If you’re a job seeker, you may be seeing vacancy ads that either describe the work as a salary job or an hourly one. You may be wondering what the differences are between those two and which one you should pursue.
With the recent surge in freelance jobs and the trend among employers toward flexible work setups, it’s understandable if you’re not familiar with the term “salary jobs” and what it means to you as a potential employee.
This article will talk about what salary jobs are and how they differ from hourly work. It will also discuss the advantages and disadvantages of being a salaried worker and the responsibilities that come with being salaried. To know more, continue reading below.
- Understanding the Concept of a Salary
- Differences Between Salaried Workers and Hourly Workers
- Advantages Offered by Salary Jobs
- Typical Jobs that Provide a Salary
- Tips on Calculating Pay for Salaried Workers
- A Wide Range of Benefits Available for Salaried Workers
Understanding the Concept of a Salary
In order to understand what salary jobs are, it’s important to first discuss what salary means. Salary refers to the fixed amount of money an employer has agreed to pay its employees in exchange for their services.
It is often expressed as the total sum an employee receives annually, but regular payment may vary from company to company, with people receiving their pay on a weekly, biweekly, or monthly basis.
For example, if your annual salary is $60,000, then you’ll receive $5,000 monthly before taxes. This is called gross salary, while the amount you get after taxes is called net pay.
How Salary Is Determined
How much salary you get depends on the kind of work you do, the industry standards, and your experience level. It may also differ depending on your geographic location and its wage laws.
Most large firms have a predetermined salary range for each position in their structure, and this is primarily determined based on the industry averages. Salaries are also affected by educational attainment.
Aside from these internal factors, some salary ranges are affected by supply and demand. This means that shortages in an area of expertise typically push the salary offers upwards while the oversupply of talent lowers it.
Differences Between Salaried Workers and Hourly Workers
Unlike salaried employees who receive a fixed amount of money regardless of the number of hours they work in a month, hourly workers are only paid for the actual hours they rendered their services.
Because of this, hourly employees need to keep a timesheet to monitor their work hours. Also, by being paid hourly, they’re entitled to pay for overtime hours worked and can even receive double time for holidays.
On the flip side of this, salaried workers may sometimes work beyond their schedule without getting paid extra.
This is because most of them are considered exempt employees who are not entitled to overtime pay.
Exempt vs Non-Exempt Employees
Under the Fair Labor Standards Act (FLSA), employers must pay at least a minimum wage for up to 40 hours of work in a week and overtime pay beyond that unless an employee is considered exempt.
To be categorized as an exempt employee, you must be a salaried worker, earn beyond the standard salary level, and be performing administrative, professional, or executive duties at work.
Non-exempt employees receive at least the federal minimum wage of $7.25 per hour in regular time and at least time and a half for work rendered beyond the standard 40 hours weekly as overtime pay.
Advantages Offered by Salary Jobs
There are various reasons why having a salary job could be better than hourly work.
One of these is getting a consistent amount of income, meaning you have a more predictable pay which makes it easier to budget your expenses each month. This is something especially important for employees with families who rely on a steady income.
Full-time employees who receive a salary are more likely to receive more employment benefits, including paid sick leave and vacation time. They don’t have to worry about losing income when they get sick or go on holiday.
In general, salaried positions come with more responsibilities, so there are more opportunities for career advancement. Management roles are typically salaried jobs and are required to be full-time.
Disadvantages of Being a Salaried Employee
Aside from the possibility of doing overtime work without extra pay, salaried employees also have virtually no control over their work schedule so it becomes more challenging to establish a work-life balance.
Because they have more responsibilities, salaried employees tend to bring work home, be contacted or contact people beyond business hours, and even stay late at the office to finish work.
These, in turn, restrict their ability to look for additional income sources, such as an additional job or establishing their own businesses.
Typical Jobs that Provide a Salary
Typically, salary jobs are not only those that have more responsibilities, but they also require more qualifications and skills. Salaried work exists in various industries, sectors, and fields of expertise.
Most management roles with supervisory duties are salary jobs. That’s why even in retail or fast food, where most workers are paid by the hour, managers are still paid a salary and work full-time for the company.
Professionals, such as teachers, engineers, accountants, lawyers, financial analysts, and researchers, are often given salaried positions within their respective organizations.
Searching and Applying for Salary Jobs
Because there are no specific industries or websites that strictly focus on salary jobs, you can search for them in traditional job ads or via job boards and apps.
Make sure to use search filters on these sites and apps to look for category filters for salaried work. You may also search by geographic area or expertise and then apply the filter.
Applying for salary jobs is the same process as applying for any other job. You can apply using both on-site or online applications, depending on the location of the jobs you want to apply for.
Tips on Calculating Pay for Salaried Workers
While salaried employees technically receive the same amount of money annually, there may be instances where changes could occur if you qualify for overtime or get a raise.
The most basic step for calculating your pay is to know your gross salary, the amount of which you basically learn about when you get hired. You should also take note of your company’s payroll schedule.
If you qualify for overtime, add its amount to your expected pay. The overtime rate is normally one and a half times your basic pay rate. Also, include any bonuses that you receive in your calculations.
Useful Advice for Salary Negotiations
Because of the fixed pay salary workers receive, the salary negotiations stage of accepting a job offer with a company is very crucial.
First, you may leverage the industry average wage for your position. Research about your job title and then decide on a range that you want to present to the employer when negotiating your salary.
Next, you may ask questions about the work and even inquire what you need to do to get the salary range you requested. Using a polite yet firm tone, you may also negotiate benefits during salary negotiations.
A Wide Range of Benefits Available for Salaried Workers
Speaking of benefits, one of the advantages mentioned above for salaried workers is the additional employee benefits that they receive from the employers.
Beyond the sick leave and paid vacation discussed earlier, salaried employees are also entitled to health care benefits, such as health insurance. Employers also match their 401(k) contributions for their retirement.
Not only do they not lose income when having children, but they can also receive perks like maternity and paternity leaves and free childcare services. These benefits are dependant on a company-by-company basis.
Other Notable Benefits for Salaried Employees
To attract more talent, some employers even give their workers non-traditional benefits, such as gym memberships, free smartphones, and adoption support services.
If you’re a salaried worker, your company could even help you with your goal of climbing the corporate ladder by sponsoring further education and training and providing flexible work schedules.
The Bottom Line
Salary jobs have a lot to offer to job seekers and depending on your career goals, and you may want to consider becoming a salaried worker rather than an hourly employee. Career stability, income security, and additional employee benefits are compelling enough reasons to get a salary job.
However, at the end of the day, being happy at work and pursuing your passion as a professional are things that you must also consider beyond the income setup. As Confucius once said, “Choose a job you love, and you will never have to work a day in your life.”