What is salary-ERS?
Salary simply represents the gross wages prior to tax deduction that your company offers you. It does not depend on whether you work fulltime, part time or hourly basis. Salary doesn’t include other benefits such as health insurance etc.
Salary Pros Cons
If you work for fixed hours and your wages are determined on the basis of work hours produced by you, then you are entitled to get the overtime. In some countries the overtime compensation is 150% of the normal payout rate. If you are working on straight salary, overtime is not included in your payout. For example, managers are not entitled for any overtime as their remuneration and benefits depend upon some other factors rather than the number of hours they work. This comes in the form of performance bonuses and share in overall profits.
When we say overtime, it’s applicable only when the employee completes 40 hours in a week. It’s not based on daily hours you put in. So, if there is an urgent project, you might be asked to work an additional four hours apart from your regular eight hours daily, until the project is completed.
If someone works on hourly basis, the employer may pay him only for the number of hours he has worked. In case, it’s less than eight hours a day, then he would be paid only for that amount of time. So, even if you are willing to work, but your services are not required fulltime, you might be paid just a fraction of amount of what you would be paid working fulltime. This leads to frustration. But, if the business is not there and employees either have to leave the workplace before time or just sit idle, the salaried people would receive the full salary.
What is remuneration?
Remuneration is a wider term as compared to salary. It includes salary, accommodation, stock benefits, commissions, incentives, bonuses, travel allowances etc.
Remuneration Pros Cons
Some jobs are based on just the commission on sale etc. Such employees are entitled to receive the paychecks only when they succeed in making sales. They do not receive a fixed salary. However, high performers receive many additional benefits such as free trips and performance bonuses, which are way beyond the normal managerial salaries.
The top management is also entitled to get other benefits such as stock options, share in profits, severance pay and quarterly bonuses. Sometimes, this remuneration package is far, far higher than the annual salary of the employees, which increases their asset base.
However, in many countries you have to pay taxes on your overall remuneration. The non-cash incentives and benefits extended by your employer are also subject to income tax, such as a company car and Social Security tax in the US.