pay

Pay refers to compensation provided to an individual in exchange for labor or services. It typically includes wages or salaries, but may also comprise bonuses, commissions, tips, overtime, and a range of benefits such as health insurance, retirement contributions, paid leave, and other non-cash rewards. Together, these elements form an employee’s total compensation package, though the term pay is often used to refer specifically to regular earnings.

Pay is delivered through various methods: cash, checks, direct deposit, electronic funds transfer, and increasingly mobile or digital wallets. Net pay is gross pay after deductions such as income tax, social security or pension contributions, and any voluntary withholdings. Deductions may include health premiums, wage garnishments, and union dues.

Structure and rules influence how pay is determined. Hourly workers are paid for hours worked, salaried workers receive a fixed regular amount, and piece-rate or incentive plans tie pay to output or performance. Overtime rules, minimum wage requirements, and anti-discrimination and equal pay laws establish legal standards for pay calculation and distribution.

Payroll administration handles calculation, withholding, and distribution, along with record-keeping and reporting to authorities. Many organizations outsource payroll or use payroll software to ensure compliance and accuracy.

Context and trends affect pay systems. Digital payments and fintech have accelerated speed and precision of payroll, while the growing gig economy has increased use of on-demand and variable pay. Transparency and pay equity initiatives aim to reduce gaps in earnings across gender and race.