Wages Vs Salary - What's The Difference - Wattsnext

A wage is the employee remuneration based on the number of hours worked, multiplied by an hourly rate of pay. These hourly rates of pay are usually linked to ... Wagesvssalary–What’sthedifferenceHome→Blog→Wagesvssalary-What'sthedifferenceSalaryvsWages,getthefactsAlthoughsomepeopleusethetermsinterchangeably,thereisacleardifferencebetweenbeingpaidasalaryorawage.Thecorrecttermmustbeusedwhentalkingaboutemployeecompensation.ThebasicsA wage istheemployeeremunerationbasedonthenumberofhoursworked,multipliedbyanhourlyrateofpay.ThesehourlyratesofpayareusuallylinkedtominimumratesoutlinedwithinaModernAward.‘AboveAward’hourlyrateswouldalsobeconsideredwages.A salary istheremunerationofanagreedannualamount,paidatagreedintervals(i.e.,monthlyorfortnightly).Thisarrangementisessentiallyoutcomeandtaskfocusedratherthanbeingfocusedonworkingasetnumberofhours.IfyoursalariedemployeeiscoveredbyaModernAward,youmustbesurethattheirsalaryamountisequalto,orhigherthan,whattheywouldreceiveasawageforthesamerole.ThisiscalledtheBOOTorBetterOffOverallTest.AreallifeexampleWhileworkingwithaclient,Iwastalkingwithoneoftheiremployees.Thisemployeewasstrugglingtounderstandthedifferencebetweenbeingpaidasalaryversusanhourlyrate.Intheemployee’spreviousrole,theywerepaidforeachhourtheyworkedandanythingabovetheircontractedhourswaspaidatovertimerates.Intheirnewrolewiththeirnewemployertheywerepaidasalary–theirpaydidn’tchangenomatterhowmanyhourstheyworked.WagesBeingpaidanhourlyrateseemsstraightforward, yougetpaidforthehoursorparthoursyouwork.Anyhoursthatareadditionaltoyourcontractedhoursyougetpaidfor–ifyou’recoveredbyanEnterpriseAgreementorAwardyoumightevengetpaidovertimeratesontheadditionalhours–bonus!Thismeansyourpaycanfluctuatefromweektoweekdependingonthehoursyouworkandthereisopportunityforyoutoearnmoreifyouworkmorethanyourcontractedhours.SalarySalaryontheotherhandisanagreedamountofpaidovera12monthperiod.Inmostcases,itisgenerallyexpectedthatemployeeswhoarepaidasalarywillworkreasonableadditionalhourswithoutbeingpaidanyovertimefortheadditionalhourstheywork(providedtheirannualsalaryisnotlessthantheminimumentitlements theyareentitledtoundertheapplicableaward,agreementorNationalEmploymentStandards(NES).Asimplewayofthinkingaboutthisconceptisthattheroleisoutcomeandtaskfocusedratherthanfocusedonworkingasetnumberhours.Thisistheconcepttheemployeewasstrugglingwith.Theyfeltthatwhentheyhadworkedtheirhoursforthedayorweek,theyshouldbepaidfortheadditionalhourstheywereworking.Alternatively,theythoughttheyshouldhavetheoptiontogohomeratherthanstayinguntilthetaskorjobtheywereworkingonwasfinished.Itisimportanttonotethatthisemployerveryrarelyrequestedtheiremployeestoworklongerhours,butwhentheydiditwasforgenuinereasons.Inthisinstance,theemployerhadmadethedecisiontopaytheiremployeesan‘aboveaward’annualsalaryratherthananhourlyrate.Theemployertookintoconsiderationtheskillsandexperiencerequiredtoperformtherole,whattheminimumentitlementsundertheawardwouldbe,aswellasotherfactorssuchashowfrequentlytherolewouldberequiredtoworkadditionalhours. Allofthesethingswerefactoredinwhendeterminingwhattheremunerationfortherolewouldbe.Wemetwiththeemployeeandgavethemanopportunitytoraisetheirconcernswhichwewereabletosuccessfullyresolve.Clearasmud.Somepointstodiscuss.ExplainwhatasalaryisandtheconceptofasalarybeingoutcomeandtaskfocusedOutlinedtheprosofbeingpaidsalaryi.e.asalaryprovidesguaranteedincome,whichmakesbudgetingandsavingeasierExplainwhythebusinesspaysasalaryoverwages–Inmycase,theyhadanumberofgoodreasonswhy!Provideemployeewithabreakdownofwhattheywouldhavebeenpaidiftheywerepaidatawardrates.Thisshouldincludeovertimepenaltiesandleaveloading–Inmycasetheyweresurprisedtoseetheyweresignificantlybetteroffbeingpaidsalary!Calculatehowmanyadditionalhourstheemployeewouldneedtoworkthroughouttheyear,tobeworseoffthantheaward(wealsobrokethisdowntoaweeklybasis.) Onthisoccasiontheyweren’tworkinganywherenearthesehoursandtheywerealotbetteroffIfyouhaveanemployeestrugglingwiththesedifferences,weencourageyoutomeetwiththem.Explainthesalaryconceptandhavetheconversation.Moreimportantly,giveyourstafftheopportunitytoraisetheirconcernsandengagewiththemoverthematter.Sometimesasimpleconversationcangoalongway.I'dliketochatabout...GeneralenquiryConsultancyrequestCareeropportunitiesSomethingelse..CompanySize*Self-employed1-10employees11-50employees51-200employees200+employeesSubmitAbouttheauthorThewattsnextGroupblogisacompilationofideasandexpertisefromtheentireteam,pastandpresentwithafewaddedgemsfromguestauthorsfromtimetotime.Withthiscollaborativeapproach,wecanprovideyouwithabroaderperspectiveandhigh-levelexpertiseacrossthesmallbusinesslandscape.SubscribetoournewsletterSubmit×MON.-FRI./09:00-17:001300092887ServicesJobsBoard←BackAustraliaUnitedStatesClientPortfolioOurStoryImpactCovid-19SupportBlogTheUnconventionalLifeCareersContactUsFOLLOWUSONSOCIAL×[wd_hustleid="4"type="embedded"/]