A Wage, A Salary and A Commission

Last Updated on March 19, 2022 by QCity Editorial Stuff

A wage is a fixed sum of money paid by an employer to employees, usually for work done. A salary is a set amount of income that one receives regularly from their job. A commission is compensation based on the sale or service of goods or services achieved. It’s important to understand the difference between these terms and how they apply in your career planning and development. 

One common misconception about wages and salaries is that they are identical–they’re both types of compensation, right? Wrong! Wages can be lower than salaries because some employers offer higher gross wages but don’t provide benefits like health insurance and retirement plans (or simply don’t pay them at all). Salaries often include such things as bonuses.

Wages are paid for hours worked or completed tasks with no relation to skill level. Salaries can be based on either hourly pay rates or completed work, but typically employees with salaries receive regular increases over time in addition to their base rate. Commissions are payments that depend on sales volume and production goals set by the company. It’s important to know which type of payment system best suits your needs when starting a new job.

Comparison between a Wage, a Salary and a Commission

Parameters of ComparisonWage,  SalaryCommission  
PopularGeneral public like itBusinessman like it
AmountSmall amountBig amount
Life-changingIt is not life-changingLife-changing
EarnEasy to earnHard to earn

What are wages and salary?

A wage is a form of compensation paid to an employee by an employer. It can be calculated hourly, daily, weekly, monthly, or annually. A salary is a fixed amount of money that gets paid over a set period instead of per hour or day. The difference between the two is simple: wages are based on hours worked and salaries are based on days worked. 

wage and salary are the two main types of employee compensation. Wage is an hourly pay rate, whereas salary is a fixed amount paid to an employee each pay period. Wage and salary are both forms of payment, but they are different in terms of when they are paid and how often. Wages are usually paid on an hourly basis, while salaries are typically paid on a monthly or semimonthly basis. In most cases, employees who receive wages also receive benefits such as vacation time and sick leave, while employees who receive salaries do not usually receive these benefits.

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What is Commission?

The commission is a word that is often used in business and sales settings. But what does it mean? In this blog post, we will explore the definition of commission, as well as discuss some of the common features and applications of commission-based pay structures. By the end of this post, you should have a better understanding of what commission is and how it can be used to incentivize employees or reward customers.

The commission is the rate at which a salesperson gets paid. Commissions can be set as either a percentage of gross profit or as a flat dollar amount for each item sold and often vary based on the type of product being sold. Sales commissions are not only important to salespeople, but also to companies who use them as an incentive to encourage their employees to sell more products and increase revenue.

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10 Differences Between a Wage, a Salary and a Commission

1. A wage is a fixed amount of money that an employee earns for the work they do.

2. A salary is a set amount of money that an employee receives each year, regardless of whether they worked or not.

3. A commission is a payment made to someone who has sold something on behalf of another company.

4. The difference between wages and salaries is that wages are paid by the hour while salaries are paid per day, week or month.

5. The difference between commissions and wages/salaries is that commissions are only paid when the sale has gone through while both can be used as incentives to increase productivity.

6. Wages and salaries have different tax implications so it’s important to know which one you’re getting before signing any contracts with your employer.

7. A wage is a fixed amount of money paid for work done.

8. Salary means you are paid an agreed-upon amount of money each month, regardless of how much time you spend working or the number of hours you work.

9. Commission is when your pay depends on what you sell or do.

10. Income from a commission can fluctuate depending on how well the business is going.

Interesting Statistics or Facts of a Wage and a Salary

1. There is a difference between a wage and a salary.

2. The average American earns $51,000 per year in wages.

3. The average American earns $68,000 per year in salaries.

4. A salary can be higher than the national average due to bonuses or other benefits.

5. In 2013, the top 10% of earners made more than six times as much as the bottom 10% of earners.

6. In 2013, the median household income was about $50,000 after taxes.

Interesting Statistics or Facts of Commission

1. Commission salespeople are the most likely type of salesperson to be successful.

2. The average commission is 10%.

3. The top 5% of all salespeople make 50% more than the bottom 25%.

4. Sales commissions are not taxed as income, but rather as a percentage of your total earnings.

5. There is no set minimum or maximum amount for an individual’s commission rate  – it can vary based on the company policy and negotiations with management.

6. A commission-based pay structure has been shown to increase productivity by up to 20%, due in part to increased motivation from higher compensation levels and performance bonuses.


The terms wage, salary, and commission are often used interchangeably. But what do they mean? What is the difference between them? Let’s take a look at each of these three types of income to find out how they differ from one another so you can decide which might be best for your situation. There are many differences between earning an hourly wage, being paid by the hour, or receiving a salary with benefits. We will explore these three different forms of compensation in detail below to help you determine which may work best for your unique needs as well as those of your family. You’ll also learn about some other options that could increase the amount that’s available every month after taxes have been deducted – both legally and illegally.


Resource 01: https://www.salary.com/
Resource 02: https://www.accountingverse.com/dictionary/c/commission-income.html#:~:text

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