iCEV Personal Finance Practice Test

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Question: 1 / 400

What is income paid to an employee at regular intervals, regardless of hours worked?

Commission

Wages

Salary

The correct answer is salary because it refers to a fixed regular payment made to an employee, typically expressed on an annual basis but often paid out in monthly or bi-weekly installments. Unlike wages, which are usually calculated based on the number of hours worked, salary remains constant regardless of the actual hours an employee may put in. This means that employees who earn a salary receive the same pay each pay period, providing financial stability.

In contrast, commission is typically performance-based and varies depending on sales or productivity, while wages are based on hourly rates, meaning shifts in hours worked can influence total compensation. Overtime pay refers specifically to additional pay earned when an employee works beyond their standard hours, which is again tied to the number of hours worked rather than a fixed income. Thus, salary is distinctly noted for its regularity and predictability in income payment.

iCEV Personal Finance Practice Test

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