Global HR Glossary

What are Wages?

Wages are compensation paid to employees based on the amount of time worked or tasks completed. Typically associated with non-salaried positions, wages are calculated at an hourly or daily rate, although some wage earners may earn piece rates or commissions based on performance.

Types of Wages

• Hourly Wages: Pay based on the number of hours worked, with overtime pay for hours worked beyond the standard workweek.

• Salary Wages: A fixed regular payment, but calculated on a weekly or bi-weekly basis rather than monthly.

• Commission Wages: Earned based on the sales or performance targets met by the employee.
  

Importance of Understanding Wages

• Financial Planning: Helps employees manage their budgets and financial plans.

• Legal Compliance: Ensures employers adhere to minimum wage laws and fair labor standards.

• Employee Motivation: Fair wage practices can improve job satisfaction and productivity.