What Is a Salary?

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A salary is a fixed amount of money paid to an employee for his work contribution. Regardless of how many hours were worked, the salary amount remains the same.

Companies use salary market surveys to determine fair salary amounts for their employees. Market pay rates for similar work in related industries and the number of employees available to perform the work are both taken into consideration when determining the salary amount. Employees who are paid by salary are called salaried employees. Salaried employees are expected to complete an entire job in exchange for a regular pay check. This differs from hourly employees, whose pay is commonly based on hours worked or on work completed.