damage caused.
Can Compensation and Restitution overlap?
Yes, in some cases, you may receive both Compensation and Restitution.
Is Restitution always part of a legal judgment?
Often, but not always; it can also occur as a moral or ethical act.
Is Restitution a form of Compensation?
Restitution can be seen as a specialized form of Compensation aimed at making someone whole.
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Written by
Tayyaba RehmanTayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.
