Salary

We explain what salary is, what its origin and types are, and how it differs from salary.

factory workers
Salary is the economic remuneration that a person receives for their work.

What is salary?

Salary, also known as pay, salary or remuneration, is the amount of money a person regularly receives worker or employee in exchange for a specific working time.

The payment of a worker's salary normally is explicitly set to a employment contract , whether formal or informal, and is determined by the amount of time invested in the workday, that is, how much money is equivalent to each hour of work or service.

The calculation of this payment is also influenced by the type of work performed (for example, its level of risk), the degree of professionalization necessary to carry it out and even the time in which it must be carried out (for example, the work night work is usually better paid than day work). And the payment can be made monthly, biweekly, weekly (even daily and is now called wage), depending on the work arrangement that governs the work dynamic.

Salary is a key concept in the contemporary economy and its considerations around work. In fact, Among the fundamental human rights is the guarantee of a salary that allows one to live with dignity that corresponds to the value of the work performed and that is equitable between those who carry out the work. The latter is known as equal pay.

Why is it called “salary”? The term “salary” comes from Latin salariumthat is, “payment of salt.” Salt was a rare and precious commodity in ancient times, as it served as an antiseptic and to preserve food, which is why it became as valuable as gold. Around the year 500 BC. C. the saltpeter route was built through which salt entered Rome from the coastal city of Ostia Antica and the legionaries who guarded the road were paid for their service with a piece of salt.

Differences between salary and salary

The terms “salary” and “salary” are often used synonymously, since both refer to financial remuneration given to a worker in exchange for the work performed. However, there are important differences between one concept and the other.

You may be interested:  International Monetary Fund (IMF)

The main difference has to do with the mechanism used to calculate salaries and wages: a salary is a fixed, established income that takes into account working conditions but does not adhere to the calculation of hours worked; while a salary is the calculation of money owed for the number of hours worked in a given period.

This difference and others that derive from it can be summarized as follows:

Salary Salary
This is a fixed amount established in advance and paid monthly, biweekly or weekly. This is a variable amount established based on the calculation of the hours invested per month, fortnight or week in a job.
It is calculated based on the type of work performed, the professionalization required for it and the workload to be fulfilled. It is calculated from the sum of the hours invested in work, without taking into account other work aspects.
It normally includes work benefits of different kinds. It does not usually include employment benefits of any kind.

These distinctions, however, are not universal and in most cases both terms are used interchangeably.

Types of salary

We commonly talk about types of salary to distinguish between the different ways in which it can be calculated and made, such as:

  • Nominal salary. It is the type of salary that makes up the “payrolls” or lists of workers, to whom a position and a fixed series of responsibilities are assigned, and based on said organizational step, also, a determined payment amount.
  • Salary per unit of work. It is the type of salary that is received only when the work or service has been completed and/or provided, that is, a payment at the end of the agreed work.
  • Salary per unit of time. It is the type of salary that is paid for each hour of time spent at work, and those hours can be grouped by day, week, fortnight or month.
  • Mixed salary. It is the type of salary that combines aspects of the unit, work and time unit salaries.
You may be interested:  Textile Industry

On the other hand, it is possible to distinguish between the forms of salary according to how the payment is made:

  • Cash salary. It is one that is paid through the use of the country's legal currency, that is, through money, both in cash and through banking means.
  • Salary in kind. It is one that is paid through non-monetary goods (that is, other than money), such as products, tokens, bonuses or food.
  • Mixed salary. It is one that combines payment in cash and payment in kind, that is, the worker receives part in money and part in goods or merchandise.

Minimum wage

The minimum wage is susceptible to inflationary variations and the value of the local currency.

The minimum wage or minimum wage is the amount of money established by law as the minimum that can be paid to a worker in exchange for a standard period of work.

Ideally, this minimum amount of money should be enough for a person to meet their basic needs for food, transportation and health during a work period.

Thus, The minimum wage is calculated based on conditions that vary according to reality and legislation from each country. And, being susceptible to inflationary variations and fluctuations in the value of the local currency, it is often used as a measure of local quality of life.

The first minimum wage in history was established in the 19th century, in the Australian state of Victoria, after a series of workers' uprisings and strikes demanding better economic employment conditions. Along with the reduction of the working day to eight hours, the minimum wage is part of the main achievements of the demands of the working class in the world.

You may be interested:  Free Trade

References

  • Dobb, M. (1986). Wages. Translated Emigdio Martinez Adame. Economic Culture Fund.
  • National Institute of Statistics of Spain. (sf). Glossary of concepts. https://www.ine.es/
  • Royal Spanish Academy. (2022). “Job”. Language Dictionary. https://dle.rae.es/