A salary is a fixed amount of money employers pay employees in exchange for their work.
A salary is a fixed amount of money employers pay employees in exchange for their work. Despite being presented as an annual figure in employment contracts, a salary is paid at regular intervals ranging from weekly to bi-weekly or monthly.
Salary is often confused with the term “wages”. Despite both being forms of payment, salary and wages signify two different types of work. Wages refers to hourly or daily rates that may vary depending on hours worked and performance. A worker will earn wages or a specific rate if they are working a contract role, which are often short-term and have no annual amount specified by the employer. Permanent roles, on the other hand, are long-term positions that offer employees benefits such as learning and development, promotions, and a structured career path. For these roles, the income amount will be listed as an annual sum per year – classifying them as salaried positions.
History of salaries
In Roman times and the Middle Ages, salt was a precious commodity. It’s ability to preserve food, specifically meat and fish, meant that demand was incredibly high – which eventually landed it the nickname 'white gold'. Salt became so valuable, in fact, that it started being used as currency for soldiers in the Roman army. The soldiers’ monthly allowance was called a 'salarium' ('sal' being the Latin word for salt). Over the years, the Latin root has made its way into multiple languages - including the French word 'salaire', and eventually, the English word 'salary'.
Recent trends in salaries
In terms of salary, professionals with STEM skills are doing exceptionally well. In the United States, STEM graduates have the highest average starting salary at $57,900 per year and the highest mid-career salary at $108,300 per year. The average median salary for STEM workers in America is double that of their non-STEM counterparts ($100,900 versus $55,260 in 2023) and the average median hourly wage for STEM roles is $38.85 – a figure much higher than the median earnings for other sectors ($19.30).
While STEM salaries are on the rise, inequalities continue to exist. In a study conducted by the Royal Academy of Engineering and WISE, it was revealed that only 12% of engineers in the UK, for example, are women – and that they earn roughly 11% less than men on average. This indicates that the STEM sector still has significant work to do in terms of pay equity for women in STEM.
Advantages of salaried positions
- Salaried positions receive consistent pay.
- Salaried employees often have more job security compared waged workers.
- Salaried positions often have clear avenues for career development.
- Salaried employees are more likely to have better benefits such as employer health care, pension contributions, paid holiday time, gym memberships and childcare reimbursements.
- Within certain companies, a percentage of an employee’s overall salary may be given as a bonus if the individual has exceeded expectations.
Disadvantages of salaried positions
- Due to financial pressures, some companies may not be able to match pay to the surge in inflation – causing the value of an employee’s salary to decrease in the long-term.
- Depending on their contract, salaried workers may have to work over holiday periods without extra pay, while waged workers are often paid more during these periods.
- Some salaried employees do not receive overtime pay, regardless of the number of extra hours they work.