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Basic salary, also known as base pay, is the initial rate of compensation that employees receive for their work or services. This type of salary does not include any additional compensation, such as overtime pay, bonuses, sales commissions, vacation time, or the use of company property. However, these elements could be included in the overall compensation package to make it more competitive. Basic salary is often used as a starting point for negotiations between employers and employees, although it can also be used to determine the amount of other types of compensation. For example, an employee may request a higher basic salary in exchange for foregoing certain benefits such as health insurance or a company car.

Note: When setting basic salaries for employees, it is important to refer to labor laws. As of May 1, 2023, the minimum wage rate in Hong Kong is HK$40 per hour.

How is basic salary calculated and paid?

Salaried workers are paid a fixed amount each paycheck. Employers will use different types of salaries, such as hourly, daily, weekly, or monthly. To determine this, divide their annual basic salary by the number of pay periods in a year.

What is the difference between basic salary, total earnings, and net pay?

The different compensation terms tell a variety of stories about an employee’s pay.

Basic salary is the initial rate of compensation without any additional compensation. Basic salary is set and unchanging, but the other includes additions and deductions that change with each paycheck.

Total earnings include basic salary and additional income, such as bonuses and commissions.

Net pay is the amount of money employees receive after all taxes and deductions have been subtracted from their total earnings.

About Clockgogo

Clockgogo is a cloud-based and mobile software solution that simplifies roster management processes for HR professionals. With a database of over 3 million faces processed, it is one of the most efficient solutions available in the market. Clockgogo has been adopted by more than 1,500 companies across 17 countries, including Hong Kong, Singapore, Malaysia, Dubai, Saudi Arabia, the Philippines, and Australia.


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