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What’s the difference between salary and hourly pay?
Salaried employee vs. hourly pay—what’s the difference?
Salary vs. hourly pay—pros and cons
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Pros of salaried pay
- The amount of money you’re paid each month is not decided by the number of hours you work—this helps when you’re creating a budget and planning to pay your bills.
- You’ll receive an agreed-upon amount of paid holiday allowance and sick days to use each year, which will be outlined in the contract.
- In addition to your salaried pay, you’ll often have access to other benefits like healthcare and pension schemes—great benefits of salary vs. hourly pay
- Permanent salaried employees are often given more trust and responsibility, which can bring more opportunities to progress in your career.
Cons of salaried pay
- As an employee, you deliver work in exchange for your annual salary. You might be required to work more than your contracted hours to do this, but your employer won’t have to pay you extra.
- There might be less flexibility when it comes to taking annual leave, because you have to fit your holidays around other employees and work commitments.
- Working for a company means it might be tricky to work for anybody else. If you’re looking to change jobs or take on extra work, you need to manage this around your current employer and check if you’re allowed to accept other work under your current contract.
Pros of hourly pay
- You’re paid for every hour you work and are eligible for overtime pay if you work more than your contracted hours.
- Hourly work could offer you an opportunity to earn more money over a shorter period by working overtime.
- There can be increased flexibility, meaning you can adjust your work/life balance to fit around your interests.
Cons of hourly pay
- Budgeting can be more difficult because your income will depend on the availability of your work.
- Holidays and sick days are unpaid.
- There isn’t a set amount of guaranteed hours each week/month and if hours are cut, you’ll earn less.
- There’s generally no access to any of the additional benefits that you have with salaried work.
How to calculate annual salary from hourly wages
How to convert your salary to hourly wages
Is it better to get paid hourly vs. salary?
- Stability. Do you need the stability of a regular income? It may be that you have set outgoings each month, in which case a salary may be best for you. However, hourly pay often allows for you to work extra hours if needed. This could help with any unexpected payments or if you’re saving for something special.
- Flexibility. If you need to be flexible with how much work you take on and the hours and days you work, hourly paid jobs can often offer more of this. Jobs with a salary will typically need you to request any time off and will only allow a certain amount of time off per year.
- Benefits. Salaried jobs usually provide you with a benefits package including paid annual leave, a pension, or bonuses.
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- How to calculate hourly rate from salary?
- What is a salaried employee?
- What is an hourly employee?
- Is annual salary the same as annual income?
- What is gross pay vs. net pay?
- What do I need to open a free bank account with N26?
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