Ages 10+ · Money · Earning and jobs
Salary or hourly pay?
A salary • The same amount each month • Tess: 80 coins a month • Easy to plan Hourly pay • Follows the hours worked • Sam: 4 coins an hour • Goes up and down Two ways of being paid. The big idea A salary is the same each month. Hourly pay follows the hours you work.
How it works Tess teaches at the school and gets a salary: the same amount every month, 80 coins, whatever the month brings.
Sam builds sheds and is paid by the hour, 4 coins for each hour. More hours means more coins, and fewer hours means fewer coins.
Over two months each earned 160 coins: the same total in a different shape. Tess's pay was steady, and Sam's went up and down.
Neither way of being paid is better. What matters is knowing which kind you have, and planning to match.
Pay for two months 0 20 40 60 80 100 80 Tess month 1 80 Tess month 2 100 Sam month 1 60 Sam month 2 coins Pay for two months. Tess's bars match, and Sam's go up and down. Busy month: paid 100 Set 20 aside: 80 to spend Quiet month: paid 60 Add the 20 back: 80 Sam's trick for a steady pay. Example 1: Hourly pay, a busy month Sam works 25 hours at 4 coins an hour. Hours times the rate: 25 × 4 = 100. Sam is paid 100 coins, more than Tess's 80. Example 2: Hourly pay, a quiet month Sam works 15 hours at 4 coins an hour. 15 × 4 = 60. Sam is paid 60 coins, less than Tess's 80. Example 3: Adding up two months Tess: 80 + 80 = 160 coins. Sam: 100 + 60 = 160 coins. The same total, but Tess's pay is steady and Sam's goes up and down. Example 4: Sam's trick In the busy month Sam sets 20 aside: 100 − 20 = 80 coins to spend. In the quiet month he adds it back: 60 + 20 = 80 coins to spend. So Sam has 80 coins both months, steady like a salary. Words to know salary The same pay every month, whatever the month brings. hourly pay Pay for each hour worked, so more hours means more coins. rate The coins paid for one hour: Sam's is 4. plan Decide ahead how your coins will be used. Watch out A salary does not follow the hours. Tess still gets 80 coins in a short month. Hourly pay changes because of the hours, not the rate. Sam earns 4 coins an hour every month. A busy month's pay is not every month's pay. Plan with the quiet months too. Neither way is better. They are just different shapes of pay. Try it Sam works 15 hours at 4 coins an hour. What is he paid? Which pay is the same every month, a salary or hourly pay? Sam works 20 hours at 4 coins an hour. What is he paid? In month two Tess gets 80 coins and Sam gets 60. Who is paid more? Answers: 1. 60 coins · 2. A salary · 3. 80 coins · 4. Tess
Try at home With a grown-up, talk about how people you know are paid. Is it a salary or by the hour, and how do they plan?
For grown-ups If your family is happy to, talk about whether the grown-ups in your life are paid a salary or by the hour, and how they plan around it. Keep it about how, not how much.