Salary-related key terms explained.
A
- Annual Income: The total amount of money earned by an individual in a year, including salary, bonuses, and other forms of compensation.
- Allowance: Additional funds are provided to employees on top of their salary, often for specific purposes such as transportation, housing, or meal expenses.
- Absences Deduction: Reduction in salary or wages for days an employee is absent from work without valid reasons or approval.
- Across-the-Board Increase: A salary adjustment where every employee receives the same percentage increase in their wages, regardless of their position or performance.
- Attendance Bonus: Extra payment or incentive provided to employees for maintaining good attendance records, usually given on a monthly or yearly basis.
B
- Basic Salary: The fixed amount of compensation paid to an employee before any additional benefits, bonuses, or allowances are added.
- Bonus: Additional payment given to employees on top of their regular salary, usually as a reward for good performance, meeting targets, or during special occasions like holidays.
- Back Pay: Payment owed to an employee for work performed in the past but not yet compensated for, often resulting from retroactive salary adjustments or delayed payments.
- Bank Account Transfer: The method used by employers to deposit employees’ salaries directly into their bank accounts, providing convenience and security for both parties.
- Benefits Package: The collection of non-wage compensations provided to employees, which may include health insurance, retirement plans, paid time off, and other perks offered by the employer.
C
- Cost of Living Allowance (COLA): Additional compensation is provided to employees to help offset the increased expenses associated with living in a particular area, typically due to inflation or higher living costs.
- Compensation Package: The total sum of all financial and non-financial benefits provided to an employee in exchange for their work, including salary, bonuses, allowances, and other perks.
- Commissions: Extra payments awarded to employees based on the sales or revenue they generate, typically calculated as a percentage of the total sales amount.
- Career Development: Programs and opportunities provided by employers to help employees enhance their skills, knowledge, and career advancement prospects, often including training, mentorship, and educational assistance.
- Contractual Employees: Workers hired under a specific contract or agreement for a predetermined period, with terms and conditions outlined regarding their employment status, salary, benefits, and job responsibilities.
D
- Deductions: Amounts subtracted from an employee’s salary, such as taxes, social security contributions, health insurance premiums, and other mandated or voluntary deductions.
- Daily Rate: The amount of money earned by an employee for each day worked, often used for calculating wages for part-time or temporary workers.
- Direct Deposit: A method of electronically transferring an employee’s salary directly into their bank account, eliminating the need for physical paychecks and providing greater convenience and security.
- Dependent’s Allowance: Additional financial assistance provided to employees with dependents, such as spouses, children, or parents, to help cover their living expenses.
- Discretionary Bonus: Extra payment given to employees at the employer’s discretion, often as a reward for exceptional performance, loyalty, or contributions to the company’s success.
E
- Employer Contributions: Payments made by the employer on behalf of the employee, such as contributions to retirement plans (e.g., pension, provident fund), health insurance premiums, or other employee benefits.
- Employee Handbook: A document provided by the employer outlining policies, procedures, and guidelines related to employment, including information about salary, benefits, workplace conduct, and company expectations.
- Earnings Statement: A document provided to employees detailing their total earnings, deductions, and net pay for a specific pay period, typically issued alongside each salary payment.
- Exempt Employee: An employee who is exempt from certain provisions of labor laws, such as overtime pay requirements, typically due to their managerial, administrative, or professional duties.
- Early Retirement Package: An incentive offered by employers to encourage employees to retire earlier than the standard retirement age, often including financial benefits such as pension enhancements, lump-sum payments, or extended healthcare coverage.
F
- Flexitime: A system that allows employees to vary their work hours within certain limits, providing flexibility in scheduling while ensuring that core hours are covered.
- Fringe Benefits: Additional non-monetary compensations provided to employees alongside their regular salary, such as health insurance, retirement plans, company car, or gym memberships.
- Final Pay: The last salary payment issued to an employee upon termination of employment, which may include accrued wages, unused vacation time, and other applicable benefits.
- Family Leave: Paid or unpaid time off granted to employees to attend to family-related matters, such as the birth or adoption of a child, caring for a sick family member, or bereavement.
- Fixed-Term Contract: An employment agreement with a predetermined end date, specifying the duration of employment and the terms and conditions governing the relationship between the employer and the employee.
G
- Gratuity: Also known as a tip or bonus, it’s an additional payment given voluntarily or as thanks for services rendered, often in the context of hospitality or customer service industries.
- Gross Salary: The total amount of money earned by an employee before any deductions, taxes, or other withholdings are taken out.
