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Terms and Definitions

What is an annual wage?

Updated: June 13, 2024

Annual wage definition and meaning

An annual wage is the amount of money an employee earns in a year. Specifically, it refers to a fixed salary, or total expected payment, for the work an employee completes. It is usually a before-tax estimate, or a gross wage before deductions have been applied.

 

More about annual wage

Annual wages are different from total annual compensation because they don’t include the value of any other benefits, bonuses, insurance plans, paid time off, or other perks such as a company car. Net wage is another term that refers to the annual wage minus any deductions, such as payroll taxes.

Using annual wage in a sentence

“The annual wage they offer isn’t the highest for this position, but the benefits package more than makes up for it.”

 

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