Base salary is the predetermined amount of money an employee receives for their work, typically expressed as an annual figure. It does not include variable components like bonuses, overtime pay, or allowances. Base salary provides financial stability and forms the foundation of an employee’s overall compensation.
Base pay is the fixed amount of money an employee receives for performing their job, excluding bonuses, overtime, commissions, or benefits. It serves as the foundation of an employee’s total compensation package. Base pay is usually determined by factors like job role, skills, market rates, and experience.
Back pay refers to wages that an employer owes an employee for work already performed but not properly compensated. It may result from payroll errors, underpayment, wrongful termination cases, or delayed raises. Back pay ensures employees receive the full amount they are legally entitled to.
An allowance is a set amount of money provided by employers to employees in addition to their regular salary. It is usually given to cover work-related expenses such as housing, transportation, or meals. Allowances can be taxable or non-taxable depending on local labor and tax laws.
Accrued payroll is the total amount of wages, bonuses, and benefits employees have earned during a period but haven’t yet been paid. It is recorded as a liability on the company’s balance sheet until payment is made. This practice ensures financial accuracy and shows the company’s short-term obligations to its workforce.
Accrual payroll is the accounting method where employee wages, benefits, and related expenses are recorded when they are earned, not when they are paid. This ensures accurate financial reporting and helps businesses match payroll costs with the correct accounting period. It provides a clearer picture of a company’s obligations and cash flow.
The 14th Month Pay is an additional salary payment some employers provide on top of regular wages and the 13th month pay. It is often given as a mid-year or year-end bonus to reward employees and boost retention. While not mandatory in all countries, it is a common practice in parts of Europe, Latin America, and Asia.
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