Compensation for Nurses: Hourly Wages Vs. Salaried

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 for nurses: 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 Wages

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

roulette wheel gamblingIt 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.

Salaried Employees

For a salaried employee your paycheck remains the same. This allows for an added sense of security because you know that the amount of money you receive is set and safe.

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


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8 thoughts on “Compensation for Nurses: Hourly Wages Vs. Salaried”

  1. Hi, I am now trying to figure out if I take a possible job offer for a salaried position. I have been working as an hourly RN for the last 11 years and I am ready for a change, but yes the choice of salaried is a big one. I am trying to figure out how to figure out what is the best choice. I guess I will wait until they tell me what the wage would be and do some math to figure out how much that comes to be per hour/worked. This job also involves driving. The place or time unknown…it is when its needed as a hospice admission coordinator.
    Now that I applied and have gone through one interview and going on the second interview this seems closer and nerve wrecking. But at least its not walking for 12 hours on the floor which can be very tiring.

    1. No instead you may be working up to 20 hours per day for the same pay. I do hospice but I only work as a travel nurse. I have had 2 salaried positions in hospice and will never in my life even consider it.

  2. Greg Mercer, MSN

    Great review! One problem and strength, depending how you look at it, in nursing is that the quality and quantity of your work (except as measured in time spent) are not compensated in Nursing: no tips, no fee fo service for most of us, so we get paid the same regardless. It makes for less corruption, but also less incentive to perform: many Nurses work as hard as they can for other reasons, but there will always be some that find ways to slack off, because it’s less work and the same wage. Ask the Soviets: if you pay everyone the same regardless, you get less work. Nurses as a group do better than most overcoming this disincentive, to our credit.

    1. I’ve seen it vary by facility. Home care nurses are either paid per hour, per visit, or salaried.
      I think for the bottom-line the home care agency does better with per visit or salaried. The nurse typically does better hourly. However, many nurses will milk an hourly rate in home care, so that is why many agencies do not use this model or they have strictly enforced productivity guidelines.
      In reality, salaried is probably the best model in home care. You know you will get the same paycheck, sometimes your patient load may be up, but at other times it will be down. I personally do not like a per visit model because I think it invites a lot of skimping in patient care and nurses will rush through their visits just to be done earlier.
      6 visits a day is actually on the lower in based upon what I’ve seen. If you’re doing routine visits, the standard that I have seen is 8. This varies, of course, from agency to agency and state to state.

  3. Very useful article. You talked about the different options of monetary relations in the medical industry. It turns out that, in principle, everyone has a choice. Whether to be on a salary or hourly wage, everywhere you can find both positive and negative, but in my opinion, fixed salary offers more stability and the opportunity to concentrate on the performance of their duties, and not on the number of hours worked. Nurse salary too dependent on many factors, let everyone make their choice.

    1. Not much of a choice when you work on the floor. I feel I was very blessed to be able to work in an administrative role and be salaried. It’s so much less stressful to know my paycheck will be the same every two weeks.

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