Base Pay

DEFINITION of 'Base Pay'

An employee's initial rate of compensation, excluding extra lump sum compensation or increases in the rate of pay. An employee's base pay can be expressed as a base hourly rate of pay or as an annual salary.

BREAKING DOWN 'Base Pay'

Extra forms of compensation that are excluded from base pay typically include: shift differential pay, on-call pay, pay for special assignment or incentive-based pay and bonuses.

As a general rule, an employee's base pay is the pay they will receive at a minimum, while extra forms of pay may or may increase the total pay above this level.

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