Base Pay
Base pay is the initial rate of compensation an employee receives in exchange for their work, excluding bonuses, benefits, overtime, or any other forms of additional compensation. Base pay can be expressed as an hourly rate, weekly salary, monthly salary, or annual salary. Understanding base pay is important for benefits calculations, overtime eligibility (under the Fair Labor Standards Act), and competitive compensation benchmarking. A PEO provides payroll administration and compensation data that helps businesses set competitive base pay rates.