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Updated on January 31, 2023
Wages are total compensation paid for services, whether in the form of hourly wages, salaries, commissions, or bonuses, including the cash value of remuneration paid in a form other than cash.
Wages are always time-based, and are most commonly talked about as either a per-hour pay rate, or as an annual salary. Employees paid hourly usually clock in and out when starting and ending their shifts, and the total amount of their wages correlate directly with the total amount of hours worked. This means their paycheck maybe for a different amount each payday.
If they work more than 40 hours in a workweek, they’re entitled to overtime pay at a higher rate. This is very different from salaried employees, who are generally exempt from overtime, but who also do not have to track hours worked. Their wages are generally more consistent from paycheck to paycheck.
Examples of different wages include minimum wage, which might be one of the recognized wages in the world. Other examples include living wage, tipped wage, and fair wage.
“I worked summers at my grandma’s fruit stand when I was a teenager, but she always paid me under the table so I wouldn’t have to pay taxes on those wages.”
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