Basic Salary

What is base pay in salary?

Base pay in salary, also known as basic salary, is an initial rate of compensation that employees receive in charge of their work or service.

This type of salary does not include any additional compensation, including overtime pay, or bonuses and other types of benefits like sales commissions, vacation time or the use of company property. However, each of the elements could be included in the overall compensation package to make it more competitive.

Note: When setting the basic salaries for employees, referring to the labour law with the effect from May 1 2019, the SMW rate is now raised up to HK$37.5 per hour at the moment.

How to calculate and pay the basic salary?

Salaried workers always receive the same fractional amount of their basic salary each pay day. To determine this, we should use their annual basic salary divided by the number of pay periods in the company per year.

Here are some of the most commonly used salary types by employers, click here for more information!

What is the difference between basic salary, total earning, and net pay?

Each of these terms tells a different story of an employee’s compensation. Unlike basic salary, the other takes into account additions and deductions to employee’s earnings.

Total earning: refers to the basic salary plus a series of additional income, including bonuses and commissions.

Net pay: means the amount of money employees finally received after their total earnings have been totaled while all taxes and other deductions are subtracted.


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How to pay the basic salary and variable pay separately?

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