Hourly Job Versus Salary Job: Which Pays Better?

Saturday, February 20, 2016, 6:00 AM | Leave Comment

If you’ve ever been on the hunt for a job, you’ve probably encountered this dilemma: will you be paid better for an hourly job or a salary job?

At first glance, a salary job may sound like the better deal. After all, you will get the same amount of money even if you finish your work faster than expected.

But it’s not so cut-and-dry, because you’ll be paid the same even if it takes you longer than expected to finish all of your work.

That must mean hourly jobs pay better, right?

Well … let’s take a closer look at the advantages and disadvantages of both. Whether or not an hourly or salary job is right for you depends a lot on your personal preferences and unique circumstances.

  • Advantages of an Hourly Job

    One of the main advantages of hourly jobs is a clear schedule of hours. Most people work jobs from 9 to 5, meaning when 5 o’clock rolls around, they can go home, regardless of how much work is left to be done. It will just have to wait until tomorrow.

    But for those times when the work really must be finished as soon as possible, hourly employees have the option to stay and work late. Working overtime is an easy way to get a little extra cash in your pocket, and in many workplaces, your hourly rate will actually increase if you work overtime.

    This makes overtime work extra appealing to employees but not to employers. Your boss doesn’t want to pay extra, and so you may be encouraged to go home and pick up where you left off tomorrow.

  • Disadvantages of an Hourly Job

    If you need to take a sick day or leave early at an hourly job, you won’t be paid. You may try to recoup lost wages by working overtime or filling in for a coworker on a day you normally take off.

    Therefore, the appeal of overtime changes from “ability to earn extra cash” to “a chance to catch up” on your normal wages for the week.

    Another disadvantage of hourly jobs is less tangible: of the two types of jobs, hourly jobs are not the most prestigious.

    There is a common perception that hourly jobs are for low-level positions and that salary jobs are reserved for leadership positions.

    You may be disappointed by the idea of an hourly job based solely on pride. Or, you may feel that you are more easily replaceable as an hourly worker.

  • Advantages and Disadvantages of a Salary Job

    When considering hourly versus salary jobs, they are two sides of the same coin. The advantages of an hourly job become the disadvantages of a salary job, and vice versa.

    If you work a salary job and you need to leave in the middle of the day to pick up your sick kid from school, you don’t need to worry about losing wages. As long as you get your work done on time, your boss should be happy.

    If you are particularly efficient, this can be to your advantage, as you are more likely to be able to make time for a three day weekend.

    And since you can often create your own schedule with a salary job, it’s the perfect scenario for parents who need a little extra time in the morning to see their kids off to school.

    However, if you’re not very efficient or you are inundated with deadlines and mountains of paperwork, you may find yourself constantly working into the evening to get everything done.

    From your employer’s perspective, as a salaried worker it doesn’t matter how long it takes you to do your job; it just has to get done. You won’t have a chance to work overtime to earn extra money.

    Finally, salaried jobs may also come with a more extensive benefits plan, but this will largely depend on your employer.

  • Some Positions Have to Be Hourly

    If a salaried position sounds like the best option for you, you may be out of luck depending on the type of work you do. Under the Fair Labor Standards Act, there are some jobs that must be hourly so that workers can be paid overtime.

    Other jobs, like those in the medical field, are hourly simply because of unpredictable demand.

    In other words, if you are a nurse you may be working incredibly busy 12-hour shifts one week, and then have a slower period where you have less patients to care for and thus shorter shifts.

  • So Which Actually Pays Better?

    A job with a good hourly rate and the option to work overtime will often result in higher pay, especially if you do not typically need many sick days.

    An employer who allows you to accrue paid sick days and who provides a
    good benefits package will make an hourly job a definite no-brainer.

    But a salary job with an excellent benefits package and a good salary may save you some money in the long-run on health care, insurance and other perks.

    If you have to make a decision between an hourly job and a salary job, it’s a good idea to find out what kinds of benefits you will receive at both jobs. The winner may not be clear based on dollar signs alone.

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