Base salary

What is base salary?

Base salary is the fixed sum an employee is paid for their work, excluding bonuses, commissions, benefits, stock options or other variable pay. It’s generally shown as an annual or monthly gross figure before tax and deductions.

This core component of compensation is specified in the employment contract and forms the basis for calculating pay rises, severance, retirement contributions and other financial benchmarks.

How does base salary work?

Base salary is agreed before employment starts and normally stays unchanged unless it’s renegotiated or altered during performance reviews, promotions or market-driven pay adjustments. It operates as follows:

• Payment schedule (for example, monthly or fortnightly) depends on local law and company policy.
  
  
• Payroll calculations start from the base salary before deductions are applied or additional earnings are added.
  
  
• An employee’s classification (for example, exempt versus non‑exempt in the U.S.) affects how base pay is handled and whether overtime entitlements apply.
  
  

Factors that commonly shape base salary include job title, industry benchmarks, location, local cost of living and the employee’s experience.

Why do companies use base salary?

Base salary gives structure, predictability and fairness to pay. Employers use it to:

• Set out the minimum guaranteed pay for a role.
  
  
• Anchor other pay elements, such as bonuses or equity.
  
  
• Compare against internal salary bands and external market rates.
  
  
• Support transparency and consistent pay across teams and regions.
  
  

Examples of base salary in practice

• For example, a marketing manager may be offered a base salary of $80,000 a year, plus a 10% performance bonus and stock options.
  
  
• An engineer in Berlin and one in São Paulo performing the same role can receive different base salaries in EUR, adjusted for local market conditions and cost-of-living differences.
  
  
• A company updates its salary bands each year to keep base pay competitive in the global market.
  
  

Base salary vs. gross salary vs. total compensation

People often mix up base salary, gross salary and total compensation, but each term has a distinct meaning:

• Base salary refers to fixed pay, excluding additional earnings.
  
  
• Gross salary covers base pay plus bonuses, commissions and other earnings before tax.
  
  
• Total compensation comprises gross salary together with benefits, stock options, allowances and other perks.
  
  

Knowing these differences matters when setting pay expectations and negotiating job offers.

Things to consider with base salary

When you set or review base salary, keep the following in mind:

• Local market rates and industry benchmarks.
  
  
• Legal minimums (for example, minimum wage or salary thresholds for visas and tax status).
  
  
• Currency movements when hiring across borders.
  
  
• Internal equity to avoid pay gaps and support fair compensation practices.
  
  

How Remote can help

Working out and managing base salaries across multiple countries can be complex — especially with currency conversions, salary bands and compliance risks. Remote simplifies the task by:

• Providing localized salary benchmarks so you can make competitive, fair offers.
  
  
• Managing payroll, benefits and total compensation through our unified platform.
  
  
• Keeping you compliant with local labour laws, including minimum salary rules and pay-transparency requirements.
  
  

Remote helps you get global compensation right, from base salary to total rewards. Check out Remote’s salary explorer to save time and money on compensation planning.