0 hidden charges. 0 forex
debit-card
Save money without knowing it on Fi

The Difference Between Wages & Salary

article image

The Difference Between Wages & Salary

Table of Contents

India has the most competitive labour prices in all of Asia! So, it’s no wonder that the difference between wages and salary has often been a hot debate here. This blog examines the definitions, benefits, and drawbacks of wages vs salary.

Salary vs Wage: What's the Difference?

  • Salary is often an annual sum with a predetermined trajectory of increases over a set length of time. Hourly wages remain fixed, and a person's earnings fluctuate according to their work schedule.
  • Wages are given for unskilled or semi-skilled labour. Salaries are typically connected with skilled labour.
  • Payout of salaries usually takes place weekly, biweekly, or monthly. Typically, wages are paid on a daily or weekly basis.
  • Regular employees of an organisation, bound by professional contracts, are typically given salaries. Wages may be paid without formal agreements.
  • Salaried workers often receive several benefits that wage workers do not.

Advantages of a Salary

Consistent Pay Calculation

Employees gain from knowing they will receive fair compensation. Payroll departments will also profit from this uniformity as they will be better able to issue all cheques at regular intervals. 

Pay Reflecting Responsibilities

Salaried professionals often have more responsibilities than hourly workers. They are occasionally required to put in extended hours and as a result, they frequently receive more compensation. 

Benefits & Perks

Paid leaves or flexible work schedules are more likely to be negotiated with employers for salaried employees. They occasionally receive benefits like remote work, pay, and insurance. Additionally, some firms could offer their staff members housing subsidies, vacation packages, and company-owned vehicles.

Disadvantages of a Salary

No Additional Pay

Salaried people are not entitled to overtime pay. Their salary is all the employees receive, and other aspects are solely the employer's consideration. 

On-Call

Some workers work odd hours or are available for lengthy periods. Regardless of their pay, employers only select workers who can handle the company's needs. They may also have issues if a poor work-life balance results in employee turnover or ill health.

Bonus Dependencies

Salaried staff may miss out on the chance to receive a bonus — if performance benchmarks are not reached.

Advantages of Wages

Work Hours

Employees get paid for their real working hours. Overtime compensation is a benefit for employees who put in more time than is required for full-time employment; this may later enable them to work flexibly.

Fewer Responsibilities

Wage-earners benefit from having fewer obligations and duties related to their jobs. Most of the time, it is assumed that they can finish their work on an hourly basis. 

No Contract

Hourly workers may not be bound by agreements that demand they stay with a company permanently. People are free to change their jobs whenever and however they like. 

Disadvantages of Wages

Cuts

Wage workers receive payment for every hour they put in. Since hourly workers often don't have set hours, struggling firms could opt to start by reducing their hourly workforce.

Lack of Benefits

Hourly workers may not get paid time off (PTO), provident funds, insurance policies, and travel expenses. 

Frequently Asked Questions

1. What is the difference between fixed wages and a salary?

Fixed salaries may vary depending on the field of work and the employee’s experience and/or qualification. India has the most competitive floor wages in all of Asia. As of October 2022, the national minimum salary is about ₹178 per day or ₹5340 per month - rates vary based on geographic location & other factors.

2. What is the difference between salary and wage remuneration? 

Remuneration, aka overall compensation for employment, implies salary, bonuses, benefits, etc. Salary, which refers to the agreed-upon amount paid in exchange for the labour provided, is included in the remuneration.

The major difference between wages and salary is that a wage earner gets compensated by the hour — whereas salaried employees receive set payments every pay period.

Time to switch to Fi. Smart banking and only that.
Related Posts
Get the Fi app