Published On: Tue, Jun 24th, 2014

What’s Better: Hourly Versus Salary


Image from The Poch Times

There can be a great comparison on which employment method to take; are you ready to go for an hourly job or do you prefer to have a fix salary every month? As an employee, and definitely a person who would opt to take a job which requires big pay yet untiring one, knowing which of the two is more compensating and fairer is helpful.

Employees who are paid on an hourly basis are usually not regular workers; most of the time they are just contractual. In an hourly job, you are paid according to the time you spent working. It means your every hour is being paid by your employer. Employees who think of being compensated based on the hours they worked usually find this method better. Why not? You are justly paid.

On the other hand, salary is paid to regulars like managers and supervisors. You may be interested to this method because you are sure about your paycheck at the end of the month. Remember that in this method, your hours worked are ignored. In other words, you may work more than 40 hours a week or less than that time.

Neither one of these methods is guaranteed to be the best fit for a specific job or industry because it depends on the rate offered by the company. If you are turned between these two options, you should think carefully. Think which of the options can give you more perks and less hassle. Sometimes the rate is not just the thing to be considered. So before we go to the advantages of either method, you should learn first the considerations that you must observe so as not to quit the job if you don’t like it.

  1. The position. Well of course you like the position that is why you applied to the job. However, the question there is; does it require more energy? It is very important that you think about how it will challenge your physical attribute. You might get a good payment but you will compromise your health.
  2. Rate. Here we are going to separate hourly rate and fix salary. You should always keep in mind the question; is the gross pay you are going to receive just? Besides, this is what we are talking about. You should receive the right payment for your service.
  3. Location of the company. Remoteness of the company or the place of the establishment is very important to consider because you will have to incur transportation expense. You wouldn’t want to pay for it and just realized your paycheck just went to transportation fare.
  4. Working hours. Well this is not a problem for those employees who are paid on an hourly basis because they are paid for overtime. For salary-based employees, know if the company strictly implements 40-hour policy. Also, you might also want to know the benefits they give for employees who work beyond office hours. If you think the long hours worked is worth it because of the benefit, then never mind about this.

These four are the common things which you should consider before accepting a job based on either of the payment method.

Each of the method has its own advantages. You should know these advantages because it is crucial that you know what you can get out of the payment method.

Advantages of hourly-based payment

  1. Guaranteed payment for hours worked. This is why more people love to work on an hourly basis especially freelancers who have remote employers. You are certain that the time you have spent working is paid unlike salary-based payment.
  2. You usually have predetermined hours to work. Since the employer won’t let you work too much because that would mean paying more, the company usually imposes a specific number of hours every day. Companies do this because they don’t want to incur much money paying overtime.
  3. Overtime rate. The best advantage of this method is that your overtime rate is usually one and a half percent of your regular rates. For example, if your regular payment is $10 per hour, then the next hour from your normal 8-hour load will be paid $15. That is pretty impressive.
  4. Double payment during holidays. One of the perks of this method is that there are companies which double the hourly payment of their workers if the latter work during holidays.

Advantages of Salary-based payment

  1. Guaranteed monthly fixed paycheck. If you will experience a guaranteed payment for hours worked in an hourly-based payment, you will be guaranteed a fixed monthly salary.
  2. Flexible schedule. This is the very core of these advantages. Some employers give their employees the opportunity to have a vacation while still having the same fixed monthly salary. On the plus side, if you have a very flexible schedule, you can leave office early if your work is done for the day.
  3. Higher position. Well if you are a salaried employee, then you will have a better chance of getting promoted because you are in a high position already. This is not usually true because there are companies that pay regular salary to lower positions.

Working either as an hourly employee or a salaried employee gives different advantages. Just remember that when choosing between the two payment methods, always consider some factors which may affect your convenience. You should not think of the rate alone. Always consider the three more and some other factors.

At the end of the day it’s you who will choose which payment method would be better over the other. It is a self decision that should be pondered carefully. There are people who get carried away by the gross pay. If you don’t want to be sued for intentionally leaving your company because you suddenly realized you picked the wrong payment method, then don’t be excited. Both of the two are good in their own respective features. It only depends on the job position and other considerations.

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