Pay (Wages, Salary)
When you have a job you may get paid a wage or a salary.
What are they?
Wages are a payment for work based on hours worked (or sometimes per day or per amount of work done).
It can be paid weekly, two-weekly, or monthly.
Example: Alex earns $20 per hour, and worked 40 hours last week so earned an $800 wage.
Sometimes you get paid at a higher rate, such as
- when working "overtime" (time worked over the normal working hours)
- when working on weekends or holidays
Example: Alex worked 2 hours extra on Tuesday, and earned $30 per hour (overtime rate) for those two hours.
So, that week Alex earned an extra $60 and got paid $860
Salary is payment for work based on a fixed amount per month or year. Usually paid weekly or monthly.
Example: Sandy has an annual salary of $120,000, which is paid weekly.
So Sandy gets about $2,300 per week.
When you are paid a salary you usually don't get extra for overtime work, but you often get other benefits.
The total amount is your Gross Pay, but we are not done yet!
No matter how you get paid, the government wants a share of it ... so that it can pay for social welfare, roads, the military and so on.
The more you earn the more the government wants from you. The rate of tax increases for higher income people.
The amount after tax is deducted is called disposable income.
As well as tax there can be other deductions! Money going towards your retirement, health insurance and so on.
After all the deductions have been deducted you end up with your net pay: the amount you can actually spend. Wisely I hope.