Depending on your role as a nurse, there are usually several ways you can be reimbursed for the care you perform. For most of us, there are two basic forms of compensation: hourly and salaried. The benefits and detriments of both are varied. However, it is interesting to take a look at differences because you may just find the grass may be greener on the other side.
For reasons of simplicity, we will use nurses in a hospital setting to compare pay types.
Hourly compensation is fairly straight forward. A nurse is compensated based upon the amount of time spent performing their job. You come in, clock in, work and get paid. You clock out and you stop getting paid. It’s fairly simple in the fact that if you work you get paid and if you do not, you don’t. Of course there are almost always ways to replace income lost from reasons of sickness or planned vacation, as long as the nurse does not abuse these privileges.
If a nurse works more than 40 hours in a week then you are usually compensated at time-and-a-half, and sometimes even more. Some hospitals will figure in your average salary based upon your shift differentials, and pay the additional half based upon that rate. Most of the times, nurses have no trouble picking up extra shifts and can easily earn a few extra dollars if the need arises. However, if they miss a day of work, they have to use their sick/vacation time or they will not get the paycheck they have grown accustomed to.
Shift Differentials and Premiums
Nurses often have shift differentials that can help increase their pay and compensate them for working at times that many would feel to be undesirable times to work. For instance, a nurse may get a few extra dollars per hour for working at night, she might even get a few more for working the weekend at night. So potentially a nurse can earn quite a bit more money and have a greater compensation for her time. So potentially, if a nurse wants or needs to, he or she can have the ability to add large sums of money to their paychecks by working extra days or less-desirable shifts.
Some hospitals also have premiums and incentives for those willing to pick up extra shifts or are willing to come in and work fi the need arises. The compensation for this can vary from an extra $5-$20 per hour (sometimes more, depending on your location) to flat bonus bucks or shift premiums. These bonus bucks are varied based upon need and healthcare facility. They often range anywhere between $50 and $200 and often come in conjunction with the hourly shift premium.
Bonus Income is Not Guaranteed
It should be noted that these premiums and differentials vary widely from facility to facility. This money is like a gamble. These can, and often do change without notice or warning and often sway with hospital budgets and patient census. These cannot and should not be viewed as reliable and steady sources o income for nurse because I have seen first hard where nurses can lose $500 a month with a policy change in relationship to shift differentials and premiums. These are bonuses, or perks, and should be viewed as such.
Shift differentials and premiums for nurses are the first thing to go when the hospital wants to cut back on expenses. When the finances of the hospital improves, sometimes they bring them back but often times they do not return. However, when the times are good, the premiums reflect, and a nurse can be well compensated through these bonuses.
Low-Census and Being Called Off
People will always be sick. There will always be a need for competent nurses, but sometimes the need for nurses at a particular time or on a particular unit decreases. This is increasingly common in the summer, due the “July Effect” that many patients are aware of. This causes a decrease in elective surgeries which trickles-down across the entire healthcare organization. Thusly, it impacts the wallets of nurses as well.
Hospitals often experience “low census” and many nurses are “called-off” and are forced to either use their saved time (vacation or PTO) or will have significantly less to show on their paycheck. Another thing to consider: your paid-time-off is usually only paid at your base pay as a nurse. So even though you typically earn $30/hour as a nurse on the floor, $8 of that is from your shift differentials. Your base pay is only $22 and 12 hours at $22 is a lot less than 12 hours at $30.
You annual salary is divided and you are paid based upon that. If you work more or less you are not compensated any more or less. There are usually terms in place that outline vacation and sick time, but typically speaking, your income is constant and there is no real way to earn extra income. However, you also do not have to deal with the uncertainty of hourly wages. Your income is controlled and consistent.
If you can budget well, and have savings on hand for emergencies, being a salaried employee is a beautifully thing. This can bring a great decrease in stress in terms of finances. Your income is predictable, steady, and consequently, your budget can be as well.
Hourly Verses Salaried
Is there a clear cut winner between the two?
It all depends on what you want in your life. Do you want the ability to earn extra income, work at night, or perhaps weekends for increased wages? Well then for you hourly is the way to do. However, if the opportunity arises for a salaried position, and you’re looking for stability, consistency, and uniformity in your finances and budget, then don’t snub your nose at it. Variety is definitely the spice of life, but for this nerdy nurse, I’ll take my paycheck as bland as possible.
Thoughts on Forms of Income
What are your feelings on paycheck spice? Do you like flexibility and the ability to earn a bigger paycheck or does the idea of consistency in salary strike your fancy?
Would love to get your opinions on consistency in budgeting or lack thereof in relationship to how you are compensated for the work that you do.
This post originally appeared as a guest post on The Millionaire Nurse Blog