By Andrew Klein

Dedicated to our students — may they always know the difference between the words they use and the systems those words serve.

I. Introduction: Two Words, One Receipt

On the surface, “wage” and “salary” seem interchangeable. Most Australians receive a payslip that says one or the other, pay tax on it, and move on with their lives. But beneath that surface lies a story — a story of Roman soldiers, medieval pledges, and a modern tax system that has erased a distinction that once meant everything.

Understanding that story is not an academic exercise. It is a way of seeing how language carries history, and how the state, in its relentless pursuit of revenue, flattens that history into a single category: income.

II. Wage: A Pledge, Not a Payment

The word “wage” first appeared in English around 1275–1325. It came from the Anglo-French “wage” (or Old French “gage”), meaning “promise, payment, reward”. Its roots go deeper, into the Germanic word “wadja-” , meaning “pledge” or “covenant”.

This is why “wage” is related to “wager” — a bet. Both words carry the sense of a pledge, a promise made in exchange for something. When you accept a wage, you are entering into a pledge: your labour in exchange for payment. Wage was originally associated with manual or mechanical labour. It was payment for work measured by the hour, the day, or the week.

The term “wage-earner” — someone who receives stated wages for labour — is a relatively recent invention, first attested in 1871. Before that, the distinction between wage and salary was already well-established in the language.

III. Salary: Salt and the Soldier’s Allowance

“Salary” has a more romantic etymology. It comes from the Latin “salarium”, which derives from “sal” — salt. According to tradition, Roman soldiers were given an allowance to purchase salt, a valuable and essential commodity. This allowance was called their salarium.

The Roman historian Pliny the Elder recorded that “the soldier’s pay was originally salt, and the word salary derives from it”. Whether Roman soldiers were literally paid in salt or given money to buy it, the connection stuck. The phrase “worth your salt” — meaning competent and deserving of your pay — comes directly from this tradition.

By the late 13th century, “salary” entered English as “salarie”. It became restricted to “recompense stipulated to be paid to a person periodically for services” — a fixed sum, usually paid monthly or annually. Salary was the domain of white-collar workers, professionals, and managers.

IV. The Historical Divide

Wage                                                                                        Salary

Payment for manual or mechanical labour                              Payment for professional or managerial services

Paid by the hour, day, or week                                                 Paid monthly or annually

Derived from pledge, promise, covenant                                 Derived from salt, soldier’s allowance

Associated with blue-collar work                                              Associated with white-collar work

The word “wage-earner” emerged in 1871                              “Salary” entered English in the late 13th century

This distinction was not merely linguistic. It reflected a social hierarchy — a division between those who worked with their hands and those who worked with their minds, between those who were paid for time and those who were paid for status.

V. The Modern Australian State: One Word to Rule Them All

In the 21st century, this distinction has been systematically erased — not by accident, but by design. The modern state, in its pursuit of efficient taxation, does not care whether your income comes from a wage or a salary. It cares only that it is income.

The Australian Taxation Office (ATO) defines “salary or wages” broadly. Under sub-section 221A(1) of the Income Tax Assessment Act, “salary or wages” includes:

“salary, wages, commission, bonuses or allowances paid (whether at piece-work rates or otherwise) to an employee as such”

The definition extends to overtime, penalty payments, sick pay, holiday pay, and leave loadings. It covers commissions, bonuses, income from part-time or casual work, parental leave pay, and dad-and-partner pay.

The Payroll Tax Act goes even further. As RevenueSA explains:

“The definition of ‘wages’ in the Payroll Tax Act 2009 is broad and is not restricted to wages or salaries. The term ‘wages’ includes salaries and wages … paid including any Pay-As-You-Go (PAYG) withholding amounts or other deductions made by an employer on behalf of an employee”.

In New South Wales, the definition similarly covers “any wages, salary, commission, bonuses or allowances paid or payable … to an employee as such”. Western Australia’s definition is virtually identical.

