Salaried employees are paid a set amount of money every pay period, usually every two weeks or monthly, while hourly employees are paid based on the number of hours that they work during a pay period. While salaried employees are technically full time employees, meaning 40 hours per week, they often work more hours than that.
Most hourly employees are paid 1.5 times their normal hourly wage for any hours that they work beyond 40 hours in a week. This is called overtime and is one of the major benefits of being paid by the hour. If a salaried employee works more than 40 hours a week, he is usually not paid more for that week as this is considered just part of the job. In some workplaces, overtime is calculate by the day, and an employee is paid 1.5 times his wages for any hours worked beyond eight hours in a single day.
Salaried employees often have more flexible work days than hourly employees. Because employers are paying hourly employees by the hour, they are more sensitive about how those hours are being used. If the employee wants to go out to run an errand for half an hour in the middle of a work day, the boss, understandably, doesn't want to pay the employee for that time. If the worker is on salary, it makes little difference because the employee is paid the same for the entire pay period. Employers will often tolerate a salaried worker coming in late or leaving early as long as she gets the job done.
While both hourly and salaried workers receive benefits in many workplaces, salaried workers tend to receive more extensive and larger ones. Most executive employees are paid by salary rather than by the hour. Their total income may be inflated to a size substantially larger than their salary through stock options, year-end bonuses and perks, such as restaurant tabs, car and hotel usage and club and organization memberships. These benefits are part of the reason that many salaried employees are willing to work longer hours than hourly workers.
The paycheck that an hourly worker receives every week, two weeks or per month is dependent on how many hours he worked during that pay period. A salaried worker, on the other hand, will receive the same amount every pay period. Some people appreciate this stability and predictability because it makes household budgeting easier as spending patterns can be made in advance.