Wages mean payments made for the services of labor, the services may be physical or mental . It defined “As a sum of money paid under contract by an company to a worker for services rendered” or payment made to ordinary employees, skilled or unskilled, is just “Wages”. These may be paid by the day, by the week or by the month or according to the work done.
If salary received on the basis of time. It called time salary. If salary received on the basis of work done it called price salary. It may be general or relative by general salary. It does not mean the general rate but the share of the notional income claimed by labor as such, as against the other factors of production while relative salary refer to salary in relation to different employment and to different persons in the same employment.
Wages may also be classified as nominal wages and real wages. Nominal salary which paid or received in terms of money. While real salary are equal to money salary plus the extra facilities and concessions earned by the workers or real wages are total benefits accruing to the worker. So welfare of the people, standard of living of the people and real happiness of the depends on real wages. It is possible that money salary of a person are higher but he may be passing miserable life while another person who is receiving lower money wages but to extra facilities,
Concessions and benefits he may be passing luxurious life. Suppose that a person is receiving cash salary equal to Rs 3000/-P.M. He is unable to purchase basic necessities of life while another person who is also receiving Rs.3000/-P.M but free medical facilities, free educational facilities, free educational facilities for children,free residence and free transport facilities are available. Although cash salary are equal yet real salary of the person who is also receiving extra facilities are higher.