Definition Wages and Salaries
After carrying out the obligation to complete a job, someone will definitely get a wages or salary. The terms wages and salaries are often interpreted by some to refer to the same thing. However, there are also those who interpret that wages and salaries are two different things. Actually, what is the difference wages and salaries? What are the aspects that distinguish these two terms? Read more in this article.
Based on the Big Indonesian Dictionary salary is wages paid for work within a fixed period of time; remuneration received by workers in the form of money based on a certain time. While wages are money and so on that are paid as remuneration or a form of payment for labor that has been expended to do a job.
In the Law of the Republic of Indonesia Number 13 of 2003 concerning Manpower, it is only stated that the term wages as the rights of workers received in the form of money as compensation from an employer who is determined and paid according to a work agreement, agreement or statutory regulation, including allowances for workers/ laborers and their families for a job or service that has been performed. However, the company uses the term salary as a reward for the staff.
Difference Wage and Salary
There are several factors that differentiate between wages and salaries, including:
1) Time Difference
Salary is paid on a regular basis based on the agreement in the employment agreement. For example, a monthly salary paid at the end or beginning of each month. Meanwhile, wages are paid in irregular periods to workers after the work is completed.
So wages will be paid according to the work done. Meanwhile, salaries will be paid regularly according to the specified period.
2) Employment Status
Salary is given to staff who are permanent employees or contract employees for a certain period of time. This is different from the wages which are usually given to daily workers, casual workers, daily workers or seasonal workers.
3) Compounding Components
In salary, there are a number of constituent components such as basic salary, fixed allowance to variable allowance. In an employment agreement between the company and the staff, the term salary refers to the entirety of both the basic salary and any compensation provided by the company. While wages refers to a single component that does not include benefits.
The complexity of managing staff salaries is often a problem experienced by company staff, especially if the company has thousands of staff. Not to mention, salary management must be carried out regularly every month. In addition to salaries and allowances, it is also important to remember that one of the components that make up the salary that must also be considered is the calculation of employee taxes.
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