Base salary

What is base salary?

Base salary is the set monetary amount paid to an employee for their work, excluding bonuses, commissions, benefits, stock options, or other variable pay. It is usually shown as an annual or monthly gross amount before taxes and deductions.

This primary element of remuneration is stated in the employment contract and forms the basis for calculating salary increases, severance, retirement contributions and other financial reference points.

How does base salary work?

Base salary is agreed prior to starting employment and remains in place until it is renegotiated or changed during performance reviews, promotions or market adjustments. Key aspects include:

• Payment frequency (e.g. monthly, biweekly) is determined by local laws and company policy.
  
  
• Payroll calculations use the base salary as a starting point before applying deductions or adding other earnings.
  
  
• Employee classification (e.g. exempt vs. non-exempt in the U.S.) can affect how base salary is handled and whether overtime pay applies.
  
  

Typical influences on base salary include job title, industry norms, location, cost of living and the employee’s experience.

Why do companies use base salary?

Base salary delivers structure, predictability and fairness in pay. Employers rely on it to:

• Clearly define the minimum guaranteed earnings for a role.
  
  
• Anchor other forms of compensation, such as bonuses or equity.
  
  
• Benchmark against internal salary bands and external market rates.
  
  
• Promote transparency and consistency in pay across teams and regions.
  
  

Examples of base salary in practice

• A marketing manager is offered a base salary of $80,000 USD per year, plus a 10% performance bonus and stock options.
  
  
• An engineer in Berlin and another in São Paulo hold comparable roles but receive different base salaries denominated in EUR, adjusted for local market conditions and cost-of-living differences.
  
  
• A company reviews its salary bands annually to ensure base pay stays competitive in the global market.
  
  

Base salary vs gross salary vs total compensation

The terms base salary, gross salary and total compensation are often used interchangeably, but they refer to different things:

• Base salary is the fixed pay, excluding any additional payments.
  
  
• Gross salary includes base salary plus bonuses, commissions and other earnings before taxes.
  
  
• Total compensation covers gross salary plus benefits, stock options, allowances and other perks.
  
  

Being clear about these differences helps with setting realistic compensation expectations and negotiating job offers.

Things to consider with base salary

When setting or evaluating base salary, take into account the following:

• Local market rates and industry benchmarks.
  
  
• Legal minimums (e.g. minimum wage, salary thresholds for visas or tax statuses).
  
  
• Currency fluctuations when hiring across borders.
  
  
• Internal equity to avoid pay disparities and support fair compensation practices.
  
  

How Remote can help

Setting and managing base salaries across multiple countries can be complex, particularly when handling currency conversion, salary bands and compliance exposure. Remote makes this easier by:

• Offering localized salary benchmarks to help you make competitive, fair offers.
  
  
• Managing payroll, benefits and total compensation through our unified platform.
  
  
• Staying compliant with local labour laws, including minimum salary requirements and pay-transparency regulations.
  
  

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.