Salary vs Wage: What Are the Differences?
Do you know the difference between salary and wage? It’s a fundamental concept but one that lots of people get wrong!
You’re not alone in wanting to gain a greater understanding of what the term salary vs wage means. After all, when you’re looking for a job, you want to ensure you take advantage of the best compensation package possible.
When you’re on the hiring side, not understanding the difference can impact your ability to attract the best employees.
So, let’s take a look at what salary vs wage is and when to use each.
Salary vs Wage: The Major Differences
Technically speaking, salary and wage are nearly identical. They both represent the amount of money you make. They both show up on your paycheck stub.
However, there has always been a bit of confusion between the two. This confusion isn’t surprising, especially when you consider that the two terms can overlap significantly.
Even though many elements of the two are similar, they are still different. That difference is extracted in how they are determined and paid.
What is a Salary?
Salaries are usually paid out weekly or monthly, while wages are not. That’s why salaried employees typically enjoy a higher degree of job security and are less likely to be affected by changes in the economy or their industry.
In terms of salary vs wage, generally speaking, salaries are higher than wages. That’s because salaries are usually reserved for employees who have more experience and/or specialized skills.
In terms of overtime pay, salaries are typically exempted. This is because they are working for more hours than required.
However, it’s important to note that not all salaried employees are exempt from overtime pay. In order to be exempt, an employee must meet certain criteria set by the Fair Labor Standards Act.
What are Wages?
Wages are usually based on the number of hours an employee works. The employee is paid an hourly rate, and the total amount of money they receive each week or month will vary based on how many hours they worked.
Moreover, wages are not exempted from overtime pay. This is because there is no number of hours required for you to render before you are eligible for an overtime pay.
For some, they consider the hourly wage better because it offers more flexibility and potential for more money. If you are interested for more wage guides, here’s a list of questions to ask.
Which is Better: Salary vs Wage?
A salary is a set amount of money that a person earns, whereas a wage is an hourly rate that an employee receives for their work. The term “salary” is most often used when referring to white-collar workers, such as office workers, whereas the term “wage” is most often used when referring to blue-collar workers, such as factory workers.
Salary vs wage, which is better? That depends on many things, including the nature of the job, the employer, and the employee’s personal preferences.
Browse our website for more informative posts like this one. We publish content centered on various aspects of business so you can stay ahead of the curve.
