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Salary pay is a method of compensating employees for their work by providing them with a fixed amount of compensation over a designated period, typically annually. This is different from hourly pay or wages, where employees are compensated based on the number of hours worked. Salaried employees are usually not required to track their hours as they receive a consistent amount regardless of how many hours they work.
Salaried employees receive a predetermined amount of money, known as their annual salary, divided over specific pay periods, such as bi-weekly or monthly. This means they are paid consistently, even if the number of hours worked in a week fluctuates. For employees working on a salary basis, the amount of compensation they receive each pay period is calculated based on their annual salary. This salary is typically negotiated when they are hired and remains fixed unless there is a promotion or salary adjustment.
Salaried employees may be expected to work more than a certain number of hours a week without receiving additional pay, unless they qualify for overtime pay.
In the U.S., the Fair Labor Standards Act (FLSA) sets a salary threshold to determine whether employees can be classified as exempt from overtime pay. As of 2024, the FLSA's minimum wage threshold is $844 per week, which amounts to $43,888 annually. Employees earning less than this threshold, regardless of their job duties, are typically classified as non-exempt and must receive overtime pay for hours worked over 40 in a week.
For an employee to be exempt from overtime, they must meet both the salary threshold and job duties criteria outlined by the FLSA. If they earn below the threshold, they are generally entitled to overtime pay, even if their job involves administrative, professional, or executive responsibilities.
Salary pay is important for both employers and employees because it offers predictability and consistency. However, this pay structure can lead to overworked employees who feel compelled to work more hours. Here are key advantages and disadvantages of offering salary pay to your employees:
When you use a global employment platform like Playroll, you gain access to tools that make managing salaried employees easier by automating payroll and ensuring compliance with labor standards. Speak to one of our experts to find out how you can seamlessly hire, manage, and pay your team regardless of your chosen pay structure.
Salaried employees receive a predetermined amount of money, known as their annual salary, divided over specific pay periods, such as bi-weekly or monthly. This means they are paid consistently, even if the number of hours worked in a week fluctuates. For employees working on a salary basis, the amount of compensation they receive each pay period is calculated based on their annual salary. This salary is typically negotiated when they are hired and remains fixed unless there is a promotion or salary adjustment.
Salaried employees may be expected to work more than a certain number of hours a week without receiving additional pay, unless they qualify for overtime pay.
In the U.S., the Fair Labor Standards Act (FLSA) sets a salary threshold to determine whether employees can be classified as exempt from overtime pay. As of 2024, the FLSA's minimum wage threshold is $844 per week, which amounts to $43,888 annually. Employees earning less than this threshold, regardless of their job duties, are typically classified as non-exempt and must receive overtime pay for hours worked over 40 in a week.
For an employee to be exempt from overtime, they must meet both the salary threshold and job duties criteria outlined by the FLSA. If they earn below the threshold, they are generally entitled to overtime pay, even if their job involves administrative, professional, or executive responsibilities.
Salary pay is important for both employers and employees because it offers predictability and consistency. However, this pay structure can lead to overworked employees who feel compelled to work more hours. Here are key advantages and disadvantages of offering salary pay to your employees:
When you use a global employment platform like Playroll, you gain access to tools that make managing salaried employees easier by automating payroll and ensuring compliance with labor standards. Speak to one of our experts to find out how you can seamlessly hire, manage, and pay your team regardless of your chosen pay structure.
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Yes, salaried employees receive a fixed amount, even if they work less than 40 hours.
To ask your employer for salary pay, you should prepare your case, research company policy around salary pay, choose the right moment to ask, and communicate your desires and reasoning clearly.
Basic salary is the core amount of compensation an employee receives before any additional benefits, bonuses, or deductions.
Estimate how much an employee really costs. Use our free employee cost calculator to determine the true cost of employment.
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