- Government Mandated Benefits: Benefits required by law to be provided by employers to their employees, such as social security contributions, health insurance, and retirement plans.
- Group Insurance: Insurance coverage provided by an employer to a group of employees, often at a lower cost than individual plans, covering various risks such as health, life, disability, or dental care.
- Guaranteed Minimum Wage: The lowest hourly, daily, or monthly wage that employers are legally required to pay their employees, as mandated by government regulations or labor laws.
H
- Hourly Rate: The amount of money paid to an employee for each hour of work performed, commonly used for part-time, temporary, or hourly-wage workers.
- Health Insurance: A type of insurance coverage provided by employers to help employees cover medical expenses, including doctor visits, hospital stays, prescriptions, and other healthcare services.
- Holiday Pay: Additional compensation provided to employees for working on designated public holidays, typically paid at a higher rate than regular wages.
- Hazard Pay: Extra compensation is provided to employees who work in dangerous or high-risk environments, as a recognition of the increased risks they face while performing their duties.
- Housing Allowance: Financial assistance provided by employers to help employees cover the cost of housing expenses, such as rent or mortgage payments, especially in areas with high living costs.
I
- Income Tax: A tax levied by the government on an individual’s income, including wages, salaries, bonuses, and other forms of earnings.
- Increment: A regular and periodic increase in salary or wages, often based on factors such as performance, tenure, or cost of living adjustments.
- Incentive Pay: Additional compensation provided to employees as a reward for achieving specific goals, exceeding performance targets, or contributing to the success of the organization.
- Insurance Coverage: Protection provided to employees against various risks, such as health, life, disability, or property damage, typically offered as part of an employer’s benefits package.
- Insurance Premium: The amount of money paid by an individual or employer to an insurance company in exchange for coverage, typically paid regularly (e.g., monthly or annually).
J
- Job Evaluation: The systematic process of assessing and determining the relative worth of different jobs within an organization, often used to establish fair and equitable salary structures.
- Job Grade: A classification system used to categorize jobs within an organization based on factors such as skills, responsibilities, and required qualifications, often used for salary benchmarking and comparison.
- Job Rotation: The practice of periodically moving employees between different roles or departments within an organization, aimed at providing them with broader experiences and skill development opportunities.
- Job Satisfaction: The level of contentment and fulfillment an employee experiences in their job, influenced by factors such as workload, work environment, compensation, and opportunities for growth and advancement.
- Junior Employees: Entry-level or less experienced workers within an organization, typically occupying lower-ranking positions and receiving lower salaries compared to their more senior counterparts.
K
- Kaizen: A Japanese term meaning “continuous improvement,” often applied in the context of workplace practices and processes to encourage incremental and ongoing enhancements in efficiency, quality, and productivity.
- Key Performance Indicators (KPIs): Specific metrics used to evaluate the performance and effectiveness of individuals, teams, or departments within an organization, often tied to organizational goals and objectives.
- Knowledge Transfer: The process of sharing and disseminating information, skills, and expertise from experienced employees to newer or less experienced ones, ensuring continuity of knowledge within the organization.
- Kickback: A form of bribery or unethical payment made to someone in return for a favor or favorable treatment, often in business or government contexts.
- Knowledge Management: The process of capturing, organizing, storing, and sharing knowledge and information within an organization to facilitate learning, decision-making, and innovation.
L
- Lump Sum Payment: A one-time payment made to an employee, often as a bonus, severance package, or instead of salary increases over some time.
- Leave Credits: Accumulated time off that employees can use for vacation, sick leave, or other personal reasons, typically accrued based on the length of employment and company policies.
- Labor Code: The set of laws and regulations governing labor and employment practices in the Philippines, covering various aspects such as wages, working conditions, employee benefits, and labor relations.
- Labor Union: An organization formed by workers to collectively represent their interests and negotiate with employers on issues such as wages, benefits, working conditions, and other terms of employment.
- Living Wage: The minimum income necessary for a worker to meet their basic needs, including food, housing, healthcare, and transportation, typically calculated based on local cost-of-living expenses.
M
- Minimum Wage: The lowest hourly, daily, or monthly wage that employers are legally required to pay their employees, as mandated by government regulations or labor laws.
- Merit Pay: Additional compensation awarded to employees based on their performance, contributions, or achievements, often used as an incentive to motivate higher levels of productivity and excellence.
- Maternity Leave: Paid time off granted to female employees for childbirth, typically provided before and after the delivery of a child to allow for recovery and bonding time with the newborn.
