Why Americans mostly counting their salaries “per hour” or “per year”? Isn’t per month is more reliable?

31 comments

1. Not necessarily. There are a number of variables. For instance, length of pay period. Some people get paid weekly, every two weeks, on set days such as the 1st and 15th, etc. This can mean the amount of pay can vary a bit by month, but is a constant per hour or yearly amount.

2. I mean, what’s the difference? Just multiply or divide by 12 or 52 or whatever.

   Per year is probably better for people whose earnings fluctuate throughout the year

3. Paychecks most often come weekly or biweekly. Months have different lengths, so for someone paid weekly, some months you get 4 paychecks, some months 5. For hourly wages, that rate is how your pay is calculated- if you work more hours you get more money, if you take a day off you get less.

4. Yeah. It’s just a cultural thing. It’s just how we have come to think of salaries. It was odd to me when I came to Europe and also in Asia to be quoted salaries in months.

   I think the question is…on the reverse side. How come salaries are paid in monthly increments and not in two weeks? For sure it was a culture shock to be not only paid monthly but in some cases…on the tenth of the following month.

   There is really no way to answer my question either other than that’s just how it is done. I would prefer a mix of both to be fair. Salary mentioned in months plus a salary paid biweekly. 😂

5. I’m not convinced that your assumption is correct.

   When I think back, it seems like most of the people I ever talked with about pay, we talked about monthly salary or hourly wage.

   As I got older and started to land some higher paying jobs (I still remember my first ever “annual salary” gig), I still thought in terms of monthly paychecks.

6. We are paid either per hour (with variable hours worked) or a base salary which is divided per year into bi-weekly paychecks.

   An hourly employee will compute their expected salary and then compare to monthly bills. Salaried folks usually divide by 12 then when the two months roll around with 3 pay periods you feel rich.

   It’s a long way of saying, it’s how we are paid and can compre to other employees but we compute what it means to our living expenses

7. “Per year” is mostly good for discussing long-term things like applying for loans and mortgages- taxes, too.

   “Per hour” is useful for people who want to know whether they’re paying bills this week, it’s a short-term metric. (Like, it doesn’t matter if you’re theoretically being paid a figure annually, if your actual *hours* are constantly in flux.)

   Both are useful as a means of comparing jobs, but more for salaried positions when discussing Per year and (obviously) hourly positions when comparing per-hour.

   Going to per-month kind of falls between two stools, satisfying neither party.

8. I’m an hourly worker and my monthly pay varies wildly depending on hours worked.

9. Not every month is the same for many people. Yearly salary smooths out the bumps. Teachers, for instance, might not get paid for summer months, depending on their school system or their personal choice. Yearly salary makes comparison easier and more accurate.

   For people who get paid by the hour, it’s pointless. Their pay depends on how many hours they work, not the fact that a month has gone by.

10. The answer like anything else that starts with why do Americans do so and so is simple. Because everyone else does and that’s the norm that we’ve lived with our whole lives. You would have to ask our great great grandparents why we do certain things. You’re talking to mostly 20 and 30 something year olds who are practicing what’s been practiced since probably the early 1900s.

    We do things out of simple convenience a lot of times. We’re busy doing 300 things a week in a hectic society where everyone is constantly going 100mph and our schedules are full of work, family obligations, social stuff, etc… and it’s easier just to follow everyone else. For the next 3 months especially because of all the holidays we’re in a blur constantly. Something as trivial as overthinking monthly bills we’ve been paying for years typically doesn’t matter to a lot of people. Pay day is Friday, pay these bills, on to the next thing. Trust me when I say that every mundane little thing that we all do is because it’s the easiest way to get it done fast. Our society as a whole puts an emphasis on getting things done as quickly and easily as possible.

    Also per month is not a very accurate way to determine salary here. Overtime is a factor especially in the medical field where a lot of us work. We also usually get paid every other Friday and that works out to a few months out of the year where we get paid on the 1st, 3rd, and 5th Fridays and end up getting 3 paychecks.

