What is the difference between salary and commission?

What is the difference between salary and commission?

Flat-rate salary

Remuneration is the remuneration that the employer must deliver to the employee as consideration for the services rendered. It is divided into salary and wages, two concepts that are used interchangeably, but which have a marked difference in the way wages and salaries are calculated, as not everyone handles them properly.

It is a fixed remuneration that the employee receives in exchange for a specific job during a certain working day, i.e., neither the amount nor the periodicity of payment varies, nor should the time that the worker dedicates to his activity.

Another case may be that of the Civil Engineer who is hired to work in the construction of a bridge, with a fixed salary of $600,000, even when he only has to go to work on the days when the concrete castings are made (2 or 3 times a week).

He can work as many days and hours as he wishes, but -obviously- the amount of his remuneration will depend on his performance and the amount of time he dedicates to his activity.

Salary per commission example

Hello everyone A question: what is the difference between payroll, salary and wages? Some people tell me that salary is what you earn per month, and wages is what you get paid per week. I am not very clear. Could someone tell me the difference between the three, please? Thank you very much!

In practice, salary and wage are the same thing: what a person earns per month for a job he/she does for a third party when he/she is employed, that is, when he/she has an employment contract of a fixed or indefinite duration with a third party. This salary can be paid weekly or, most commonly, monthly. The payroll itself is the document that, together with the salary, the worker receives each month in which the salary is detailed (gross amount, income tax, social security, net amount). Since your paycheck shows your salary, some people use it as a synonym for salary, although it is not the same thing.

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Maybe the term is not used correctly, I am not sure now; keep in mind that you do not work for yourself, you work for someone else (person, company, entity, state) who is the one who pays you.

Wages on commission federal labor law

Wages on commission can benefit or harm your company, depending on how you apply it. Therefore, in this article you will find everything you need to know about it so you can make the best decisions.

Article 82 of the Federal Labor Law defines salary as “remuneration to be paid by the employer to the worker for his work”. And in Article 83 of the same law, it is mentioned that the salary can depend on time, per unit of work, commissions or at a fixed price.

Down payments are when the client needs to make several payments, with a down payment included. The one who makes the sale takes a percentage (or all) of this down payment. Recurring payments occur when people sell a subscription, and every so often they receive a commission from sales they have generated in the past.

It is often thought that the fact that employees are aware that they can earn large amounts of money is enough to motivate them. However, it is now known that money is not everything. There are other things that matter even more.

Commissioned labor which is

In such a case, the employers must consider that it is up to the dissatisfied employee to demonstrate before the respective Conciliation and Arbitration Board (Junta de Conciliación y Arbitraje, JCA) the manner in which, according to his statement, his commission-based salary is integrated.

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If these elements are not provided, the employee will not be able to prove the actual amount of his commission salary, that is, the reason for his claim, hence the authority is obliged to warn him so that he clarifies his initial written claim, thus leaving the employer relieved from providing such elements, in terms of article 873 of the LFT.

Source: Judicial Weekly of the Federation and its Gazette, Tenth Epoch, Volume 3, Book XIV, p. 1939, Labor Matter, Thesis XXVII.1o.(VIII Region) 17 L, Isolated Thesis, Record 2002198, November 2012.

As can be observed, the sense of this resolution is correct, since it reaffirms the provisions of the labor legislation itself, which requires the employee to provide the data and/or evidence that allows for creating certainty as to the manner in which his commission salary was generated in accordance with what was stated in his initial brief of claim, when he is the one who disputes his income, because he is in a position to provide the necessary elements for its determination, if he considers that from the beginning of the labor relationship, in the individual employment contract, together with his employer, he agreed on the rules under which such income would be generated.

What is the difference between salary and commission?
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