Two of the most common types of compensation are salaries and hourly pay. A salary is a specific amount of compensation regardless of the number of hours worked. Hourly pay is the rate paid per hour of work.

Salaried workers typically have access to benefits, like sick days, and hourly workers do not. And whereas salaried employees are not eligible for overtime pay, employees who are paid by the hour are eligible for overtime pay equal to their base wage plus 50%. 

Salary

A salary is a fixed wage. It's often cited on an annual basis and paid biweekly. When you earn a salary, your paycheck is for the same amount each time it arrives.

An employee generally has to earn at least $684 per week or $35,568 per year to be paid on a salary basis, and they must perform exempt duties. (Tasks that require discretion and independent judgment at least 50% of the time to be considered exempt. You’re probably exempt if you take on managerial duties.)

In addition, a salary typically comes with benefits, such as 🌄healthcare coverage, paid vacation, and sick days.

An annual wage is a term of your employment. It's how much you'll receive for as long as you hold the same job or until the terms are renegotiated. It's a type of 澳洲幸运5官方开奖结果体彩网:implicit cost for your employer.

There can ♐be a downside to this type of compensation. If you receive a salary, you have specific goals, responsibilities, and/or tasks that must be met or completed, even if that means working longer hours and weekends without any additional compensation.

Working additional hours without extra pay may make it more difficult to separate work and personal time and achieve a 澳洲幸运5官方开奖结果体彩网:work/life balance.

Hourly Pay

If you're an hourly employee, you're paid for all the hours you work. Your employer must pay you more if they want more of your time. Legal overtime is time and a half and some employers may pay double time for holidays. Overtime hours and pay are normally part of an employment contract. But keep in m🧸ind that allowing overtime is at the discretion of the employer.

Working hourly means you could bring home more than if you earned the same official pay on a salaried basis if you’re in a well-compensated field with lots of available overtime.

There’s also an effect on lifestyle. Hourl🌳y employees might find it easier to separate home and work. They can concentrate on family, hobbies, or a second job when their work is over for the day.

However, being paid hourly also may make you more vulnerable. Hourly employees often feel the impact first when laws change or their company goes through tough times. It’s easier for an employer to knock off some of your hours until business improves than it is to eliminate an entire salaried position. Hourly employees protected by a union may be protected against some of ✱these risks🐈, however.

There also are possible effects on eligibility for healthcare coverage. The 澳洲幸运5官方开奖结果体彩网:Affordable Care Act (ACA) requires businesses with 50 or more employees to provide healthcare to full-time employees, who are defined as people working 30 or more hours. Some businesses keep hourly employees to fewer than 30 hours to avoid this mandate.

The Bottom Line

There are both pros and cons to being an hourly employee, and the same can be said of salaried employees. But salaried employees enjoy more benefits for the most part, such as paid vacation and sick days, 澳洲幸运5官方开奖结果体彩网:retirement accounts, and other employer-sponsored benefits. Hourly workers don't usually receive compensation in the form of paid leave by the companies who hire them and they may be responsible for 澳洲幸运5官方开奖结果体彩网:their own healthcare. But hourly employees enjoy more autonomy and may e༺ven be able to set their own hours.