Definition - What does Compensation Costs mean?
The compensation costs are the expenditures an employer has to pay in benefits to an employee while the employee is no longer able to work (whether temporarily or permanently) due to an injury sustained while on the job.
Safeopedia explains Compensation Costs
An employee injured on the job has to be compensated for lost earnings due to missed work days. This is usually paid in employee benefits, medical expenses, or paid leave, depending on the nature of the agreement between the employer and the employee.