Hourly and salaried are not pay levels, they are pay structures, and neither is inherently better paid. What changes is whether overtime is owed and how predictable earnings are. In occupations with regular overtime, hourly gross routinely exceeds the salaried figure for the same work — and moving from hourly to salaried without a base increase can be a pay cut disguised as a promotion.
Hourly and salaried are not the distinction that matters
The legal question is exempt or non-exempt, and it is not the same question. A salaried employee can be non-exempt and owed overtime; an hourly employee is almost always non-exempt.
Employers frequently use “salaried” as shorthand for “no overtime”, and that shorthand is wrong often enough to be worth money. Being paid a salary does not by itself remove your right to overtime.
What actually decides it
Three tests, all of which must be met. Paid on a salary basis. Paid at least the threshold — currently $684 a week, which is $35,568 a year. And performing duties that fit one of the exemptions.
The duties test is the one that fails. “Primary duty” means the principal one, not merely one among several, and a title containing the word manager decides nothing.
The threshold that people have wrong
A 2024 rule would have raised the threshold to $844 a week and then $1,128. It was vacated in court and formally rescinded in May 2026, restoring the earlier figures.
So the operative numbers are $684 a week and a highly compensated employee threshold of $107,432. If you see $43,888 or $58,656 quoted, that source has not been revisited since 2024. California sets its own, considerably higher, at $70,304 for 2026.
Which occupations sit where
Hourly dominates where hours vary and are tracked: retail, food service, warehousing, most construction trades, much of healthcare delivery, and manufacturing.
Salaried dominates in professional, technical, administrative and management work — but a substantial share of those are non-exempt and owed overtime, particularly at the lower end of the pay range.
What each arrangement is really trading
Hourly pays you for time, which means overtime when hours run long and nothing when they run short. The income is variable and the protection is real.
Salaried exempt pays you for the job. Long weeks cost you rather than the employer, which is the trade. In exchange you get predictable income and usually better benefits and progression.
Neither is better in the abstract. Which one suits you depends on whether your hours are stable, and on whether you would rather be paid for the fiftieth hour or not work it.
The conversion that catches people
Moving from hourly to salaried is frequently presented as a promotion and is sometimes a pay cut. If you regularly worked overtime, your annual earnings included it, and a salary set against your base rate quietly removes it.
Do the arithmetic before accepting. Take last year’s total gross, not your hourly rate times 2,080, and compare that against the offered salary. The gap is what the promotion costs.
What to check on your own pay
Whether your employer classifies you as exempt, and on which exemption. You are entitled to ask, and a well-run employer will tell you plainly.
Then compare your actual duties against that exemption’s definition rather than against your title. Misclassification is common, usually unintentional, and worth real money in back overtime.
The deduction trap for salaried staff
Improper deductions from an exempt employee’s salary can destroy the exemption — not just for you, but potentially for everybody in the same role.
Deducting for a partial-day absence, or docking pay for equipment or shortages, are the usual culprits. If that is happening to you, the classification itself is in question, and this is worth raising with your state labor agency.
This is general information rather than legal advice, and classification turns on your actual duties and your state.
Common questions
Is salaried better paid than hourly?
Not inherently. What changes is whether overtime is owed and how predictable earnings are. For occupations with regular overtime, hourly gross often exceeds the salaried figure for the same work.
Does being salaried mean I cannot get overtime?
No. Overtime depends on exempt status, which requires both a salary above a threshold and a duties test. A salaried non-exempt worker is owed overtime like anyone else.
How do I check whether a salary offer is really a raise?
Work out your actual gross including overtime over the last few months and compare. If the salary merely matches that gross, you are being asked to give up the overtime premium for nothing.
Why does published data show both hourly and annual figures?
Because occupations differ in how they are paid. The annual figure assumes full-time year-round work, so for part-time or seasonal occupations the hourly figure is the honest one.
Can an employer switch me from hourly to salaried?
Generally yes, provided the classification is lawful for the work you do. Whether it is lawful depends on the duties test, not on the switch itself or on your job title.
Does being salaried mean no overtime?
No. The legal test is exempt or non-exempt, not hourly or salaried. A salaried employee can be non-exempt and owed overtime.
What is the overtime salary threshold?
$684 a week, which is $35,568 a year, plus a highly compensated threshold of $107,432. The 2024 rule that would have raised it was rescinded in May 2026.
Is moving from hourly to salaried a promotion?
Sometimes it is a pay cut. Compare last year's total gross including overtime against the offered salary, not your hourly rate times 2,080.