wages and salary – meaning and difference


Wages and salaries are sources of money earned from human labour. Wages and salaries technically cover all compensation paid to employees for physical or mental activity, but they do not represent self-employment revenue. Total labour costs may include goods like cafeterias or meeting spaces that are maintained for the convenience of employees, therefore they are not the same as pay and compensation expenditures. Wages and wages typically include remuneration like paid vacations, holidays, and sick leave, as well as fringe perks and supplements like pensions or employer-sponsored health insurance. Additional compensation can be paid in the form of bonuses or stock options, many of which are linked to individual or group performance.

Wage is a term that is commonly used to describe an hourly labour. Hourly workers are usually paid according to a timetable that represents getting paid for the previous week’s labour.

A salary can be converted into an hourly rate by companies. For example, if a manufacturing company wishes to hire welders for an hourly rate of Rs.45,000 per year on a full-time schedule, a finance employee can divide the desired salary, Rs.45,000, by 52 weeks in the year. Then divide the result by the number of hours in a workweek, which is 40.

For example: Rs.45,000 / 52 = Rs.865.38 / 40 = Rs.21.63 per hour

Salary is a yearly sum agreed upon by the employer and the employee, and given to the employee on a regular basis for work completed in a certain capacity. Salaries might be paid once a month, twice a month, once a week, or once a week.

An executive manager’s annual pay might be Rs.180,000. If the salary is paid bi-monthly, on the 1st and 15th of each month, you may calculate the rate of pay on each paycheck by dividing the total salary by the number of payments made in a year.

For example: Rs.180, 000 / 24 pay periods = Rs.7, 500 per pay period

A salary is a fixed rate so it does not vary from paycheck to pay check.


Benefits Of Salaried Pay

Consistency: Except for bonuses, your employees are promised a specific amount each week or month. This makes budgeting easy because they’ll know how much money is coming in and going out.

Additional perks: Every year, salaried employees are entitled to a certain number of paid vacation days. Your company would agree on the amount of days ahead of time. Flexible working hours can also be agreed upon. As a result, employees can arrive an hour or two earlier and depart an hour or two later.

Higher wages: When compared to their waged counterparts, salaried workers have additional duties. To meet deadlines, salaried individuals may have to work longer than the typical workweek. Their remuneration reflects the compensation they receive for these responsibilities.

Disadvantages Of Salaried Pay

Overtime: Working overtime is one of the major drawbacks of salary income. Although salaried employees are entitled to overtime, keeping track of it can be difficult. An hourly employee would work extra and be paid only for the hours worked.

Pay cuts: Companies that are experiencing financial difficulties minimise costs by reducing employee salaries. Although waged employees are more likely to have their hours cut, their hourly rate is unaffected because they are only paid for the hours they work. While salaried employees may be required to work longer hours for no additional pay.

Public holiday pay: Waged workers are frequently paid more to work on public holidays such as Christmas or Easter, similar to overtime pay. Salaried employees may be required to work during holiday periods without additional pay, depending on the nature of your firm and contract.

Benefits Of Waged Pay

Payment for hours: An hourly salary has the advantage of paying people for the hours they really work. This means that if a worker works for eight hours a day, he or she will be compensated for those eight hours. If you ask an employee to work overtime, they will be compensated for it.

No contract: Contracts do not bind waged employers. They can change jobs if they locate a position that pays more for the same amount of time. Waged employees cannot be held liable for any legal requirements such as leaving before the agreed-upon period because they are not bound by a contract.

Less responsibility: Employees who are paid on a salary may be held accountable if something goes wrong at work. Wages workers bear less responsibility for the company’s growth.

Immediate pay: Waged workers, unless otherwise noted, are usually paid daily or weekly because their income is directly proportional to the amount of hours they work. Salaried employees, on the other hand, have to wait a month for their compensation.

Disadvantages of waged pay

Working hours: Waged workers get paid according to the hours they have worked. This means they would have to work extra hours to earn any extra pay.

Hours cut: If your company is going through financial troubles and you need to cut down on expenses, in most cases employee hours are the first to go, which means a smaller paycheck. But it also means the employee will still get paid for however many hours they work.

Benefits: There is no safety net for salaried personnel. If a waged employee is absent from work, even for medical reasons, they will lose pay. In most situations, they would also be denied medical insurance and pension contributions.


Following are the major differences between salary and wages:

  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 utilise their knowledge in their industries to generate income for the company. Wages are paid to semi-skilled or unskilled workers who labour 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 amount is paid. Wages, on the other hand, have a variable cost because they can fluctuate depending on an individual’s day-to-day performance.
  4. Once a salary is determined, it is fixed for the duration. In a wage system, however, a wage rate is always changing, and an individual is paid according to the current wage rate.
  5. Salary is usually received at regular periods, such as monthly. Wages, on the other hand, are paid on a daily basis for the amount of hours worked.
  6. A person’s salary is determined by his or her performance. Wages, on the other hand, are paid on an hourly basis, based on the amount of work completed in hours.
  7. Employees with the skills and efficiencies to complete office job are given a salary. Wages are paid to workers who participate in manufacturing processes and are paid on an hourly basis.
  8. Those who work in administrative or office jobs are paid a salary. Wages are paid to workers who work in manufacturing processes that require unskilled or semi-skilled labour.
  9. A salaried person’s performance is frequently rated on the basis of KRA, or key resultant area, which is determined for the month. The waged individual, on the other hand, has no KRA and is evaluated only on the basis of the hours worked.
  10. 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.


State of Madras and P.N. Ram Chander Rao

According to “The Minimum Wages Act 1948,” any notification not indicating the way and interval at which a special allowance made payable is to be adjusted is a deficiency and impaired by an apparent error of law.

Cashew Manufacturers and Exporters Association v/s State of Kerala

 In this case in 1999, the high court ruled that the government is not bound by the Advisory Board’s report According to “The Minimum Wages Act 1948”.

S.D. Basha and the State of Madras

In this instance, it was decided that a committee would be invalid if the people nominated to it lacked competence and experience. According to “The Minimum Wages Act 1948,” a committee of men with no knowledge or experience is prohibited.

Divisional Manager, Oriental Insurance Company, Ltd., Hyderabad v. Zarina Bee And Another 

The sole legal dispute in this matter appears to be whether the Insurance Company or the insurer is obligated to…pay the penalty or interest under Section 4-A of the Act for failing to comply with the award’s orders within the time limit. In this aspect, the law appears to be decided. It is impossible to assume that the insurance company will indemnify the owner or the insured.

Dr. Ajai Dhar Dubey v. State Of U.P And Another 

Presiding Officers of Industrial Tribunals/Labour Courts should have a thorough understanding of labour law. As a result of the fact that people are frequently assigned to these positions, we direct that people with specialised understanding of labour law be appointed to these positions so that cases are resolved quickly and judgements are of high quality… The government will fill the position of Presiding Officer of the Allahabad Labour Court, which has been vacant for more than a year.


Salary is a fixed sum of money provided to an individual at regular intervals for work completed in a particular period of time, whereas wage is a variable compensation given to an individual for the number of hours spent accomplishing a certain amount of work.


  1. Registered Marriage Under Special Marriage Act, 1954
  2. https://keydifferences.com/difference-between-salary-and-wages.html
  3. http://www.legalserviceindia.com/legal/article-1127-different-concepts-of-wages.html
  4. https://paycheck.in/labour-law-india/work-and-wages
  5. https://indiankanoon.org/search/?formInput=case%20on%20minimum%20wages&pagenum=5
  6. Labour And Industrial Laws by Meenu Paul (Allahabad Law Agency)

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