Pay Basics

This section covers the payroll terms most readers need first: what an employee earns, how payroll structures that pay, and how those earnings differ from the final amount received.

Start here if you are trying to sort out the difference between base pay, regular pay, gross pay, wages, salary, hourly rates, and the paycheck totals that appear later in the payroll workflow.

Core pages in this section:

• Gross Pay explains the full pre-deduction earnings total for the period.
• Net Pay explains the final amount the employee actually receives.
• Base Pay explains the underlying compensation setup before extras are added.
• Regular Pay explains the ordinary earnings line for standard hours or salary.
• Salary explains fixed compensation across payroll periods.
• Wages explains the broader payroll language used for compensation and reporting.
• Hourly Rate explains the per-hour rate used to build earnings for hourly employees.
• Holiday Pay explains payroll compensation linked to recognized holidays.
• Vacation Pay explains vacation-related pay processed through payroll.
• Sick Pay explains payroll compensation tied to illness-related absence.
• Retro Pay explains catch-up pay that corrects earlier underpaid earnings.
• Bonus Pay explains extra compensation added beyond ordinary earnings.
• Sign-On Bonus explains hiring-related extra compensation processed through payroll.
• Retention Bonus explains extra compensation tied to keeping an employee through a defined period.
• Discretionary Bonus explains one payroll bonus classification used to distinguish bonus treatment.
• Non-Discretionary Bonus explains the nearby contrasting payroll bonus classification.
• Commission explains variable pay tied to sales or other measured results.
• Draw Against Commission explains the commission-linked draw arrangement payroll may need to track separately.
• Shift Differential explains extra pay for designated shifts.
• Premium Pay explains the broader payroll category of higher-than-ordinary qualifying pay.
• Hazard Pay explains special extra pay tied to qualifying higher-risk work conditions.
• Training Pay explains payroll compensation tied to approved training time.
• Piece-Rate Pay explains output-based compensation built from units instead of only hours.
• Day Rate explains daily compensation built from a fixed amount per day.
• Vacation Payout explains when payroll turns vacation-related value into a payout amount.
• Severance Pay explains separation-related compensation that needs to stay distinct from ordinary wages.
• Salary Proration explains how payroll adjusts salary for a shorter-than-normal period.

Adjacent topics:

• Overtime Pay explains extra earnings beyond ordinary hours or thresholds.
• Double Time explains a stronger premium rate for qualifying hours.
• Pay Period explains the time window payroll is paying for.

In this section

• Base Pay
  What base pay means in payroll, where it sits in the compensation setup, and how it differs from regular pay and gross pay.
• Bonus Pay
  What bonus pay means in payroll, how it appears on payroll records, and how it differs from regular earnings and retro pay.
• Commission
  What commission means in payroll, how it appears on payroll records, and how it differs from salary and bonus pay.
• Day Rate
  What a day rate means in payroll, how it differs from hourly pay, and why payroll treats it as a distinct pay method.
• Discretionary Bonus
  What a discretionary bonus means in payroll and why payroll may separate it from other bonus and premium-pay terms.
• Draw Against Commission
  What a draw against commission means in payroll and how it differs from ordinary commission-only pay.
• Gross Pay
  What gross pay means in payroll, where it appears in the workflow, and how it differs from taxable wages and net pay.
• Hazard Pay
  What hazard pay means in payroll, when it appears, and how it differs from ordinary regular pay.
• Holiday Pay
  What holiday pay means in payroll, where it appears on pay records, and how it differs from regular pay and vacation pay.
• Hourly Rate
  What an hourly rate means in payroll, how it drives pay calculations, and how it differs from total wages or gross pay.
• Net Pay
  What net pay means in payroll, how payroll reaches it, and why it differs from gross pay and taxable wages.
• Non-Discretionary Bonus
  What a non-discretionary bonus means in payroll and why payroll keeps it distinct from other bonus classifications.
• Piece-Rate Pay
  What piece-rate pay means in payroll, how it differs from hourly pay, and why it needs clear payroll handling.
• Regular Pay
  What regular pay means in payroll, how it is calculated for ordinary hours, and how it differs from base pay and gross pay.
• Retention Bonus
  What a retention bonus means in payroll, when it appears, and how it differs from ordinary ongoing pay.
• Retro Pay
  What retro pay means in payroll, why it happens, and how it differs from ordinary current-period earnings.
• Salary
  What salary means in payroll, how it is converted into per-period pay, and why salary does not automatically mean the same thing as exempt status.
• Salary Proration
  What salary proration means in payroll, when it happens, and how it relates to partial pay periods.
• Severance Pay
  What severance pay means in payroll, when it appears, and how it differs from ordinary ongoing compensation.
• Shift Differential
  What a shift differential means in payroll, how it affects earnings, and how it differs from overtime and bonus pay.
• Sick Pay
  What sick pay means in payroll, how it appears in the payroll process, and how it differs from ordinary regular pay.
• Sign-On Bonus
  What a sign-on bonus means in payroll, when it appears, and how it differs from ordinary regular pay.
• Training Pay
  What training pay means in payroll, when it appears, and why payroll may track it separately from ordinary work pay.
• Vacation Pay
  What vacation pay means in payroll, how it appears on payroll records, and how it differs from PTO and accrued vacation.
• Vacation Payout
  What a vacation payout means in payroll, when it appears, and how it differs from ordinary vacation pay.
• Wages
  What wages mean in payroll, where the term appears, and how it differs from salary, gross pay, and taxable wages.