What is Salary?

A salary is a form of periodic compensation paid by an employer to an employee for their professional services. Unlike hourly wages, which vary based on the number of hours worked in a given pay period, a salary is typically expressed as an annual or monthly figure and paid on a set frequency (such as semi-monthly or bi-weekly). Salaried employees are commonly classified as exempt or non-exempt under the Fair Labor Standards Act (FLSA). Exempt salaried professionals are paid to complete a job rather than work a specific tally of hours, meaning they generally do not qualify for overtime pay if they work more than 40 hours a week. Salaries offer financial stability and predictable cash flow for employees, making personal budgeting easier. Employers offer salaries to secure professional talent for ongoing responsibilities, often pairing salaries with bonus plans, stock options, paid time off, and retirement benefits.