Pay Basics

This section covers the first compensation terms most readers need: how payroll stores pay, how ordinary earnings are built, and how those earnings differ from the final paycheck.

Use it when the main question is “What is this kind of pay?” rather than “How was tax or deduction treatment applied?”

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• 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.

Common Extra Earnings Types

• Bonus Pay explains extra compensation added beyond ordinary earnings.
• Commission explains variable pay tied to sales or other measured results.
• 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.
• Training Pay explains approved training time paid through payroll.
• Retro Pay explains catch-up pay that corrects earlier underpaid earnings.
• Shift Differential explains extra pay for designated shifts.
• Hazard Pay explains special extra pay tied to qualifying higher-risk work conditions.

Special Cases and Adjustments

• 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.
• Draw Against Commission explains the commission-linked draw arrangement payroll may need to track separately.
• 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
  Core compensation rate or salary setup payroll uses as the starting point before overtime, bonuses, or other extras are added.
• Bonus Pay
  Additional compensation paid on top of ordinary earnings and usually shown as a separate payroll line or run item.
• Commission
  Variable earnings paid from sales or other measured results and brought into payroll as a separate earning line or calculation input.
• Day Rate
  Fixed daily pay amount payroll uses when earnings are built from payable days instead of a standard hourly or salary calculation.
• Discretionary Bonus
  Bonus pay the employer chooses without a fixed promise or formula, which payroll usually records as a separate non-routine earning.
• Draw Against Commission
  Compensation arrangement that advances pay before final commission results are settled, which payroll later offsets or reconciles against earned commission.
• Gross Pay
  Employee pay before deductions, used as the starting point for withholding and net-pay calculations.
• Hazard Pay
  Additional payroll earnings tied to qualifying higher-risk or specially designated work conditions.
• Holiday Pay
  Payroll compensation tied to a recognized holiday, either for paid holiday time or for work performed on the holiday.
• Hourly Rate
  Per-hour compensation amount payroll multiplies by approved hours to build regular pay and some premium earnings.
• Net Pay
  Pay left after withholding and deductions, the amount actually delivered to the employee.
• Non-Discretionary Bonus
  Bonus pay earned under a promise, formula, or measurable target, which payroll usually tracks separately from discretionary bonuses and regular pay.
• Piece-Rate Pay
  Output-based pay built from completed units or pieces, which payroll records separately from ordinary hourly or salary earnings.
• Regular Pay
  Ordinary earnings for standard hours or salary in the current pay period before overtime and special extras are added.
• Retention Bonus
  Extra pay used to keep an employee through a specified date, milestone, or transition and usually shown as a separate payroll earning.
• Retro Pay
  What retro pay means in payroll, why it happens, and how it differs from ordinary current-period earnings.
• Salary
  Fixed compensation arrangement payroll converts into a per-period earnings amount for each scheduled run.
• 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
  Extra payroll earnings for designated shifts, usually added as a premium amount or adjusted rate on qualifying hours.
• 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
  Hiring-related bonus paid near the start of employment and typically tracked in payroll as a separate non-routine earning.
• Training Pay
  Payroll compensation for approved training time, often tracked separately from ordinary production or scheduled work time.
• 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
  Broad payroll term for compensation, with meaning that changes depending on whether the context is earnings, taxes, or reporting.