The authors consider labor market as a certain economic environment where, in the conditions of competition and through the mechanisms of supply and demand, the employment index and salary level are formed. The factors influencing on the supply and demand are analyzed in the article. The concept of the definition “salary” in the labor market context has been revealed. It has been explained how salary is formed in various markets. The authors explain the determinants behind the differentiation of salary rates of different employees. Based on the developed provisions, the employers will be able to regulate salary levels taking lead from the labor market, and the employees will be able to draw the conclusion that their salary depends on their skills and wish to improve them with the help of career development system and personnel training system.