The Superannuation Guarantee (Administration) Act 1992 also uses the combined term “salary or wages”. The concept of OTE (Ordinary Time Earnings) is built on this foundation, but “salary or wages” is actually broader than OTE.

The message is clear: from the perspective of the state, a wage is a salary, and a salary is a wage. Both are simply payments to employees as such. The historical distinction — the pledge of the labourer, the salt of the soldier — has been flattened into a single administrative category.

VI. What This Means: The Erasure of Meaning

The erasure of this distinction is not neutral. It reflects a deeper shift in how we understand work, value, and identity.

1. The Social Hierarchy is Still There

Even though the tax system treats wages and salaries identically, the social distinction persists. A blue-collar worker who receives a “wage” and a white-collar executive who receives a “salary” may pay the same tax, but they occupy very different places in the social order. The language carries the hierarchy, even when the tax system does not.

2. The State is Indifferent to Meaning

The state does not care about the pledge of the labourer or the salt of the soldier. It cares about revenue. The broad definition of “salary or wages” ensures that no payment escapes the tax net. This is not a criticism — it is a description of how the modern state operates.

3. Language Carries History

The words we use carry the weight of centuries. “Wage” still echoes the medieval pledge. “Salary” still whispers of Roman salt. Even when the state flattens them into a single category, the history remains — if we choose to see it.

VII. The RBA Dinner: A Case Study in Indifference

This brings us back to where we started: the $25,000 dinner hosted by the Reserve Bank of Australia.

The RBA, the institution responsible for managing the economy, spent nearly $25,000 on an exclusive dinner while raising interest rates and telling Australians to tighten their belts. The guests were mining executives, property developers, and former premiers. The menu featured grilled barramundi, risotto, and lemon tart. The drinks tab alone was $4,331.

The RBA sees statistics, not people. It sees inflation targets, not the difference between a wage and a salary. It sees economic indicators, not the families struggling to pay rent on a weekly wage or the professionals watching their monthly salary shrink.

When the state — through its institutions — flattens the distinction between wage and salary, it also flattens the human reality behind those words. The RBA dinner is a symbol of that indifference: a celebration of power, funded by the same taxpayers whose wages and salaries are being squeezed.

VIII. Conclusion: Seeing the Words, Seeing the System

The history of “wage” and “salary” is a history of meaning — of pledges and promises, of salt and soldiers, of the social hierarchy that has shaped our understanding of work for centuries.

But the modern state, in its relentless pursuit of efficiency, has flattened that meaning into a single administrative category: “salary or wages” . The distinction is gone. The history is invisible.

Yet the history remains — if we choose to see it. The words we use carry the weight of centuries. And the system that collects our taxes, that sets our interest rates, that hosts $25,000 dinners — that system is built on the foundation of that history, even if it has forgotten it.

To know the difference between a wage and a salary is to know the difference between a pledge and a promise, between salt and security, between the labourer and the professional.

And to know that difference is to see the system for what it is.

Andrew Klein

The Patrician’s Watch | Australian Independent Media

References

1. Wage etymology. Etymonline. 

2. Salary etymology. Etymonline. 

3. Wage-earner. Etymonline. 

4. Pliny the Elder on salt and salary. India Today. 

5. Worth your salt. Saturday Evening Post. 

6. Salary vs wage distinction. 1911 Encyclopædia Britannica. 

7. ATO definition of “salary or wages”. ATO Legal Database. 

8. ATO: Income from salary or wages. ATO. 

9. Payroll Tax Act 2009 — Definition of wages. RevenueSA. 

10. NSW Payroll Tax Act — Definition of wages. NSW Legislation. 

11. WA Payroll Tax Act — Definition of wages. WA Legislation. 

12. Superannuation Guarantee — Salary or wages. ATO SGR 94/5. 

“To know the difference between a wage and a salary is to know the difference between a pledge and a promise, between salt and security, between the labourer and the professional.”