Home Blog Salary vs. Hourly Pay Stubs – What’s The Difference?

Salary vs. Hourly Pay Stubs – What’s The Difference?

Employees around the globe are paid either a salary or an hourly wage; however, payment for salaried employees and hourly wage employees differs a lot. Employers generate paystubs differently for salaried and hourly wage employees; by doing so, they ensure compliance with federal and state laws. It doesn’t matter whether it’s a salary or hourly employee; creating paystubs has become easier with the online free paystub creator these days.

This article elaborates on the difference between salary and hourly pay stubs in detail. But, before diving deep into the core topic, let’s brush with some basics on salaried and hourly employees.

Who are salaried employees? How does the salary paystub work?

A salaried employee gets fixed working hours and gets fixed compensation as a salary for their work. They receive a set amount of money as a salary for their work regardless of the quality and quantity of the work.  

The salary paystubs are generated according to the minimum wages set by the FLSA (The Fair Labor Standards Act). The federal and state governments set the minimum wages for employees.

Who are Hourly employees? How does hourly paystub work?

An hourly employee gets paid for the hours of work completed. Hourly employee paystubs will cover overtime wages if a worker works more than 40 hours a week.

Unlike the salaried paystubs, hourly paystubs fluctuated from pay period to pay period. The employer’s job is to track down the number of hours employees worked, including the overtime period.

Difference between salaried and hourly paystub

Both salaried and hourly paystubs have their own set of advantages and disadvantages. As an employer, you should be very cautious about designating your workers as salaried or hourly wage employees according to the criteria.

  • Benefits Packages: Salaried paystubs should cover all the benefits packages provided by the company, such as incentives, healthcare coverage, retirement plans, and so on. However, for hourly pay stubs, there are no such extra packages; they get paid for the number of hours they work.
  • Overtime rate: When compared with salaried paystubs, employees in hourly paystubs get higher gross pay and take-home pay when they work overtime which is more than 40 hours per week.
  • Working hours: For salary paystubs, work hours would only change if there was a change in the work shift. However, when it comes to hourly pay stubs, employees will have flexible working hours, and the total working hours will change weekly. So while creating paystubs, it needs to be noted carefully.
  • Payroll Processing: Processing payroll for salaried paystubs is much easier than hourly paystubs. Because for salaried paystubs, worker’s compensation stays constant. However, for hour paystubs, workers’ compensation differs according to overtime eligibility and work-hour flexibility.

Here are a few criteria employers should be aware of before generating salary and hourly pay stubs.

Criteria of salary pay stubs:

  • As per the standards set by the Fair Labor Standards Act (FLSA), salaried paystubs should have a constant minimum wage.
  • For salaried paystubs, employers need to make sure the work descriptions of the workers meet all the terms as per the agreements.

Criteria of hourly pay stubs:

  • For hourly paystubs, employers need to track the daily working hours of the hourly wage workers.
  • Employers need to ensure hourly paystubs of the hourly wage workers include the overtime pay rate when the working hours go beyond 40 hours per week.

Bottom Line

Having the right mix of salaried and hourly wage employees will significantly impact your company’s revenues and growth. The choice of picking employees depends upon the expectation and market norms.

However, managing salary and hourly paystub would be easy with the online free paystub creator. Engaging with a reliable free check stub maker with a calculator will ensure you create paystubs without mistakes and fully comply with federal and state laws.

Don’t wait to check your Pay Stub!

Get ready to take control of your finances and stay informed with our easy-to-use paystub generator.