“Base pay” is the initial salary paid to an employee for a given job. It excludes several other components of the total potential compensation an employee might receive, such as,bonuses, benefits, insurance, commissions, dividends, or stock options. Base pay can be established at an hourly, weekly, monthly, or annual rate.
Base pay is the minimum guaranteed pay an individual will receive; gross pay includes all additional earnings; and net pay is the actual salary an individual receives after taxes and deductions.
Base pay is determined based on several factors such as the average market pay rates for individuals in similar roles in the same industry and geographical region, the number of job positions and availability of individuals with the demanded skills and experience, and base salary ranges established by an individual employer. Base pay offered to different employees for the same job may fall anywhere in the salary range, depending on several personal attributes such as education, expertise, experience, past performance, etc.
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