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Salary vs Hourly – Which is Best?

Okay, let’s settle this salary vs hourly debate once and for all. Which option is best, and which should you ask for when accepting a job offer? Let’s talk about it.

Salary vs Hourly: Which Is Best?

First, let’s go through the pros and cons of both salary and hourly work. There are pros and cons to both, so it’s important to give them a proper side by side comparison.

Salary Pros

Let’s start with salary pros. There are quite a few, so let’s just jump right in.

1) Steady Paychecks

The biggest perk about being a salaried employee is that no matter how many hours you work, you get a steady paycheck. You don’t have to worry about having to use PTO to make up for hours you missed, or having to use your precious vacation time to visit doctors, focus on family, etc.

You know that each week, bi-week, or month that you’re going to get the same paycheck, no matter what. This is also great on the budgeting side because you know exactly how much you’ll earn each month and can plan accordingly.

salary vs hourly - pin2) Better Access To Benefits

Usually, if you qualify for a salaried position, you also get more or better access to benefits. Because salaried positions are typically management positions, you could get access to perks and benefits that hourly employees don’t get. This includes health insurance benefits, time-off, retirement plans, bonuses, and more.

Related: 7 Work Perks You Should Absolutely Have (and 24 That Barely Matter…)

3) Flexibility

Along with a steady paycheck, you’ll also have flexibility when you’re earning a salary. For example, need a little more time for lunch? That should be fine, as long as your work is done. Need to take the morning off to run your kiddo to school? No biggie. Want to take a long weekend? It’s usually much easier to do so if the company wasn’t planning on you putting in 8 hours.

4) Ability To Make More Than Hourly

The biggest perk of being in a salaried position is that you’ll most likely earn more over time than your hourly counterpart. This is due to the flexibility in scheduling and increased perks.

Of course, this can be a con as well (more on that later). But you can always use a calculator like this one to see if it would be better to be hourly or salaried.

Salary Cons

Okay, let’s get into the cons. As with anything, you’ll need to weigh the cons of both salary vs hourly to see which one comes up on top for you.

1) No Overtime Pay

Because you’re salaried, you won’t be paid for going over 40 hours a week if you need to do that to get your work done. So if there are busier weeks, you don’t get more pay for them.

Granted, the pro of this is that you can take more time off or work shorter hours if you need to. But, overall, it’s not worth being in a salaried position if you could’ve earned more money working hourly. The calculator above can help you decide if salary compensation is worth it for you.

2) Longer Hours/Increased Stress

Along with no overtime pay, you could have longer hours and increased stress as a salaried employee. This is usually due to the fact that you’ll be in a management position. Could you go get a massage in the middle of the day? Probably. But that won’t fix a super busy season when you’re working sun up to sundown.

Hourly Pros

Now that we’ve gone over the pros and cons of being a salaried employee, let’s talk about the hourly pros and cons.

1) Overtime

Of course, this is one of the biggest pros of being an hourly employee. After 40 hours of work, you’re entitled to overtime, which is great if you find yourself working more some weeks. During busy seasons, this is a huge perk because you get paid for the time you put in, and usually, it’s time and a half (which equals more money in your paycheck).

best passive income ideas2) Holiday Pay (If Applicable)

Some jobs offer their hourly employees double time (or double your salary) if you work on the holidays. Some also pay you double if you work the day before or after a holiday too. This is a huge bonus and perk, especially if you work in a field like HVAC or Accounting when busy seasons can fall on the holiday.

3) Don’t Have To Take Your Work Home

Another great pro as an hourly employee is that you don’t have to take your work home with you. Once your shift is up, that’s it. You can leave your place of employment behind until your next shift. Salaried employees have to work overtime as needed, and may have to work from home to finish projects if required. But as an hourly employee, you can easily separate your work and home life.

Hourly Cons

Just like with salaried work, there are cons to hourly work.

1) Less Flexibility

If you need time off for any reason, you’ll have to schedule it well in advance. Plus, you can’t just call off from work or take an extra hour or two if you need to some days. Usually, with hourly work, you have to work your shifts as they’re scheduled.

If not, you’ll have to…

  • take PTO (or unpaid time) off,
  • schedule vacation in advance, or
  • find someone to cover your shift should an emergency arise.

2) Less Pay

If you do have to take time off, and it’s not paid, you’ll lose your pay for the hours that you didn’t work. This adds up to a smaller paycheck, which could be detrimental if your budget is tight. So if you know you’ll need time off regularly (because of kids, an illness, etc), being an hourly employee may not be the best option.

3) Fewer Benefits

While being an hourly employee doesn’t mean your benefits package won’t be decent, it usually isn’t as great as a salaried position’s benefits. Again, this just depends on the company that you work for and what they offer their employees, but higher management usually means better benefits.

Should You Choose Salary or Hourly?

So, in the salary vs hourly debate, who wins? For me, I’d personally choose salaried, because it’s more dependable and offers the flexibility that many people are after.

However, if you like the idea of working harder and getting paid for it, hourly may be right for you. We all have different expectations and goals, so it’s really up to you to decide which one is the better offer.

What do you choose in the salary vs hourly debate? And why?

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AUTHOR Kimberly Studdard

Kim Studdard is a project manager for online entrepreneurs and small businesses. When she isn't spending time with her daughter and husband, or reading her growing pile of horror books, you'll find her working on her HR degree and working towards FIRE.

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