Piece Rate Pay

Piece rate pay is based on completing a particular task or making a particular piece of goods.1 It is a method of payment based on units of production, instead of actual time worked.

Many employers pay piece rate to establish an incentive system. The agriculture, manufacturing, automotive-repair and truck-driving industries commonly use the piece rate compensation system, but other industries use it as well. For example, a factory worker might be paid per item made on the assembly line; a mechanic might be paid a set amount per brake job or tune-up; a carpet layer might be paid per yard of carpet laid; or a nurse might be paid per procedure.

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