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Global Work Glossary

Lost in a maze of global employment jargon? Find your way out with our handy collection of work and HR terminology

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Base salary

What is base salary?

Base salary, also known as base pay or basic salary, is the fixed portion of an employee’s compensation. This is the minimum they can expect to earn over the course of a year and doesn’t include bonuses, commissions, or other variable payments.

Basic pay is most often associated with salaried workers who receive a set rate of annual compensation that doesn’t depend on the number of hours they work. However, it can also be used to refer to hourly workers who receive a standard rate per hour outside of overtime pay.

For salaried workers, base pay can increase or decrease depending on performance reviews, promotions, and market changes. While a new hire might initially receive the minimum base pay within a pay bracket, as they continue to work at the company this could increase.

It’s important to understand the difference between gross pay and base pay, which may fluctuate more regularly. Gross pay is the term that encompasses all of the compensation an employee receives before tax, including benefits, commission, and more. Employees should consider these compensation packages as well as look at base salary when making a decision on a new role.

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