Base salary, also known as basic salary or base pay, is the fixed amount of money an employee is paid by an employer in exchange for their work, before any additional compensation or deductions are applied. It is typically agreed upon during hiring and can be expressed as an hourly rate, monthly income, or annual salary
. Key points about base salary include:
- It excludes bonuses, commissions, overtime pay, benefits, and other additional earnings or deductions such as taxes and insurance premiums
- It is the guaranteed, stable pay that forms the foundation of an employee’s compensation package and is often the basis for calculating raises, bonuses, and other incentives
- Salaried employees receive a consistent base salary regardless of hours worked, unlike hourly employees who are paid based on hours worked and may receive overtime pay
- Base salary is the gross amount before taxes and deductions; the amount received after these are subtracted is called net pay or take-home pay
- Employers determine base salary based on factors such as job role, experience, qualifications, and market conditions
In summary, base salary is the fixed, pre-tax pay an employee earns for their regular work, excluding any variable or additional compensation
