Disclaimer: This is a language guide, not a taxation guide. For accurate tax information, contact your local tax department.

Although the words ‘wage‘ and ‘salary‘ are often interchanged, this is how they should be used:

Wages are paid to hourly-paid workers, and may be paid daily, weekly, fortnightly or monthly, although fortnightly seems most common these days. They are nearly always paid in arrears (i.e. after the work has been done). The minimum wage is the smallest hourly rate allowed by government regulation, or by a trade union within a particular industry.

Salaries are paid to workers who have a regular monthly amount, and may be paid partially in advance, and partially in arrears.

Both wages and salaries may be supplemented by overtime pay and bonuses.

I can say that I am on an hourly wage, or that I am on a monthly salary.

Sales people often have a basic salary, with sales commissions paid periodically.

Travel expenses and mileage allowances may be paid monthly – limits are set by the tax department (e.g. €0.45 per km in Finland).

I incur travel expenses during the month. I then fill in and submit a travel expenses claim sheet, and am reimbursed (paid back) the following month.

Non-taxable items are not part of wages or salaries, and can be paid at the discretion of the company.

Taxable benefits include company cars, phones and lunches. Their value is taxed as if they were earned income, like wages and salaries.

Unearned income includes items like interest from investments, and inheritances. Each type of unearned income is usually taxed by a fixed percentage rate.