A salaried employee is a worker who is paid a set amount of money regardless of how many hours they work.
In the United States, salaried employees are always paid for 40 hours of work per week, which is the standard full-time work week. If they work fewer than 40 hours in one week, they still get paid the same amount of money.
How are salaried employees paid?
This type of employee receives an annual salary, which is typically negotiated during the hiring process. The annual salary is divided by the number of paychecks the employee receives in one calendar year. Employees who are paid on a salary basis can receive weekly, bi-weekly, semi-monthly, or monthly payments.
For example, say an employee has an annual salary of $85,000. Using our Take Home Pay Calculator, we can determine that the employee would receive $7,083.33 per month or $3,541.67 semi-monthly.
A country’s federal laws will dictate when employers must pay their employees. The U.S. Department of Labor has different payday requirements for each state in the United States.
Salaried employees vs. hourly employees
Working a salaried job vs. an hourly job are two very different employee experiences, with variations in how the employee is paid, the benefits they qualify for, and how they track their work.
Pay structure
The biggest difference between salaried and hourly employees is how they’re compensated for their work. When salaried employees are offered a job, they’ll be offered an annual salary, such as $85,000. Hourly workers will receive an hourly pay rate, such as $40 per hour.
Salaried employees have predetermined pay that they receive on a consistent basis. In contrast, hourly employees are paid based on the number of hours they work in one pay period, which can fluctuate week to week.
Exempt vs. non-exempt status
Salaried workers in the United States often qualify for exempt status. Exempt employees aren’t eligible for overtime pay or minimum wage in their state, as per the Fair Labor Standards Act (FLSA).
On the other hand, hourly employees are often non-exempt employees, which means they’re eligible for overtime pay (such as time and a half) when they work extra hours. They’re also entitled to the federal minimum wage.
Timesheets
Salaried employees don’t typically have to complete timesheets, while many hourly workers do. Since hourly workers are paid per hour, their managers must know the exact number of hours worked. But since salary workers are paid a set amount, regardless of their hours worked, they aren’t usually required to keep timesheets.
Some employers may still require salaried workers to complete timesheets in some capacity, depending on their work. For example, salaried employees working at a marketing agency may need to track their hours for a client project so their employer can invoice the client accordingly.
Work-life balance
Whether you’re a salaried or hourly worker, your work-life balance will depend on your job and your employer’s expectations.
While hourly workers can be hired on a full-time or part-time basis, they tend to have inconsistent schedules that include working evenings and weekends. But since many hourly wage workers are shift workers, they have clean stop and start times for their workdays which helps them maintain a work-life balance.
Salaried employees are almost always full-time employees. While some work late during the week or on weekends, others may maintain a standard nine-to-five schedule that allows them to separate work and home life in a healthy way.
Pros and cons of being a salaried employee
Holding a salaried position comes with many benefits, but it may not be the right fit for every person, depending on their career goals, availability, and personal needs.
Pros
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A consistent, fixed amount of pay that provides stronger financial security and makes financial planning easier
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Access to employee benefits, such as healthcare coverage, retirement contributions, and paid time off
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Salaried employees have access to ample career growth opportunities in professional environments, which often come with higher compensation compared to hourly jobs
Cons
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Salaried employees don’t typically qualify for overtime pay or minimum wage
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Many people in salaried positions work long hours, as they’re expected to complete their work regardless of how long it takes
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Hiring salaried employees costs employers more money, as they have to cover expenses such as benefits and payroll taxes
Examples of salaried jobs
Salaried employees hold a variety of job titles and job duties across most industries. Many salaried positions belong to managers, supervisors, and knowledge workers. Examples of salaried positions include account executives, full-time teachers, marketing coordinators, civil engineers, and more.
