What actually happens in early and late binding

What actually happens in early and late binding

I have created two objects of Manager class in Main() as below:
Manager mgr = new Manager();
Employee emp= new Manager();
What I theoretically understand is that 1st object creation [mgr] is
compile time binding whereas 2nd object creation [emp] is run time
binding. But I want to understand it practically what actually happens
that decides that function call will be binded to Function name at compile
time [in my case, mgr] or run time [in my case, emp].
What I understand here is that, in both these situations objects are to be
created at run time only. If I say new Manager() then it has to create
object of Manager only. So, Please suggest what actually happens at run
time that is not the case with compile time.
namespace EarlyNLateBinding
{
class Employee
{
public virtual double CalculateSalary(double basic, double hra,
double da)
{
return basic + hra + da;
}
}
class Manager:Employee
{
double allowances = 4000;
public override double CalculateSalary(double basic, double hra,
double da)
{
return basic + hra + da+allowances;
}
}
class Program
{
static void Main(string[] args)
{
Employee emp= new Manager();
double empsalary = emp.CalculateSalary(35000, 27000, 5000);
Console.WriteLine(empsalary.ToString());
Manager mgr = new Manager();
double mgrsalary = mgr.CalculateSalary(35000, 27000, 5000);
Console.WriteLine(mgrsalary.ToString());
Console.Read();
}
}
}