Salary Vs Hourly Employees: Difference And Similarities

Salary Vs hourly Employees
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Are you looking to know more about salary employees and hourly employees?

Employees are classified based on the type of work they do and how they are paid. Most times, when being interviewed for a job, how you would be paid would be predetermined by the employer. You can choose to accept the job or not, but you rarely get to decide how you would be compensated.

However, the remuneration you are being offered plays a major role as one of the deciding factors on if you should accept the job or not. The same way you contemplate and decide on your responsibilities of the job, your role and company culture, you should also contemplate on how you want to be paid before accepting any job position. 

What does it mean to be a salary or hourly employee?

Salaries are usually for full-time work, permanent, and with a fixed working pattern. Being a salaried employee simply means that your payment is fixed and would be paid at the end or beginning of every month, week, biweekly or semi-monthly. With a salary, each time your paycheck arrives on your payday, it is usually the same amount, however subject to increment, depending on the contract between you and the employer.

However, even though salaries come at an advantage because you receive a fixed rate of pay, you may also have specific responsibilities and tasks that must be met or completed in your place of work, even if it would entail long hours and weekends. You would also get additional perks such as vacations.

If you are a salaried employee, you tend to enjoy more benefits, such as paid vacation and sick days, retirement accounts, and other employer-sponsored benefits.

Hourly pay is more common, retail, hospitality, and contract-based work where your hours are flexible week to week.

Being an hourly employee means you earn for all the hours you work. If an employer wants more of your time, they have to pay you more.

This just means that for every hour you work, you would get paid, based on the agreement between you and the employer.

In hourly employment, you get paid for lots of overtime. You could bring home more than if you earned the same official pay on a salaried basis, depending on the amount of hard work you put in.

If you are an hourly employee, you would find it easier to separate home and work. Once work is over for the day, you can concentrate on family, hobbies, and even a second job.

Hourly employees are often not guaranteed a set number of hours of work per week unless they are covered by a labor contract.

SEE ALSO: 20 Jobs that Pay $40 an Hour Until You’re Tired

Similarities between salary and hourly employees

The similarities between being a salary or hourly employee are the benefits which one would benefit from the work.

In both employments, you would enjoy:

  • A paycheck, whether it comes immediately or 30 days later, the feeling that you have money coming in at a particular time gladdens the heart. It gives a feeling of stability and security.
  • The feeling of identity. People you meet would always want to know what you do and you’re having a source of steady income would give you the morale to meet them and answer questions thrown at you.
  • The chance to meet new people. Having a job whether in a salaried or hourly form of employment gives you a chance to foster new relationships and friendships with people you would have not met. You will meet people with distinct personalities, backgrounds and skill sets that will add spice to your life in different ways.
  • Your job defines your sense of identity. When you work for a company and manage different projects and roles, you will learn more about yourself.
  • Health benefits of being employed. Once your job is not risky or life threatening, you would come to realize that the mere fact that you have a job is relieving. The thought that you are contributing to something bigger than yourself can make you feel happy and fulfilled with your life.
  • The joy of being independent is not reliant on financial independence. It relates to living life and decision making.
  • Have a happy retirement. Whether you earn hourly or on a salary basis, you would get to retire well with your savings or in some cases, employers have schemes which cover retirement benefits.

Differences between salary and hourly employees

Salary employees are usually not paid based on the hours they work; instead, they are paid the same amount each pay period, based on their total salary. An hourly worker, on the other hand, earns a set payment for each hour they work.

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Salary Pay: Pros and cons


  • For a salaried employee, you have a guaranteed weekly/monthly wage. This is such that there is a guaranteed paycheck with no fluctuations. Even if your company is closed on holidays, it has no effect on your paycheck.
  • Your overall compensation would generally be higher than those working on hourly basis.
  • As a salaried employee, you would get employer-sponsored benefits such as healthcare coverage, retirement contributions, etc.
  • Your salary also comes with a sense of security. The employer cannot just wake up one day and decide to terminate your employment. Your employment also has a high ranking in the society.
  • You would get additional perks like a more flexible schedule. You can decide to leave early or take the afternoon off to have lunch.
  • As part of the perks of being a salaried employee, you would have a more regular schedule. When you wake up in the morning, you already know your time of work and the time of dismissal.


  • For a salaried employee, there is no overtime pay. You may work after hours or extra hours without receiving the additional compensation that they would get had they been an hourly employee.
  • It will be difficult to separate work from personal time as you are required to be at constant contact with your office.
  • When you are a salaried worker, the company might be inclined to cut your salary during times of financial difficulty. This may lead you to be in a position where you are actually working more hours, but not receiving any more money to do so compared to hourly workers.

Hourly Pay: Pros and Cons


  • In an hourly form of employment, your pay would vary based on the hours you work.
  • You would have an overtime pay of time and a half for each hour worked after forty hours.
  • Even when the work is not done, you can leave it behind and still get paid for the hours you have worked.
  • Hourly employees have a better work-life balance than salaried employees. They do not take their work home with them because they would not be compensated once they leave their job site.
  • Hourly employees are generally not held responsible if anything goes wrong with the company.


  • You would also find it difficult to separate work from personal time. They generally have a fixed schedule.
  • You stand at a risk every day because there is no job security. Your employer can easily cut your hours when they choose to when the company is going through a tough time.
  • Benefits which salaried employees enjoy; hourly employees may not have the privilege of enjoying it.


There are advantages and disadvantages to the salary vs hourly form of employment. You just have to weigh your options and decide which is more convenient for you. When you have a family, working long hours and weekends would be less appealing. Salaried employees tend to have a more regular schedule than hourly employees. 

While some workers favor the security of a regular paycheck, others prefer knowing when they will clock out at the end of the day and delight in extra pay for working overtime hours.


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