A wage refers to a form of compensation paid by employer to the labor for working specific period of time. It is a variable pay system that workers get paid on the basis of time (generally hours) they spent to complete the job. On the other hand salary is a form of pay system where employees receive fixed amount of payment for their performance. It is fixed pay system because fixed amount of money is paid to the workers on monthly basis.
Difference Between Wage And Salary
The major dissimilarities or difference between wage and salary can be highlighted as follows:
1. Introduction
Wage: Type of compensation paid by the employer to the workers on the basis of hours they spent.
Salary: Regular and fixed amount of payment paid by employer to the employees in the organization.
2. Nature
Wage: It is variable in nature, because workers get payment on the basis of working hours. It means more wages for more work and vice versa.
Salary: It is fixed in nature because employees get fixed amount of payment at the end of every month.
3. Pay Period
Wage: It is paid on hourly or daily basis
Salary: It is paid on monthly basis
4. Type Of Worker
Wage: It is paid to semi-skilled and unskilled labors production related workers)
Salary: It is paid to skilled employees (official workers) .
5. Based On
Wage: It is based on working hours
Salary: It is based on the performance and position of employees
6. Extra Payment
Wage: There will be extra payment for additional working hours.
Salary: It is fixed cost, so there will be no extra payment for additional work.
7. Incentives And Benefits
Wage: Wage earners do not get incentives and extra benefits.
Salary: Salaried employees get incentives and other forms of benefits
8. Paid Holidays
Wage: No paid holidays for workers
Salary: Employees can enjoy paid holidays.
Wage Vs Salary (Comparison Chart)
Basis
|
Wages
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Salary
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Nature
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Variable
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Fixed
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Pay Period
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Hourly or daily basis
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Monthly basis
|
Type Of Workers
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Unskilled and semiskilled labors
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Skilled employees
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Based On
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Total worked hours
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Position and performance
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Extra Payment
|
Yes, for extra hours
|
No
|
Extra Benefits
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No
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Yes
|
Paid Holidays
|
No
|
Yes
|
Distinction Between Wage And Salary In Short
- In wage system employees get paid on hourly or daily basis. But salary is paid on monthly basis.
- Wage is suitable for semi-skilled and unskilled manpower. Salary is suitable for professional manpower.
- Wage is variable in nature because workers are paid on the basis of hours they spent (knows as time rate system of wage payment) or number of works they completed (known as piece rate system of wage). Conversely, salary is fixed in nature because workers get fixed amount of payment at the end of every month.
