Difference Between Salary and Wages




Salary is a fixed periodical payment paid to a person for regular work or services; a wage is usually paid by the day or week for work or services which are of a more irregular nature.

Wages is best associated with employee compensation based on the number of hours worked multiplied by an hourly rate of pay. For example, an employee working in an power plant might work 40 hours during the work week. If the person’s hourly rate of pay is $15, the employee will receive a paycheck showing gross wages of $600 (40 x $15). If the employee had worked only 30 hours during that week, her or his paycheck will show gross wages of $450 (30 x $15). Because the paycheck needs to be computed based on the actual hours worked, the employee earning wages will likely receive her or his paycheck few days after the work period.

Salary is best associated with employee compensation quoted on an annual basis. For example, the manager of the power plant might earn a salary of $120,000 per year. If the salaried manager is paid semi-monthly (perhaps on the 15th and last day of each month), her or his paycheck will show gross salary of $5,000 for the half-month.

Another example of a job that gets a salary is a teacher. It doesn't matter how much homework they grade over weekends and vacations, they get the same amount of money.

Generally, the hourly-paid employees will earn wages at the rate of time and one-half for the hours in excess of 40 per week; for instance if you get paid like $6.00 per hour then if you work more then 40 hours in one week then you are entitled to overtime which is time and a half so after 40 hours you would then be making $9.00 per hour.
The salaried employees in high pay positions are not likely to receive additional pay for the hours in excess of 40 per week. However, employees with low salaries are entitled to overtime pay. (In the U.S. see your state’s laws and the federal wage and hour laws.)

If you are given the choose between the two and you know that the job is very time consuming then it is more wiser to take an hourly pay (wage) then a salary pay.

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