Small Business Glossary and Definitions

Base Wage Rate is the initial compensation rate an employee earns, including lump sums such as overtime or bonuses, plus raises and benefits. It can be expressed as hourly, weekly, monthly or annual salary.

Forms of compensation usually left out of the base wage rate include incentive-based pay, special assignment pay, on-call pay and shift differential pay.

Generally, the base wage rate is the minimum an employee should expect to get during a certain pay period. Hourly employees are paid based upon the number of hours worked, while salaried employees are expected to work a set number of hours for their base wage rate, although some do not have to track their time.