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I want to say that one should make good the loss of other. Can I say;

I will compensate the damage from your payment.

If "from" in the sentence is ok, I have no further question. If it is not good there, please give some examples for providing the same meaning.

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    Are you trying to say that you will ADD TO the payment an amount to cover damages? Or that you will DEDUCT FROM the payment an amount to cover the damages? In either case, one does not "compensate" to or from a payment; one compensates the PERSON who suffered the loss/damage (perhaps by adjusting the payment.) – Brian Hitchcock May 11 '15 at 11:16
  • @BrianHitchcock "deduct from". – discoversf May 12 '15 at 8:28
  • Can I say "my damage will be compensated by him" @BrianHitchcock – discoversf May 12 '15 at 8:35
  • No, because you were not damaged, you wouldn't say "my damage"; and the other guy compensates you, not the damages. Better to say "{I will be compensated by him / He will compensate me} FOR {my loss / the damage}." – Brian Hitchcock May 13 '15 at 6:36
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We would say:

I will compensate you for the damage by deducting the amount from what you owe.

I will deduct the amount of the damage from what you owe, to compensate you.

The total amount due on the invoice reflects a deduction of $_________, to compensate you for the damage.

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