Salary vs. Payroll

By Jaxson

  • Salary

    A salary is a form of payment from an employer to an employee, which may be specified in an employment contract. It is contrasted with piece wages, where each job, hour or other unit is paid separately, rather than on a periodic basis.

    From the point of view of running a business, salary can also be viewed as the cost of acquiring and retaining human resources for running operations, and is then termed personnel expense or salary expense. In accounting, salaries are recorded in payroll accounts.

    Salary is a fixed amount of money or compensation paid to an employee by an employer in return for work performed. Salary is commonly paid in fixed intervals, for example, monthly payments of one-twelfth of the annual salary.

    Salary is typically determined by comparing market pay rates for people performing similar work in similar industries in the same region. Salary is also determined by leveling the pay rates and salary ranges established by an individual employer. Salary is also affected by the number of people available to perform the specific job in the employer’s employment locale.

  • Payroll

    A payroll is a company’s list of its employees, but the term is commonly used to refer to:

    the total amount of money that a company pays to its employees

    a company’s records of its employees’ salaries and wages, bonuses, and withheld taxes

    the company’s department that calculates funds and pays these.Payroll in the sense of “money paid to employees” plays a major role in a company for several reasons.

    From an accounting perspective, payroll is crucial because payroll and payroll taxes considerably affect the net income of most companies and because they are subject to laws and regulations (e.g. in the US, payroll is subject to federal, state, and local regulations).

    From a human resources viewpoint, the payroll department is critical because employees are sensitive to payroll errors and irregularities: Good employee morale requires payroll to be paid timely and accurately. The primary mission of the payroll department is to ensure that all employees are paid accurately and timely with the correct withholdings and deductions, and that the withholdings and deductions are remitted in a timely manner. This includes salary payments, tax withholdings, and deductions from paychecks.

  • Salary (noun)

    A fixed amount of money paid to a worker, usually calculated on a monthly or annual basis, not hourly, as wages. Implies a degree of professionalism and/or autonomy.

  • Salary (verb)

    To pay on the basis of a period of a week or longer, especially to convert from another form of compensation.

  • Salary (adjective)


  • Payroll (noun)

    A list of employees who receive salary or wages, together with the amounts due to each.

  • Payroll (noun)

    The total sum of money paid to employees.

  • Payroll (noun)

    The salaries and wages and the deduction of taxes etc.; the department in a company responsible for this.

  • Payroll (noun)

    Bribes paid to people

  • Payroll (verb)

    To place on a payroll.

  • Salary (noun)

    a fixed regular payment, typically paid on a monthly basis but often expressed as an annual sum, made by an employer to an employee, especially a professional or white-collar worker

    “he received a salary of £24,000”

    “a 15 per cent salary increase”

  • Salary (verb)

    pay a salary to

    “the Chinese system—salary the doctor and stop his pay when you get ill”

  • Payroll (noun)

    a list of a company’s employees and the amount of money they are to be paid

    “there are just three employees on the payroll”

  • Payroll (noun)

    the total amount of wages paid by a company

    “small employers with a payroll of less than £45,000”

Oxford Dictionary

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