Difference between Wage and Salary

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Organizations require huge human activities to achieve their and for the development of the organization. The management of an organization uses the term ‘compensation’ to denote the cost of using the human resources in the organization. There are many types of compensation according to their functions like wages, salaries, incentives, monetary benefits, etc. The compensation policy of an organization depends on various factors like government policies, skills of the employees, job conditions, risks associated with the job, etc. This article concentrates on communicating the differences between Wages and Salaries.


‘Wage’ is the term which specifies the compensation paid to the person in return to the job he had done in the organization. The wages are given daily, weekly or fortnightly and the compensation to be paid is determined by considering the hours worked by the person. Wages are paid to the blue-collar workers who involve in technical, manual and more of a physical work.

The government prescribes a certain wage rate to the workers in every industry and the companies must follow the policies of the government in deciding the pay of the workers who are working in their companies. The wage rate is fixed based on the skill of the worker, cost of living in the locality, the scarcity of the workers with required skill, the risks involved in the job, etc.


Salary is the term which specifies the compensation paid to the employees of the organization in return for the contribution of an employee towards the organization. Salaries are paid to the white-collar employees, managers, professional, etc. The salaries are paid monthly or annual basis to the employees. The salary is fixed according to the qualifications, the ability of an employee to perform the job, experience, etc.

There are many benefits which the salaried employees enjoy like salary increments, incentives, promotions, bonuses, etc. which will motivate the employee to perform better and helps in developing a sense of belongingness among the employees towards the organization. Some organizations pay huge salaries to their employees to attract highly talented employees to join in their organization and also for retaining the existing talent.


The wages are paid to the workers in an organization. The salaries are paid to the employees in an organization.
The wages are given to the people who are involved in manufacturing activities, technical, manual and physical activities. The salaries are given to the people who are involved in administrative work like office jobs, etc.
The wages are paid daily or weekly or fortnightly based on the hours worked. The salaries are paid monthly or annually based on the performance of an employee.
The wages are the remuneration to the 'Blue-Collar' workers. The salaries are the remuneration to the 'White-Collar' workes.
The wage based workers can get extra payment if they work for additional hours. The salary based employees cannot get extra payments for extra hours.
The wage rate is not fixed throughout the period and usually, keeps on changing. The salary is fixed at the time of joining of an employee and it won't change unless the employee gets increment.


The wage based workers have to work daily to earn money for their livelihood and there is no paid leaves concept for daily wage earners. whereas, the salaried employees can avail paid leaves, sick leaves, perks, etc. which is a huge benefit to the salaried employees. From the above discussion, it is evident that the wages and salaries are different and cater different needs of different people.