- Meal Allowance: Financial assistance is provided to employees to cover the cost of meals consumed during working hours, especially in situations where they are required to work overtime or travel for business purposes.
- Mandatory Deductions: Amounts subtracted from an employee’s salary or wages as required by law, such as taxes, social security contributions, and other statutory deductions mandated by government regulations.
N
- Net Salary: The amount of money an employee receives after all deductions, such as taxes, contributions, and other withholdings, have been subtracted from their gross salary.
- Non-Taxable Allowances: Allowances or benefits provided to employees that are not subject to income tax, such as meal allowances, transportation subsidies, or reimbursements for work-related expenses.
- Night Differential: Additional compensation paid to employees for working during nighttime hours, typically calculated as a percentage increase of their regular hourly wage.
- Nondisclosure Agreement (NDA): A legal contract between an employer and employee that restricts the employee from disclosing confidential or proprietary information about the company, its clients, or its operations.
- Negotiated Salary: The salary amount agreed upon between an employer and employee through negotiations, taking into account factors such as experience, qualifications, job responsibilities, and market conditions.
O
- Overtime Pay: Additional compensation is provided to employees for hours worked beyond their regular work schedule, typically paid at a higher rate than their standard hourly wage.
- Occupational Safety and Health Standards (OSHS): Regulations established by the government to ensure the safety, health, and welfare of workers in the workplace, covering aspects such as workplace conditions, equipment safety, and employee training.
- Onboarding: The process of integrating new employees into an organization, and providing them with the necessary training, information, and resources to become productive members of the team.
- Outsourcing: The practice of contracting tasks, functions, or services to external third-party vendors or service providers, often done to reduce costs, improve efficiency, or access specialized expertise.
- Overhead Costs: The indirect expenses incurred by a business in its operations, such as rent, utilities, administrative salaries, and other expenses not directly tied to production or service delivery.
P
- Payroll: The process of calculating and distributing employee salaries and wages, including deductions, taxes, and other withholdings, typically done regularly (e.g., weekly, bi-weekly, or monthly).
- Performance Appraisal: The process of evaluating an employee’s job performance, typically conducted by their supervisor or manager, to provide feedback, identify strengths and weaknesses, and set goals for improvement.
- Probationary Period: A trial period during which a new employee’s performance and suitability for a job are evaluated, typically before they are offered permanent employment status.
- Profit Sharing: A compensation arrangement where employees receive a share of the company’s profits, typically distributed based on factors such as individual performance, tenure, or a predetermined formula.
- Paid Time Off (PTO): Time off from work that employees are entitled to receive with pay, typically including vacation days, sick leave, and holidays.
Q
- Qualification Differential: Additional compensation is provided to employees who possess specific qualifications or certifications relevant to their job role, such as language proficiency, technical skills, or professional licenses.
- Quality of Work Life (QWL): The overall satisfaction and well-being experienced by employees in their work environment, influenced by factors such as workload, work-life balance, job security, and opportunities for growth and development.
- Quarterly Bonus: Additional payment given to employees every quarter, often based on the company’s financial performance during that period or individual performance targets achieved.
- Quota: A predetermined target or goal set for employees to achieve within a specified timeframe, often used in sales or production environments to measure performance and productivity.
- Quick Loans: Short-term loans provided to employees by employers or financial institutions for emergency expenses or unexpected financial needs, typically with a quick approval process and repayment terms.
R
- Remote Work Allowance: Additional compensation is provided to employees who work remotely or telecommute, typically intended to cover expenses such as internet bills, home office equipment, and utilities.
- Retirement Benefits: Financial benefits provided to employees upon retirement from their job, which may include pension plans, retirement savings accounts, or other forms of post-employment income.
- Regular Rate of Pay: The standard hourly rate used to calculate overtime pay for non-exempt employees, often including base salary or wages plus certain additional compensation such as bonuses or commissions.
- Recruitment: The process of attracting, sourcing, evaluating, and selecting qualified candidates to fill job vacancies within an organization, aimed at building a skilled and diverse workforce.
- Resignation: The voluntary act of an employee ending their employment with an organization, typically by providing notice to their employer and following established procedures for departure.
S
- Sick Leave: Paid time off granted to employees who are unable to work due to illness, injury, or medical appointments, allowing them to recover without loss of income.
- Severance Pay: Compensation is provided to employees upon termination of their employment, typically based on factors such as length of service, salary level, and company policies.
- Salary Grade: A classification system used to categorize and differentiate positions within an organization based on factors such as job responsibilities, qualifications, and level of authority, often tied to specific salary ranges.
