The Various Components of a Salary


The Various Components of a Salary

A salary is a predetermined amount of money from an employer to an individual, which can be set in an employment agreement. In contrast with piece-based salaries, where every job, hour or whatever unit is paid for individually, and not on a regular basis. Salary is an agreement between an employee and an employer. Therefore, the salary should be fixed and should be paid on a regular basis, such that an employee is able to buy and maintain all his basic necessities.

The salary, as we understand it, does not mean the wage but the actual amount of money paid to an individual for every job done by him. In order to determine the salary, the company follows certain procedures. It calculates the number of hours worked, special skills required, years of experience, etc. Once all these are known, the salary is fixed. It does not matter if you get paid twice a day, once in the morning and once in the night, because, as a general rule, the same wages are given to all employees during the pay fixed period.

All employees are entitled to the same wage for the same work. However, this is dependent on various factors such as the amount of hours worked, age, gender, seniority, length of service with the company, other employment of the employee, length of contract, and so on. In order to calculate and establish the basic wage, the company must take into consideration all the factors that affect the operation of the business, as well as the overall performance of the firm. If a firm has a high turnover rate, it means that there is a lot of competition for jobs. Hence, the wages of the people playing an important role in the firm’s success, such as managers and employees, are also adjusted to keep pace with the fluctuating wages market.

Apart from the fixed salaries, another common type of salary offered by firms is the hourly wage. This type of payment is normally given to employees who perform special tasks or are hired on special contracts. The hourly rate includes the price of any special benefits offered by the employer and can also include tips. However, it does not include all the salary components. It usually covers the salary, deductions for late payments, and administrative costs.

Usually, the employers offer two forms of compensation to their employees: a fixed and an hourly wage. Sometimes they may need to take care of some aspects of the service, such as travel expenses, depending on the nature of the job. Hence, it is good to check with the human resources department of the employing company, and see what types of benefits are offered. Sometimes, the employer may need to provide a certain percentage of commission or bonus to employees who are performing particularly well or have special skills.

Finally, it is worth mentioning that there are two types of workers – exempt employees and employed employees. Exempt employees are normally paid low wages because they are not covered by a group insurance plan. If you are employed and are being paid a salary that is lower than the law says it should be, you can claim for some or all of the money you are owed. If you are a salaried employee who has been paid less than the law says it should be, you can ask for a negotiated settlement.