What is the difference between pay and salary?
Pay is the umbrella term for all earned compensation — it includes hourly wages, an annual salary, bonuses, commissions, and overtime. Salary is one specific form of pay: a fixed annual amount, paid in equal instalments (usually weekly, bi-weekly, or monthly), typically regardless of hours worked. All salaries are pay; not all pay is a salary.
Pay and salary explained
In US labour law, "pay" is the broadest term and covers every form of compensation an employer transfers to a worker in exchange for labour. The Fair Labor Standards Act (FLSA) defines two main payment structures: hourly wages (paid for each hour worked) and salary (a fixed amount paid on a regular schedule). The structure determines a worker's overtime eligibility, minimum-wage protections, and recordkeeping requirements.
A salaried worker who earns $78,000 per year gets paid $3,000 every other Friday regardless of whether they worked 35 hours or 55 hours that week. An hourly worker earning $30/hr gets paid for every hour they clock in — including 1.5x for any hour over 40 per week if they are classified as non-exempt under the FLSA. Both are forms of pay; only the first is a salary.
Examples: hourly pay vs salaried roles
Hourly: warehouse associate
$22/hr × 40 hrs × 52 weeks = $45,760 base. Plus 1.5x ($33/hr) for every hour over 40. If the associate works 45 hours one week, that week pays $880 + $165 = $1,045. Pay scales linearly with hours.
Salaried: software engineer
$132,000 annual salary. Paid $5,500 every other Friday. Working 35 hrs one week and 55 hrs the next changes nothing — the pay is fixed. The engineer is "exempt" under the FLSA, so no overtime.
Salaried + commission: account executive
$80,000 base salary plus 8% commission on deals closed. The base is salary; the commission is variable pay. Total pay (also called "on-target earnings" or OTE) might run $160,000 in a strong quarter and $90,000 in a weak one.
Related terms
- Salary calculator — definitional reference and links to every Workzil calculator variant.
- Gross pay vs net pay — the difference between what you earn and what lands in your bank account.
- Take-home pay — the after-tax dollar amount that actually reaches your account.
- Exempt vs non-exempt — the FLSA classification that determines overtime eligibility.
- On-target earnings (OTE) — the expected total comp for a role with variable pay.
How Workzil helps
The Workzil salary calculator shows you both gross pay and estimated take-home for any role-and-state combination. When you create a free Workzil account, every job we surface from our 50+ partner boards is annotated with how its salary maps to your target — so you can filter out under-paying roles before applying.
Frequently Asked Questions
Sources: US Department of Labor, Fair Labor Standards Act · BLS OEWS. Last updated May 18, 2026.