Salary

Salary is a form of payment from an employer to an employee, which may be specified in an employment contract. It is contrasted with piece wages, where each job, hour, or other unit is paid separately, rather than on a periodic basis.

History

From the point of view of running a business, salary can also be viewed as the cost of acquiring and retaining human resources for running operations, and is then termed personnel expense or salary expense. In accounting, salaries are recorded in payroll accounts.

Determining salary

Salaries are fixed costs in nature as the salary amounts have to be paid regardless of the level of output. Including salary in the cost of goods sold results in lower gross profit, but it does not affect the net income because the total expenses remain the same.

Salary structure

The basic salary is a fixed amount paid to employees by their employers in return for the work performed or performance of professional duties by the former. Basic salary is a part of the total salary and it varies from one company to another.

Salary cap

In professional sports, a salary cap (or wage cap) is an agreement or rule that places a limit on the amount of money that a team can spend on player salaries. The limit exists as a per-player limit or a total limit for the team's roster, or both.

See also

• Wage
• Income
• Payroll
• Employment contract
• Personnel expense

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