All Articles

Different Ways to Make Money: Wage, Salary and Commission

People earn an income when they are hired by an employer to work at a job. Income is earned as a wage, a salary or a sales commission.

Let’s look at an example of each:

(Article continues below video)

Andrew works as a waiter at the Pancake Hut. He earns a wage. A wage is a set amount of money per hour of work. Andrew’s wage is \$10 per hour.

Ellie works as a scientist. She earns a salary. A salary is a set amount of money per year. Ellie’s salary is \$50,000 per year. If she adds up all her paychecks this year, the total will equal \$50,000.

Toby works as a real estate agent. He earns a sales commission. A sales commission is an amount of money based on part of a sale amount. Tony is helping a family sell their house. The family agrees to pay Tony 5% of the house’s sale price. Tony sells the house for \$200,000. The family pays him \$10,000, which is 5% of the \$200,000 sale.

It’s a Money Thing® is a registered trademark of Currency Marketing and is in partnership with Randolph-Brooks Federal Credit Union (RBFCU) to offer a digital library of financial topics.