Do you often talk with other people about their salary?
Talking about money can be uncomfortable, especially when you’re not sure what is considered appropriate in another culture.
In today’s episode, Lindsay and Aubrey answer a listener’s question about salary in the U.S. and share four important terms you may hear when discussing compensation at work.
Money in the workplace
Aubrey asks Lindsay if she often talks about her salary with other people.
Lindsay shares that she does talk about salary with her partner, but not as much with friends or other people.
Aubrey mentions that she might talk about salary if someone is interested in working in her industry and wants a benchmark for how much they could earn.
Today’s episode is inspired by a Youtube listener’s inquiry.
“Hey Aubrey, Lindsay and Michelle, super interesting episode! What about salary in the USA? Base salary? Could you explain it in an episode? Thanks!”
This is a great question for someone who wants to gain insight about American business culture.
In the U.S., directly asking someone how much money they make can be considered too personal or impolite.
However, that doesn’t mean salary is never discussed.
You might have general conversations about typical salaries for different careers or industries.
If you’re a manager or decision maker, you may also need to discuss compensation packages for current or potential employees.
Of course, salary will also come up when you’re considering a new job or negotiating an offer.
Talking about salary
Knowing the right vocabulary can help you navigate these conversations professionally and confidently.
Here are four important terms you should know.
#1: Starting salary
Your starting salary is the amount of money you’re paid when you first begin a job, before any future raises or promotions.
This may come up when discussing a job opening, comparing offers, or negotiating a new position.
Examples:
- The starting salary for the marketing coordinator position is $62,000 per year, with a performance review after six months.
- Although Company A offered a higher starting salary, Company B had better long-term career opportunities.
#2: Base salary
Your base salary is the fixed amount of money you earn before bonuses, commissions, overtime pay, or other incentives are added.
This is an important distinction because the total amount someone earns can be higher than their base salary.
Examples:
- My base salary is competitive, and I can also earn an annual performance bonus.
- During the interview, I asked whether the base salary was negotiable or fixed for all new hires.
#3: Commission
Commission is money earned based on sales or business generated.
It’s often calculated as a percentage of the value of those sales and is common in sales-focused roles.
Depending on the compensation structure, an employee may receive a base salary plus commission.
Examples:
- The sales representatives receive a 10% commission on every new client they bring in.
- Her commission exceeded her base salary because she had an outstanding quarter.
#4: Bonus
A bonus is extra money paid in addition to an employee’s regular salary.
Bonuses may be given for strong individual performance, reaching specific goals, completing a successful project, or based on the company’s overall performance.
Examples:
- Everyone on the project team received a year-end bonus for exceeding their performance targets.
- The manager announced that employees who met their sales goals would receive a quarterly bonus.
Roleplay
Here’s a roleplay showing how this vocabulary might come up naturally in a business conversation.
In this scenario, Lindsay and Aubrey are business partners discussing the salary of a potential new hire.
Aubrey: Did you get a chance to review the compensation package for the new hire?
Lindsay: Yes, I did. The starting salary seems a bit low for someone with that level of experience.
Aubrey: Oh, really? I haven’t looked at it yet.
Lindsay: The base salary is competitive for entry-level, but this role isn’t entry-level.
Aubrey: If there’s commission and bonus potential, though, that could make up for it.
Lindsay: True, but I think we should offer a stronger guaranteed base salary.
Aubrey: Okay, sounds good. I’ll look it over this afternoon.
Takeaway
In U.S. business culture, it is not advised to directly ask someone what their salary is.
However, there will be situations where you need to be able to discuss salary.
If you’re interviewing for a new role, considering a job offer, or involved in hiring, understanding compensation vocabulary helps you ask better questions and understand what is actually being offered.
Remember that a salary number doesn’t always tell the whole story.
Knowing whether someone is talking about a starting salary, base salary, commission, or bonus can help you understand the complete compensation package and avoid confusion.
Use today’s vocabulary to participate confidently in these discussions.
Check out BE 630: When Should You Let Something Play Out? for more practical business English.
Which of these salary terms have you heard or used at work?
Share your answer in the comments below!
