Paycheck Breakdown: Are salaried positions better than hourly positions?

By Kat


On average, Americans spend one-third of their lives working, which is why job satisfaction is always such a hot topic. No one should spend 30 years unhappy, working a dead-end job. Work and play don’t have to be synonymous, but finding a career where you feel your time is well-spent is a major key to leading a fulfilling life.

Of all the factors that influence job satisfaction, pay is by far the biggest. A recent survey on compensation trends conducted by Callidus Cloud revealed that 55% of people feel their compensation gave them satisfaction in their job, which was 30% higher than other reasons such as job retention and productivity. Not everyone is paid in the same way though, so let’s dive a little deeper and look at the differences between the most popular ways employee are paid.


There’s often a stigma associated with hourly positions. They’re less appealing to many, but why? It’s the industries and positions most associated with them that give hourly pay a bad rap. Retail, restaurants, and customer service jobs all come to mind and with these industries come high turnover and job insecurity. They’re also less likely to have a set work schedule when compared to salaried positions, further adding to the unpredictability.

It’s not all bad news though. Hourly positions certainly have their upsides. Holiday and overtime pay, for example, often allows employees to make 1.5 times their regular hourly rate. There’s also satisfaction in getting a definitive amount for each hour you work. While salary pay is typically based on a 40 hour work week, many people will have to work more than that, which when compared to be hourly pay may result in less of a wage gap than you may think. To drive this point home, someone making $50,000 a year that works 60 hours a week will only be making $16 per hour.


On the flip side, a salaried position likely comes with a bit more stability.  You’ll know what to expect on each paycheck which can help when it comes to financial planning. These jobs are also more likely to come with better benefits such as health insurance, 401k packages, and PTO. Workers often have more growth potential that could lead to promotions and pay increases.

Of workers surveyed, 62% held an hourly job while 34% were paid a salary. This is an indication that salary positions are a bit harder to come by, revealing a downside to these jobs. More competition also means an increase in job requirements which could include secondary degrees and certifications that are often costly.

Another interesting aspect of this study was the generational breakdown for hourly positions. You may guess that millennials are less likely to work salaried jobs and you’d be right, but the margins are smaller than you think. Only 5% more come from Gen X and another 3% are Baby Boomers. This shows that hourly positions are held by members of every generation and choosing which type of pay works best for you is at your discretion.


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