I read job postings and I can't figure out - What is the difference between wages and salary?
Short Answer: Wages are paid hourly and can vary; salary is a fixed annual amount paid regardless of hours worked.
Full Answer: The difference between wages and salary lies in how pay is calculated and distributed:
Wages:
Hourly-based: Paid per hour worked with a set hourly rate (e.g., $20 per hour).
Variable income: Total earnings can change each pay period based on hours worked, including overtime (1.5 times the hourly rate for hours over 40 per week, as required by the Fair Labor Standards Act (FLSA)).
Common for: Non-exempt retail, hospitality, and manual labor employees.
Example: If you work 30 hours a week at $20 per hour, your wage would be $600.
Salary:
Fixed annual amount: Paid consistently regardless of hours worked (e.g., $50,000 annually).
Predictable income: Divided into equal paychecks (e.g., biweekly or monthly), with no extra pay for overtime if classified as exempt under the FLSA.
Common for: Exempt employees in administrative, professional, and executive roles.
Example: If you earn $50,000 annually, you receive $1,923 every two weeks (based on 26 pay periods).
Key Differences:
Pay Structure:
Wages: Based on hours worked.
Salary: Based on fixed annual compensation.
Overtime:
Wages: Eligible for overtime pay.
Salary: Not eligible if exempt.
Job Types:
Wages: Common for hourly workers.
Salary: Common for professional roles.
General Federal Standard: The FLSA defines wage rules (hourly pay and overtime) and salary (exempt status and no overtime). Employers must comply based on the classification of the employee.