- Shift Differentials: Additional compensation is provided to employees for working shifts outside of normal business hours, such as evenings, nights, weekends, or holidays.
- Stock Options: A form of compensation that gives employees the right to purchase company stock at a predetermined price within a specified period, often used as an incentive to align their interests with those of the company and encourage long-term commitment.
T
- Telecommuting Allowance: Additional compensation provided to employees who work remotely or telecommute, intended to cover expenses such as internet bills, home office equipment, and utilities.
- Time and Attendance System: A software or hardware-based system used by employers to track and manage employee work hours, attendance, and related data for payroll and scheduling purposes.
- Training and Development: Programs and activities provided by employers to enhance the skills, knowledge, and competencies of their employees, aimed at improving job performance, productivity, and career advancement opportunities.
- Travel Allowance: Financial assistance provided to employees to cover expenses incurred while traveling for business purposes, such as transportation, accommodation, meals, and other related costs.
- Tenure: The length of time an employee has been continuously employed by a company or organization, often considered when determining benefits, promotions, or other employment-related matters.
U
- Unemployment Benefits: Financial assistance provided to individuals who are unemployed and actively seeking employment, typically funded by government programs and designed to help cover living expenses during periods of job loss.
- Union Dues: Regular payments made by members of a labor union to support the activities and operations of the union, including collective bargaining, representation, and advocacy on behalf of workers’ rights and interests.
- Underemployment: A situation where individuals are employed in jobs that do not fully utilize their skills, qualifications, or experience, often resulting in lower wages, reduced hours, or limited opportunities for career advancement.
- Upward Mobility: The ability of employees to advance within an organization, moving into positions of greater responsibility, authority, and compensation over time through promotions, skill development, and career progression opportunities.
- Underpayment: Paying employees less than the legally mandated minimum wage or failing to provide compensation that is commensurate with the value of the work performed, may result in legal consequences for employers.
V
- Vacation Leave: Paid time off granted to employees for leisure, relaxation, and personal activities, allowing them to take a break from work and recharge.
- Variable Pay: Compensation that fluctuates based on performance, productivity, or other predetermined criteria, such as bonuses, incentives, or commissions.
- Voluntary Deductions: Amounts subtracted from an employee’s salary at their request, such as contributions to retirement plans, health insurance premiums, or charitable donations.
- Vision Insurance: A type of insurance coverage provided by employers to help employees cover the cost of vision-related expenses, such as eye exams, glasses, contact lenses, and vision correction surgery.
- Vesting: The process by which employees become entitled to receive employer-contributed benefits or retirement funds over time, typically based on a specified period of service or meeting certain criteria.
W
- Wage Garnishment: A legal process in which a portion of an employee’s wages is withheld by their employer to satisfy a debt or obligation, such as child support payments, taxes, or court-ordered judgments.
- Work-Life Balance: The equilibrium between an employee’s professional responsibilities and personal life, characterized by manageable workloads, flexible schedules, and opportunities for relaxation and leisure activities.
- Workplace Safety: Measures and protocols implemented by employers to ensure the physical and psychological well-being of employees, including practices to prevent accidents, injuries, and occupational hazards.
- Wage Theft: The illegal practice of employers failing to pay employees the wages or benefits they are legally entitled to, such as minimum wage violations, unpaid overtime, or withholding tips.
- Workforce Diversity: The presence of individuals from various backgrounds, demographics, and cultures within an organization, fostering a more inclusive and equitable workplace environment.
X
- X-factor: A term used colloquially to describe an intangible quality or characteristic that sets someone apart or makes them exceptional in their role, often used in performance evaluations or talent assessments.
- X-time Pay: A term used to denote extra compensation given to employees for working during specific hours or shifts, such as on weekends, holidays, or overnight shifts.
Y
- Year-End Bonus: Additional compensation is provided to employees at the end of the calendar year, often based on the company’s financial performance or individual performance evaluations.
Z
- Zero-Hour Contract: An employment agreement where the employer is not obligated to provide a minimum number of work hours and the employee is not required to accept any offered work, resulting in a flexible arrangement for both parties.
- Zip Code Salary: A term used to describe variations in salary levels based on geographic location, with wages adjusted to reflect differences in the cost of living, market demand, and other regional factors.
- Zone Pay: Additional compensation provided to employees working in specific geographical zones or areas that are deemed to be more challenging, remote, or hazardous, often intended to incentivize employees to accept assignments in these locations.