We present a derivation of two-point correlations of general tracers in the peak-background split (PBS) framework by way of a rigorous definition of the PBS argument. Our expressions only depend on connected matter correlators and “renormalized” bias parameters with clear physical interpretation, and are independent of any coarse-graining scale. This result should be contrasted with the naive expression derived from a local bias expansion of the tracer number density with respect to the matter density perturbation δL coarse-grained on a scale RL. In the latter case, the predicted tracer correlation function receives contributions of order ⟨δnL⟩ at each perturbative order n, whereas, in our formalism, these are absorbed in the PBS bias parameters at all orders. Further, this approach naturally predicts both a scale-dependent bias ∝k2 such as found for peaks of the density field, and the scale-dependent bias induced by primordial non-Gaussianity in the initial conditions. The only assumption made about the tracers is that their abundance at a given position depends solely on the matter distribution within a finite region around that position.