Salary vs. Wages: What’s the Difference?
The main difference between salary and wages is that salary is a fixed amount paid on a regular basis whereas wages are based on an hourly rate.
Before we move to more differences, let’s first understand Salary and Wages:
- Salary: Salary refers to a predetermined fixed amount of money paid to an employee for their work, usually on a monthly or annual basis.
- Wages: Wages are payments made to employees based on an hourly rate or the number of hours worked.
Now, let’s get to Salary vs Wages:
Major differences between Salary and Wages
| Salary | Wages |
|---|---|
| Salary remains constant regardless of the number of hours worked. | Wages fluctuate based on the actual hours worked during a pay period. |
| Salary employees are generally exempt from receiving overtime pay, as they receive a fixed amount regardless of the number of hours worked. | Wage employees are eligible for overtime compensation when they work beyond the standard hours specified by labor laws. |
| Salary is commonly associated with professional or managerial positions. | Wages are more prevalent in hourly or manual labor jobs. |
| Salary positions often come with employment contracts that outline the terms and conditions of employment. | Wages may be subject to collective bargaining agreements or minimum wage laws. |
| Salary employees often enjoy additional benefits and perks, such as paid time off, health insurance, retirement plans, and bonuses. | Wage employees may have limited access to these benefits or receive them at a reduced level. |
So, these are the main differences between the entities.
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