What Is a Base Wage Rate?
The base wage rate is the minimum amount agreed upon during the hiring process and does not include benefits, bonuses, taxes, deductions, or modifications. It may not be lower than the federal or state minimum wage rate and is based on factors such as pay rate, schedule, and profession. Base pay and base salary are synonymous but do not include additional compensation such as overtime pay or bonuses. Similarly, gross pay and gross salary include additional compensation.
A salaried employee is paid a consistent base/gross salary regardless of the hours required to complete their work. Annual salary may be the same as base salary if no additional compensation is earned. The minimum payment amount that can be paid to a worker is the federal or state-specific minimum wage requirement. Employers set a salary range for each job role, and the specific base pay within the range is determined by work experience and time working for the company. Payroll admins need to generate actionable reports for tax functions and business strategy. A well-designed compensation plan goes beyond budgeting and also includes non-financial incentives.