Global HR Glossary

What is a Salaried Employee? 

A salaried employee is an individual who earns a fixed annual compensation, irrespective of the number of hours worked. This type of employee is typically paid on a regular schedule—weekly, bi-weekly, or monthly—and receives the same amount in each paycheck, which is predetermined during the hiring process.

Characteristics of Salaried Employees

• Fixed Salary: Compensation does not vary with the number of hours worked.
• Job Type: Often in roles that require specialized skills or managerial responsibilities, such as in professional, administrative, or executive positions.
• Exemption from Overtime: Many salaried employees are classified as exempt from overtime under labor laws, meaning they do not receive extra pay for hours worked beyond the standard workweek.

Benefits and Drawbacks

• Pros:
  
  • Predictable income which facilitates easier personal budgeting.
  • Typically includes benefits such as health insurance, retirement plans, and paid leave.
  • May offer more flexibility in terms of hours and work arrangements.
• Cons:
  
  • May require working extra hours without additional pay.
  • Can involve higher expectations and greater responsibilities.