What Is a Salary?
A salary is a fixed amount of pay for work, usually stated as an annual figure and paid in equal installments each pay period, regardless of the exact number of hours worked. Hourly pay, by contrast, is calculated from hours actually worked.
Converting a Salary
Monthly gross = annual salary ÷ 12. Approximate hourly equivalent = annual salary ÷ 2,080 for a standard full-time year.
Overtime
In the United States, whether a salaried worker earns overtime depends on whether they are classified as exempt or non-exempt.
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🔗 Related Terms
More Income & Work Terms
- Billable Hours
- Billable Utilization Rate
- Business Overhead
- Commission
- Cost to Company (CTC)
- Cost-of-Living Adjustment (COLA)
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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.