A penalty was the punishment imposed upon a person who had violated the law, whether or a contract, a rule, or regulation.
In K-7's bar, while Cyrano Jones was being given a choice by Captain James T. Kirk and Spock, Kirk asked him, "You know what the penalty is for transporting an animal proven harmful to human life?", while Spock calculated that "The penalty is twenty years in a rehabilitation colony." (citation needed • edit)