This research aims to analyze the Effect of compensation on Work Motivation as intervening and its effect on Employee Performance. The object of this study is PT Indomobil Nissan Datsun Bantul, located on Jl. Ringroad selatan Taman Tirta, Jadan, Tamantirto, Kasihan, Bantul, Yogyakarta 55184. This study used a saturated sampling technique or total sampling with the number of samples in the study of 51 employees. And the data analysis technique used is to use Path Analysis. Based on the results of the regression test analysis in this study the results showed that compensation had a significant positive effect on work motivation. Compensation has a significant positive effect on the performance Work motivation had a significant positive effect on the performance. While for the indirect effect of compensation on performance through work motivation has significant effect, the results of t count > t table.