Base Pay

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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.

INVESTOPEDIA EXPLAINS '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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