What’s the difference between salary and hourly wage?

It’s more than just arithmetics.

Monthly (or weekly) salary and hourly wage both get you the money you deserve (you can check it in Salary to Hourly calculator), but they are very much different in essence.

Both are like two roads that can lead you to the same place: The Paycheckville, but one is a highway and the other is a bumpy mountain road. The problem is, you cannot tell which one is which in your case.


You are guaranteed a certain amount of money every week or month (depending on your paycheck schedule). You don’t have to worry at the beginning of a month that you have to work for your money for a specified period of time. If you’re doing your job correctly, there’s nothing to worry about.

In short: with salary, you don’t have to clock in or keep a timesheet. Also, your employer tracks only your completed tasks.

That sense of security is sometimes more important than what you can earn.

Plus, in many cases, employers give you some benefits: vacations, additional insurances and the ability to take sick leave, go to a doctor without worrying that it might impact your paycheck.

But there are some problems with salary. Sometimes you have to stay overtime to get your job done. It’s just the nature of it. But in many cases, you don’t get any additional money from that.

And all that sense of security can be shadowed by the realization that you’re staying late and getting no extra reward for that.

Hourly wage

When you’re an hourly employee, you get a certain amount of money for every hour you spend in your job. You have to keep track of your hours worked, or your employer does it for you when you clock in.

In some cases, you’re not guaranteed 40 hours of work during the week. It’s a common policy in the UK, where so-called employees have to sign „zero-hour contracts” which are connected to on-call shifts jobs but during the financial crisis became popular among retailers and big restaurant chains.

Theoretically, hourly wage should give young employees (and among them: students) more flexibility in their job, but in many cases it gave more power over wage to employers. You’re only paid for the hours you’re scheduled to work, but if it’s just a couple of hours per week then that becomes a massive problem. Employees of McDonald’s in the UK even went on strike about that.

In the US, hourly employees get paid for overtime work, and in some cases, their overtime wage is higher than standard one which gives them the incentive to work more extended hours.

So what’s the difference?

Essentially, it's about emotions. If you’re on salary, then you know when to expect money and how big your paycheck will be. You can plan your expenses better, and there are not many things that can surprise you.

When you’re an hourly employee, if you happen to get sick, then it becomes much big of a problem then when you’re on salary. But, on the other hand, you know that you worked hard for your money and stayed in your job for quite an amount of hours.

It all depends on how you want to feel about your job. And, of course, the money. You can check your paycheck on this Salary to Hourly calculator.

Salary to Hourly - Paycheck Calculator