Determining Whether to Pay an Employee Hourly or With a Salary

May 30th, 2012

It is quite common in the construction and cleaning industries to pay employees on an hourly basis. However, when you’re just starting your business, or hiring new employees, you may choose to explore your options before coming to this decision. So, what exactly do you need to look at to determine if you should pay an employee on an hourly basis or with a salary?

  • The consistency of the work and hours – in many industries and positions, it is typical for an individual to work 9am to 5pm on a regular basis. In other roles and industries, there may not always be work available; or at times, employees may be needed to work longer hours. In these instances, it is easier to pay employees by the hour that way they are compensated for the work they do without any additional complication. A time and attendance system can help you keep track of the times that they work.
  • Outside responsibilities of employees – if your employee has a job that requires them to do some tasks when they are away from work, then a salary is the only way to ensure that they are appropriately compensated.
  • The job classification – if the employee is in an executive or management position, then it is customary to compensate them by paying them a salary.

Are you an entrepreneur, or do you work in HR? If so, we’d like to know more about how your business decides who to pay hourly and who to put on salary!


Peter Morrissey has been working with employee time and attendance for more than 15 years, Peter has supplied more than 3000 customers around the world with employee time management systems. He has seen the good, the bad and the ugly. Peter bought the JobClock system into Australia in 2008 to fill a void not being covered at the time. As cloud technology has come along the JobClock system not only services construction but many more industries hungry for employee labour costing information.

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