Employees who are paid a set annual wage regardless of the number of hours worked or the amount of work completed are paid on a SALARY basis. Employees who are paid to complete a task, such as build a house are paid on a PIECE RATE basis. Salary system of compensation is often based on qualifications, seniority, experience and the degree of difficulty of the job that the staff is executing. Salary system usually have other bonuses attached. Piece rate system of compensation often pay workers for the work they have accomplished only.
