The term "average salary" refers to an arithmetic mean calculated from a set of individual salaries or wages. It represents the midpoint of the data set, with half of the values being higher and half being lower than this central value. In other words, it is the sum of all salaries divided by the number of employees, then divided again by the total number of employees to get an average. This statistic can provide insight into what most people in a particular job or industry typically earn as compensation for their work.