Base pay, or base wages, is the amount of money that an employee earns for performing duties which excludes any bonuses, raises, or other allowances. Base wages typically depend on the job and the employer. Some companies offer a salaried base pay, while others pay an hourly one. Salaried employees are often given a base amount each year. Hourly employees’ wages can fluctuate depending on how many hours are worked within a pay period.
Base pay often depends on wage standards within a particular country, state, province, or city. It is usually also specific to a particular industry and market. Some organizations have charts to explain and outline the pay structure for everyone who works for the company. The different branches of the U.S. military, for instance, each have pay charts that clearly outline what each position can expect as compensation for work.
When an employee is hired to a new position, he is often offered base pay that is reflective of his experience and the work he is expected to do. In other words this base salary is typically proportionate to the responsibilities of the position, so the base wage is usually higher for management or executive jobs. In a competitive job market, when employers want to attract the best possible employees, they may offer an increased base wage.
Hourly employees in the United States must be paid, at the very least, the federal minimum wage. Many states have a higher minimum wage than is required by U.S. federal regulations. Wait staff for restaurants may be paid a lower than minimum wage because they usually earn additional tips. Unlike salaried employees, an hourly employee may also be paid overtime and holiday pay for any extra work done beyond his usual hours or during national holidays.
Base pay may be increased by bonuses. Companies may choose to give employees bonuses for outstanding work performance, holidays, and punctuality. An employee may also earn a bonus for completing a specific task in a timely or extraordinary fashion.
Promotions can also affect an employee’s base wage. If he is given more responsibilities, his pay will usually reflect this increase. Demotions, on the other hand, can reduce a person’s base wage. Demotions can occur because an employee made a mistake that was not egregious enough for termination, but serious enough to negatively impact his role in the workplace.
If an employee is transferred within his company, his base pay may change depending on the city and economic climate he is moving into. Companies may also opt to pay for moving expenses for employees that are being transferred. In most cases, these costs are not included in base wage calculations.