Many people feel that earning a salary gives them a consistent paycheck, as well as a feeling of job security. Often, salaries are equated with higher paying jobs and benefits, although this isn’t always the case. There are many advantages to earning a salary, but there are also disadvantages. At the same time, there are many advantages to being paid hourly, but in some cases the negatives outweigh the positives. Usually when you are given a job, you don’t have a choice about whether or not you will be paid by the hour or paid a salary, but it’s important not to overlook jobs that do pay hourly. Sometimes getting paid hourly is actually ideal. If you work part-time, hourly pay can often be just fine, but it can also be ideal in other situations as well, particularly if you are getting paid a lot each hour. There are benefits and negatives to both salaried and hourly jobs.
Often hourly jobs are associated with minimum wage jobs, but there are many hourly jobs that require more experience and education. Contractors often get paid by the hour, and if they are very skilled in their profession, they can make a lot of money. Some contractors work through a different company, and they have a staffing specialist or other professional who helps them find work. Other contractors are self-employed, and offer their services via their own contacts or marketing. Contractors are not the only ones who can make a lot by working hourly; what really matters is how much you can make hourly versus what you would make doing the same work but receiving a salary. If you only work a few hours per week, then working hourly can be a good fit for you.
If you need a very set schedule, hourly work can be ideal if you work full-time. On the other hand, if you work only part-time hours, you may face a changing schedule. But if you do work full-time and you are hourly, you will probably have a set schedule, or at least, you shouldn’t often have to stay late unexpectedly. If you have children, or you have a second job, knowing exactly how many hours you will work each week, and when, can be helpful. If you do have to work overtime, you can expect to get paid extra for it. According to NOLO, the overtime premium is usually 50% of the employee’s normal pay, so hourly employees often earn an additional 50% during their overtime hours. Although some full-time salaried workers are paid for working overtime, hourly employees can expect overtime pay whenever hours are required, whereas salaried employees often have to put the extra work in without getting paid for it. For many salaried employees, the expected extra work is built into their salary.
If you can spare the time, and you take on a job that requires regular overtime, you can easily make extra money. Many hourly positions also pay double or time and a half for holiday work, which is another bonus for hourly employees. Some people take on hourly jobs as second jobs, in which case working on holidays can be very beneficial.
If you work full-time, regardless of whether you are paid a salary or paid by the hour, you will probably receive some benefits. One of the biggest negatives of being paid hourly is the fact that some hourly jobs don’t offer benefits, but if you are taking on an hourly job for extra income, and you are comfortable working less hours, then this won’t be such a problem. It can be an issue for hourly employees who want full-time hours and benefits, but those hours are not available. Much of this issue depends on the circumstances of the job itself; an hourly job can be full-time and pay well, but if your only choice is part-time work, then that particular hourly position may not work for you (even if it does pay well.)
Another problem with being paid hourly is that sometimes your paychecks won’t be consistent. Although there are many full-time hourly positions with a set forty-hour per week schedule, if you don’t have that kind of job, it can be difficult to set a budget. Some hourly jobs depend on the season or the demand, and those jobs can be difficult to rely on for a primary income. Of course, another issue is whether or not you can survive on the hourly income. Many hourly jobs pay as well or more than salaried jobs, but if your job doesn’t pay enough, then looking for a salaried job might be necessary. Of course, there are also pros and cons to salaried jobs. Although you might have a more consistent paycheck, you also might have to work late (or at home) more often.
According to 10TopTenReviews, from an employer’s standpoint, there are many advantages to having hourly employees, but there are also negatives. Having hourly employees allows employers to have flexibility with schedules (especially if the employees are part-time), but this uncertainty can also harm employers because they may have to pay overtime.
Sometimes an hourly position can be a great fit for an employee, particularly if they can make more money that way, or they don’t want to have to work overtime very often. Having a salary also has many positive aspects, including the fact that salaried employees can usually expect benefits, and sometimes, more job security. Which pay is better depends on the situation, and both employees and employers can benefit or be negatively impacted from either type of pay.
Want more great content like this? Sign up here to receive the best of Cheat Sheet delivered daily. No spam; just tailored content straight to your inbox.