The article explains the difference between wages and salaries, with wages being based on hours worked and salaries being a set amount per month. It also discusses commission-based pay and the importance of minimum wage laws and providing a living wage for employees.
A salary is a specific amount of money paid to an employee as measured by the amount of time they work. If you earn $10 US Dollars (USD) per hour, your wage is $10 per hour. You can also consider it by hours worked in a week. An employee who works 40 hours a week has $400 USD in weekly wages. The wages you earn are usually calculated before any deductions for taxes, insurance payments, or anything else, and represent your gross income. A more reasonable assessment of what you earn is your net income, which calculates how much money you actually take home.
Wages are different than a salary, although sometimes people use the terms interchangeably. Usually, wage earners earn a set amount of money per month, not based on hours worked. They may still be working at least 40 hours a week, but may need to work more when needed. Salary does not go up or down with time on the job; wages do. If you are a paycheck taking a day off without a vacation, the money you make in a month will be lower. Alternatively, if you work more than 40 hours a week, you could earn more money in a month and be compensated for overtime.
Some people who work don’t earn a salary or salary, but have their wages based solely on commissions. A person selling real estate may make no money one month and tons the next, depending on how the real estate market is and also on the skill set of the seller. Some people break even or base pay plus commission, or base pay plus tips.
Restaurant servers do the latter. They are paid the city or state minimal for their work, but most of their money comes from councils. These tips are part of your overall pay, but are not a salary. They are to be claimed as income but are not a reliable source of income and vary based on the number of customers you serve, your server skill and the generosity of the customers.
Many countries, states and cities have requirements for minimum hourly wages, and there is considerable concern about providing a “living wage” for employees. In larger cities, it can be very difficult to really live up to the bare minimum that a company has to pay you, and it can be impossible to support others as low-wage hourly employees. There have been several attempts in the United States to develop a federal federal wage requirement, but this is proving difficult. A living wage in New York City or Los Angeles should be much higher than one in other parts of the country where living expenses are lower.
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