The HR Dictionary

Basic Salary

Basic salary is the initial salary paid to an employee, not including any benefits, bonuses, or raises. If an organization pays a commission, it's typical to express the offered compensation as on-target earnings (OTE) especially when it comes to sales roles. However, organizations can also offer a basic wage solely.

The basic wage is specified when it comes to the actual monthly or weekly payment as summarized on a payslip. Taxes and other expenses such as national insurance will be deducted from the basic wage when the salaries are paid.

Base vs Gross Pay 

Basic salary is the amount decided between a corporation and its employee, excluding any bonuses, overtime pay, or any additional remuneration. Contrarily, an employee’s gross salary takes taxes and other deductions into account but does not include overtime pay or bonuses. The overall compensation made by an employer to an employee is referred to as gross pay. In addition to an employee's base pay or hourly rate, it often includes extras like incentives and benefits. An existing or prospective employee can have a complete idea of their entire remuneration by calculating the gross salary that an employer includes with a job offer.

Organizations of all sizes usually use some form of HR information systems or HR software, free or paid tools, to manage employee salary information in a secure and centralized manner instead of maintaining paper files and document cabinets.