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Is A Salary Worth It?

Updated on October 28, 2013


Many people work at a job that pays a salary. A salary is a predetermined amount that is agreed upon for annual compensation in exchange for your labor. I want to shed some light on this topic and determine if it is really worth it.

I know there is a social stigma that comes with having a salaried position. It seems to say you are accomplished, a career person, and may scream success. But what is it really?

If you are paid a salary, you know exactly how much to expect each paycheck, as it will not change. Some people see this as security. It is consistency, and there is comfort knowing you can budget and plan, and that each week regardless of what happens you will receive the same amount.

You know who else counts on this regularity and consistency in your wage? Your employer. Who is getting the better deal here? My vote is to the employer, big time!

EXAMPLE:

You are paid a salary of $50,000 a year. Now many of us have a busy time of year, so even though you are expected to work 40 hours a week, the busy weeks where you may put in 50, 60 hours or more a week, you are still paid the same amount. The benefit to the employer is they do not have over time to account for when you work more than your average 40 hours. Your employer gets extra labor and you are paid the same.

When you are paid a salary, you are not bound by the clock, but by the work. The job has to get done, if that means early mornings, late nights, skipping lunch or coming in on the weekend. You are done when the work is done, and you are not paid any more for your extra work.

Now, if you are paid hourly, the tables turn. I will use my work situation as an example. I am paid hourly. When I first started I asked my manager if there is work to get done if I should stay to finish it, or come in early. She replied that I should not, because as a corporation they are only allowed so much overtime per year, and they have to keep their expenses and overhead at a certain level. What does that mean for me the employee? It means that no matter how much or little work I have, I am in the office from 8-5 with an hour for lunch. I get paid the same for each hour of work, an even exchange. Funny how my paychecks are very consistent as well.

What does that mean for the employer? The employer has a certain amount of work to get done, but much like a salary, they have a set amount they have allotted to pay each employee. So they do not want to pay for more than what they have allotted for, which is the 8-5 with an hour lunch. Funny how it is the same as a salary, but without the unpaid overtime.

When the extra work needs to get done by a certain date at my job, it is the salaried workers who pick up the work and stay late to finish it, all with no extra payment. Where I get there at 8, take an hour lunch, and leave at 5, because they do not want to pay me time and a half.

If an employer is willing to pay you for working longer than your normal 8 hours, guess what, OVERTIME! That is time and a half. So your employer is paying you more to do the same work, not a bad deal right? You will not see that at a salaried position.

What does this mean?

Next time you are given a job opportunity that is paid on a salary, take a really close look. Make sure you are clear and on the same page with your employer about what is expected of you. Ask them if you may have to work late, come in early or work weekends. Then ask if it is worth it. Ask them how many hours you will work the average week. Figure out the hourly rate and ask if it’s worth it.

Do not get me wrong, I am sure there are advantages to being paid a salary, but when you break it down, I personally see it as a clever way a business pays their employees to keep their expenses low and consistent while making sure their work is completed.

For more great tips on personal finance, visit my blog, http://www.stewardology.com/blog/

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      ruth 19 months ago

      sounds like something good.

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