April 12, 2021

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Salaries and Wages: Which one is better?

Salaries and Wages: Which one is better?


Generally speaking, there are two ways employers can pay a person for work. Number one is hourly pay. Alternatively, employees can be paid a salary. Many individuals consider the salaries and wages to be interchangeable. However, there is a slight difference in the meaning of these two terms and each has its pros and cons.

The term wages is best associated with pay that the employer calculates based on how many hours the person worked multiplied by an hourly rate of pay. Wages are basic wages and all other payments in cash payable to employees for work done in respect of their contract. Salary, on the other hand, is best associated with compensation quoted on an annual basis.

In both cases, most employers pay their workers on a bi-weekly basis. So, you can expect to get a paycheck every two weeks or twice a month. Let’s look at salaries and wages a little closer.


If your employer pays you a salary, it means that you are paid a fixed annual rate. Say if you make $50,000 a year, you can expect to make close to $2,100 every two weeks. Let’s look at the advantages of being paid a salary.

  • Easy to plan your personal budget because you get the same paycheck every time.
  • You can usually take longer breaks as long as you get your work done.
  • You would generally get more perks, such as vacation pay.
  • Salary paid employees also usually make more than hourly-paid workers and have a higher status in the company.

Salaries and Wages: Which one is better?

On the downside, there tends to be less of a separation between your career and your personal life. This is the biggest disadvantage because you need to work for as long as you have to, whether that means going over your time or not, and still getting the same paycheck every two weeks (except if you are making less than $23K a year).


Hourly paid job is where you are paid a fixed rate for every hour that you work. For example, if you make $12 an hour and work for 8 hours, you will make $96. There are several advantages of being paid wages. Hourly employees have an opportunity to work overtime. If you work past the time you are scheduled to work, you are legally required to be paid overtime. So, the accounting department will calculate your pay as at least a time and a half.

There is also a lot less responsibility when it comes to hourly pay. If your shift is over, you can usually just leave even if there is still some work on completed whereas a salary paid worker would have to finish his work.

Salaries and Wages: Which one is better?

Let’s now look at the disadvantages of wages. The first con of being paid hourly is that when the company that you work for is struggling, it is much easier for the managers to cut hours for an hourly paid employee than to cut the pay for a salary paid employee. If your day is cut short, you will be paid only for the hours that you worked. Some employers may also keep your weekly hours under 30, so they can be legally exempt from covering your health care.

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Author: Charles Lutwidge

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