Base Pay

What is a Base Pay?

Base pay is a fixed amount of money paid by the employer to the employee for work performed. A base salary does not include benefits, bonuses or a hike.

Base pay is compensation offered by the employer in exchange of a specific work. The base pay is identified by certain factors, which include Market pay rates for people doing similar work in similar industries. The base rate varies significantly between professionals.

The base pay has also affected the number of people who are available to perform a specific job under the employer. For instance, higher base pay would be offered for a skilled professional or a service that requires special skills.

The base pay has also affected the number of people who are available to perform a specific job under the employer. The competition highlights the most wanted talent and salary speaks loudly.

Exempt Employees and Base Salary

Base salary may require an employee to do a job in certain hours. However, a salaried employee who is paid by base salary does not track the number of hours worked.

In some cases, some employees are expected to work limited hours such as 40 hours a week, in exchange of base pay. Employers are required to maintain an honour system to keep a record of the employee working hours.

Non-Exempt Employees Receive No Base Salary

This is a different concept from non-exempt or hourly employees who are paid hourly. Non-exempt employees are eligible to garner the overtime for hours worked over the basic 40 hours.

The hourly or non-exempt employee rarely has base pay. Some employers guarantee hourly employees so that they will pay them for their working hours. This assists the employees to plan financially, but it is not the same as receiving a base pay as exempt employees do. Here the payment is not guaranteed unless the hourly employee work in the needed number of hours

Base Vs Annual Salary

Annual salary accounts actual Earnings over the year. Whereas, the base pay excludes supplemental compensation received in the duration of employment.

Annual pay is higher than the base pay and it includes benefits like bonuses, overtime, medical, travel, HRA, etc.