11. No, it’s not.

12. No salaried position is quoted in per hour pay, they are quoted in annual compensation. Conversely, no hourly position is quoted in annual compensation, they are quoted as hourly pay. They are opposites. At least at my company.

    Further, per year compensation is more relevant for most things. For example when you apply for a credit card, they want to know annual compensation, your overall tax rates are driven off your total annual compensation, whether or not you are eligible for certain tax credits, or are eligible to contribute to IRAs are driven off of annual pay too. The only thing you really need monthly pay for is for budgeting purposes. So it’s less math this way.

13. I’d rather have it measured in take home pay per month because it would help me budget if I decided to take a new job, but most employers go by the “per hour” unless the job is salaried then it’s listed annually

14. Also many professions jobs don’t earn a consistent monthly salary.

15. There’s no real reason why people relate salaries per year vs. per month, it’s just customary.

16. Many of us don’t get paid the same amount every month. I get paid every two weeks.

17. February has 19 working days and March and August each have 23, more than 15% difference. How is that accounted for?

    If you work variable hours or get overtime hourly is much easier. If your job has a busier time of year annually gives a better idea of total pay.

18. Very few Americans get paid by the month.

    Broadly speaking, here you’re “exempt” and getting paid by the year or you’re “nonexempt” and getting paid by the hour.

    Now, your paycheck might physically come in once a month, but that’s not how things are generally takes about here.

19. Because my salary is literally defined as per year. It’s then divided by 26 and I get paid every 2 weeks. Converting that into a monthly number is irrelevant and kind of makes no sense.

    People working hourly don’t work the same number of hours per month so it makes no sense to use there either.

20. Most of us get paid weekly or biweekly. The number of hours or paydays can vary from month to month. Unless we are salaried, even per year is an estimate. The base hourly rate stays the same for those paid hourly; that gets adjusted for overtime and maybe holiday pay.

21. Do you all live paycheck to paycheck? Why do you feel it’s important to constantly compare your wages to expenses?

    If you actually budget rather than guesstimate I don’t think any particular pay amount is better than any other.

22. Monthly paydays are rare in the US. Under the FLSA (Fair labor standards act), hours are tracked weekly and overtime pay is calculated weekly. For those employees who are not eligible for overtime pay, their salary is paid by week. And then there are states who calculate overtime daily. Because of this, most companies pay on a weekly or bi-weekly basis. It’s far simpler to calculate payroll by the same method you have to track time worked.

    So as a result, people talk about $$ per hour or year.

    Math is math, so one method isn’t more or less reliable than the other.

    ETA: payroll frequency is defined at the state level. Some states require weekly payroll, others have are silent on the topic.

23. Those are how wages are communicated in most job offers. Ie we offer you this salaried position of $55k per year paid every 2 weeks or some other rate, or we offer you this hourly rate with the expectation of X hours per week normally with overtime pay (usually 1.5x) if required.

24. If we were sitting down to make a budget we would use by month or by pay period.

    But when we’re discussing it with others we mostly use yearly or hourly because basically everyone has gross base wages structured that way, either paid by the hour or with a yearly salary broken up over however many pay periods that company uses.

    It makes it easier to discuss things apples to apples with others.

    Use the unit that makes the most sense for a given conversation.

25. It comes down to most people getting a weekly or bi-weekly paycheck

26. Per hour you just assume 40hr week times 52.

    I went from salaried to hourly and i am very happy with that move. As now there is an incentive to work more.

    I would of course go back to salary if the number was greater than my yearly total (including OT @10hours/pay period)

27. Here in the UK we use hourly or annual salaries too.

28. I get paid per hour. although when i budget, i estimate a flat number because my paycheck is always going to be at least a certain amount, maybe more if i had to work overtime.

29. I have a variable rate of pay. So while I can mostly predict how much I’ll make next week or next month, I know *exactly* how much I made last year, because taxes. That, and averaging my income over a longer period gives a more accurate picture; I make more in the summer and less in the winter, after all.

30. I’ve never had a job that paid monthly. It’s extra an extra step to convert from annual pay to monthly.

31. So you’re saying measuring income by the thing that varies by 10.7% is more reliable than the things that vary by 0 or 0.3%?