There are different ways in which employees are paid for the duties or services they rendered to a company, organization, or industry. Some employees are compensated, some are paid wages while some are paid salaries. Here is the difference between compensation, wages, and salaries:
Compensation is a reward given to an employee in return for the work or duty performed or services rendered by them to the organization. Compensation may include financial payments like bonuses, overtime pay, profit sharing, sales commission, and recognition rewards, etc., it could also be nonfinancial perks like company-paid housing, company-paid car, stock opportunities, etc. Compensation could be a systematic approach to providing financial value to employees in exchange for the duty performed.
Wages are compensations paid to workers for duty performed in a company during a period. This payment is the particular amount paid in time intervals. This could be based on hours worked. Some employees received their payment on the amount of time worked. There could be a time card or timesheet to keep track of work in hours per week. Some modern employers have computerized systems that help them keep track of hourly employee hours.
Salaries are regular payments received by the employee from the employer for employment which is expressed either monthly or annually. An employee who receives a salary is paid a fixed amount of money each month. Their payments are supplemented with paid vacations and public holidays. Some employers determined the amount to be paid as salary by comparing what other people in similar positions are paid in the same position and industry.
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