Payroll questions: Salary v. Wages
Wednesday, May 23rd, 2007
One major difference is that hourly employees are entitled to overtime pay of at least 1.5 x their hourly rate for each hour worked over 40 hours in the workweek–but only some salaried employees are entitled to overtime pay.
The term “salary” generally refers to a fixed or guaranteed amount per week or other payroll period, such as biweekly, semimonthly or monthly. Contrary to popular belief, being paid a salary does not automatically exempt a worker from overtime pay. Exemption depends on whether the employee’s work meets one of the exempt categories under federal/state wage-hour law.
Another good tip from The American Institute of Professional Bookkeepers