Salary is the amount paid by a company to its employee in return for work. The amount is defined according to the employment contract established between the two parties. Salary can be set per month or hour of work. In both cases there could be pros and cons. Which ?
Monthly payment allows an employee to receive the same amount each month. The monthly remuneration is invariable, regardless of the number of days in the month, or the hours worked. Thus, the 35 hours per week correspond to a fixed monthly duration of 151,666 hours.
The amount of salary is set freely between the employer and the employee during the job interview, i.e. before the new employee takes up the position. The monthly salary includes:
Generally speaking, salary is expressed in gross. Indeed, both parties agree on a gross salary when establishing the employment contract. The net salary therefore corresponds to the sum after the deduction of social security contributions.
The monthly salary is thus paid once a month. The amount remains fixed even when the quantity of work is temporarily reduced. Therefore, employees who receive a monthly salary have a permanent sense of security.
Hourly pay is compensation on an hourly basis. In fact, employees paid by the hour receive a fixed salary for each hour worked. Not to be confused with hourly rate, which refers to the amount a person receives for one hour of work.
In practice, you are paid for all the hours you work. This may also include overtime. Furthermore, your employer can pay you double for public holidays if the contract to be carried out covers your work. Also, you have the possibility of considerably increasing your earnings by choosing to work overtime at the request of your employer.
Hourly remuneration concerns more self-employed workers, including workers who work on a piece-rate basis or freelancers. As a result, they can be used depending on the volume of orders or the amount of work at the time.
The monthly salary corresponds only to financial compensation for the work performed. In this case, you will still receive a fixed salary. In return, you must assume your responsibilities and complete all necessary tasks.
Salaried employees are therefore paid to do their job, regardless of the number of hours or days required. Indeed, this involves working overtime or occasionally working on certain public holidays or weekends.
Otherwise, hourly remuneration refers to all sums linked to the performance of the work. For any hours worked outside of the 40 hours per week, you will be paid time and a half. You can therefore earn double your normal hourly rate if you work during public holidays, weekends, or vacations.
If you are hourly employees, you should always set aside money to prevent certain incidents that could prevent you from working. In some companies, hourly employees may not have the same access to insurance plans and retirement systems that monthly employees enjoy.
If you are paid with a monthly salary, you are guaranteed to earn a regular amount without fluctuation. You will therefore have a feeling of security, regardless of the number of days worked. Furthermore, variable remuneration can greatly help you earn more depending on your results. This includes commissions, bonuses and various bonuses.
As an employee, you know in advance the amount you will receive each month. In addition, payment is guaranteed. If you lose your job, you will still be covered by unemployment insurance.
The main disadvantage, however, is that you are not eligible for overtime pay. Indeed, you must fulfill your responsibilities even if it means working longer hours.
Furthermore, you must demonstrate loyalty to your employer. Indeed, a monthly employee cannot exercise other professions unless the employer gives his consent.
The main advantage of hourly pay is that you earn a specific amount of money for each hour you work. If your employer asks you to spend more time on your job, they are required to pay you more.
In general, hourly workers are better at managing their personal and professional lives. Indeed, once the work day is over, you can concentrate on your family and your daily routine. You can even take up another job.
On the other hand, even if overtime is paid, some companies require their employees to respect 40 hours of work per week. Additionally, you may be subject to different paychecks if your hours are reduced.
In some cases, employees with hourly pay may feel less secure about their jobs. Your financial visibility remains limited, because it depends on the number of hours worked.
Generally speaking, choosing between hourly pay and monthly salary means giving up security for freedom, and vice versa. If you are paid by the hour, you have more freedom and autonomy in carrying out your tasks. Furthermore, you can cover other contracts when your working hours are over.
From a financial perspective, a monthly wage earner can comfortably earn the same amount every month, regardless of the number of days worked. On the other hand, if you are paid by the hour worked, your financial future is uncertain, because it depends on the number of contracts you complete.
In the case of monthly salary, employees are entitled to salary benefits for vacations, public holidays, short leaves as well as during medical examinations or moves. This is not the case for those with hourly pay where only the time actually worked is paid.
Regardless, if you have to choose between the two options, take the time to study your needs, your priorities, your availability, as well as your objectives. If you want more flexibility in carrying out your tasks, hourly pay will be perfect for you. On the other hand, if your financial security comes first, you can opt for the monthly salary.