Complete Difference Between Salary And Wages


Many at times we confuse ourselves with the terms wages and salaries. You will be forgiven to confuse the two with each other because to you they inadvertently mean the same thing (Getting paid for providing a service or supplying labour), but they are very different. 

In this post, I will take you through the main differences between wages and salary but before I take you through that let’s look at the simple definition of these two terms. 

Salary And Wages Simple Definition  

Wage is simply the money paid to labour (worker) after the production of an output. 

Salary is the money that someone is paid each month by their employer, especially when they offer a service such as teaching, banking, defense etc. 

Now that we know the definitions of both wages and salary let’s look at the main differences between these two. 

Differences Between Wages And Salary 

The key difference between salary and wages is that salary is fixed, i.e., it is predetermined and agreed upon by both the employer and the employee, but wages are not fixed and vary depending on the laborer’s performance.

Below are some of the important differences between wages and salary. 

1. A salary is a set sum of money paid to an employee in exchange for their work. Wage is a varying amount of remuneration based on the number of hours spent completing a specific amount of work.

2. Salary is paid to skilled workers who utilize their knowledge in their industries to generate money for the company. Wages are paid to semi-skilled or unskilled workers who labor on an hourly basis, such as carpenters, welders, and electricians.

3. In the case of salary, the cost is fixed, i.e. a monthly fixed sum is paid. Wages, on the other hand, have a variable cost since they might fluctuate depending on an individual’s day-to-day performance.

4. Salary is usually paid at regular periods, such as monthly. Wages, on the other hand, are paid on a daily basis for the amount of hours worked.

5. Extra hours worked by salaried employees are not compensated in any way. Wage earners, on the other hand, are compensated for the extra hours they put in.

Comparison Chart

Below is a comparison chat that highlight the key components that set wages apart from salary. This should help you grasp the difference between the two better. 

Basis Of Comparison Wages Salary
Meaning The money paid to labour (worker) after the production of an output per man hour The money that someone is paid each month by their employer, especially when they offer a service
Skills  Semi-skilled or unskilled Skilled Personnel
Type of cost Variable Fixed
Rate of payment Wage rate Fixed rate
Payment cycle Daily Monthly
Basis of Payment Performance hourly
Paid to whom Labaur Employees


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