What is fixed pay and variable pay in salary structure?

There is no question that each of us work to make money. Some people always wonder as and when they do not get any on it. This is despite them seeing it in the letter of appointment they received when they joined the company that they work for. Like there are many terms in a payslip that they do not understand this seems to be one that many people fail to comprehend.

There are also people who are able to figure out the difference between the fixed salary and variable salary. We give you a few details that would help you understand the difference between the two. This would let you comprehend your payslip better the next time you get it for the time you have worked in a company.

Fixed Pay

This is the amount that you receive as compensation for you being present at the office during the time of work. The amount of money does not differ from each month unless you were on leave of absence. You usually get this amount as a standard pay for the work that you are supposed to do during the time you were present at the office. However, this is likely to change if you get an appraisal of sorts or get a raise on your salary. So, for the role you play at the office you receive the fixed salary and variable salary is not the same.

Variable Pay

The payment you get on variable pay can differ from one month to another and is attributed to various factors. It can either be monetary or non-monetary depending on what clauses are based on your appointment letter. It can also stand for the amount of money that you get towards your incentive for the work that you have done at the office. Sometimes, there is a ratio that is fixed towards it by your employer but in most cases, they are incentives for the work you have done.

So, the next time you would not have to ask what is variable pay and why it is low or high on a certain month as this explains the difference. You can also go through your letter of appointment to get clarity on the clauses and know in detail the difference in fixed salary and variable salary. Your HR department or your finances department who are in charge of depositing money in your account may also be able to clarify this for you on behalf of your employer.