• Employment
  • December 22, 2021

Wages vs Salary - What's The Difference

Knowing the difference between wages and salary is important for determining what's best for your business as an employer. Here are the differences between the two, as well as the advantages and disadvantages of each option.

Difference between wages and salary

The terms salary and wages are often used interchangeably, however, they are actually quite different concepts. 

What is a salary?

A salary is a set amount paid into an employee’s bank account at predetermined intervals, usually fortnightly or monthly. Tax and national insurance are deducted before the employee is paid. 

Advantages of salaried pay

  • Both parties know how much money must be paid/received every month. This allows you and your employees to budget and provides certainty to everyone as you know how much is coming in and going out.
  • A salary is usually paid to employees with higher skills. Often a salaried worker will need to work longer hours to ensure certain tasks/projects are completed and this is reflected in the amount they are paid. 

Disadvantages of salaried pay

  • Overtime is one of the main disadvantages of salaried pay as tracking overtime can be a bit of a challenge. Generally, a salaried employee is required to get their job done no matter how long it takes.
  • During times of financial difficulty, the company might be inclined to cut the salary of their employees. 

What is a wage?

Wages are based on the number of hours or days someone has worked for you and therefore, the amount paid can vary. Like a salary, tax and national insurance contributions are paid before the employee receives their wage.

Advantages of paying wages

  • You only have to pay for the hours worked. If an employee has to leave early one day it is easy to deduct the unworked hours from their pay, something that is more difficult to do in the case of salaried employees.
  • Wages can be paid weekly which suits many businesses directly related to the number of hours that they’ve worked.
  • Overtime is easy to calculate and generally be paid extra for time they work in addition to their 'normal' working hours. 

Disadvantages of paying wages

  • If you need to cut down on expenses due to financial troubles in most cases employee hours are the first to go so they will receive a smaller paycheck.
  • Waged employees usually don't have the same benefits as salaried employees.

Wrapping up

The above is a brief overview of the differences between paying your employees a salary or a wage. If you have any other questions, speak to one of our Employment Law Solicitors who will be happy to help you on this and all other employment and commercial law matters.

Get legal assistance from LawBite

If you have any questions or concerns regarding salaries or wages, do not hesitate to contact our expert employment lawyers who would be happy to assist you. At LawBite, we offer a free 15-minute phone consultation to discuss your legal issues with and expert on legal matters. Book you free consultation today!

Additional useful information


In closing

Nothing in this article constitutes legal advice on which you should rely. The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article. Our Platform Terms of Use apply to this article.

Related Articles

Read more of our latest blog posts, featuring all the latest legal news, analysis and opinion from our expert lawyers.

blog image
  • By LawBite Team
  • May 13, 2022
The benefits of hybrid working

During the height of the Covid-19 pandemic, many office workers had to work solely from home, something which was mostly unheard of before the pand...

blog image
  • By LawBite Team
  • May 12, 2022
What is a Temporary Work Visa?

A Temporary Work Visa, formally known as a Tier 5 Visa allows foreign nationals to live, work, or study in the UK for a short time, between 6 and 2...

blog image
  • By LawBite Team
  • May 12, 2022
What are Right to Work documents?

As a business owner, you have a legal requirement to carry out a Right to Work check (RTW) on all new employees to verify that their immigration st...


LawBite can help you

LawBite is on a mission to provide business legal advice that is easier to access, clearer to understand and much cheaper. Our on-line legal advice platform can quickly connect you with expert business legal advice. Our friendly, highly qualified business lawyers, solicitors and mediators will give you the guidance and reassurance that comes from customised legal advice for small and medium sized business.

Whether you are bringing or defending a legal claim, outsourcing work, want a business contract review to ward off disagreements, talk to an expert trademark lawyer, resolve a contractual dispute with methods like mediation and arbitration, or getting your new company set up and on the right footing with a robust shareholder agreement and GDPR standards, we can help you succeed.

defend a claim

Talk to a Lawyer

Book a Call
defend a claim

Essentials Plan

Join for Free