<i>Dear Workforce</i> Salaries vs. Compensation

January 7, 2001

Whatis the difference between "salary" and "compensation?" 

--Signed, dictionary isn’t helping 

A Dear Dictionary: 

Compensationis the process of directly and indirectly rewarding employees, on a current ordeferred basis, for their performance of assigned tasks. 

Salaryis the direct compensation paid on a regular time interval without aconsideration of any specific units of output; sometimes used to distinguishemployees (salaried) who are not covered by a collective bargaining agreement orin some cases, are exempt from the Fair Labor Standards Act. 

SOURCE:2000 U.S. Master Human Resources Guide, by Donald W. Myers, copyright CCH.


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