FiscalInsights
payroll

Salary

Fixed annual compensation regardless of hours worked.

A salary is a fixed amount of compensation paid to an employee regularly (typically bi-weekly or semi-monthly) regardless of hours worked. Salaried employees may be exempt from overtime if they meet the FLSA salary threshold ($43,888/year as of 2024) and perform exempt job duties. Salary provides income predictability for employees and cost predictability for employers.

Example

A marketing manager earns a $72,000 annual salary, receiving $3,000 gross pay each semi-monthly period regardless of whether she works 38 or 50 hours that week.

Why It Matters for Your Business

Salary structures affect employee expectations, budgeting, and legal obligations—ensure exempt classifications are correct to avoid overtime liability.

Related Terms

Hourly Rate

More Payroll Terms

Employee Benefits

Non-wage compensation like health insurance and retirement plans.

Gross Pay

Total earnings before any deductions.

Net Pay

The amount received after all deductions.

Overtime Pay

Additional compensation for hours worked beyond 40 per week.

Hourly Rate

Pay rate calculated per hour worked.

Related Financial Guides & Resources

Accounting 101 GuideFinancial Statements GuideTax Deductions GuideFinancial Reports Feature

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