Ask HN: Do you get paid an annual salary? | Hacker News Reader

Ask HN: Do you get paid an annual salary?

1 pointwilsonfiifi10 comments

I was wondering if any tech companies or startups pay annual salaries as opposed to monthly and which would employees rather prefer? I'm under the impression that annual salaries would make one less reliant on credit and loans especially for 'big purchases'.

What are your thoughts on this?

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With an annual salary the employment of new employees would be difficult. Either the salary has to come in pre, or post the work is done. I don't think there are employees that will pay you a years salary in advance. Nor I think there are employees who will work a year before the first salary.

That is the main problem I can think of with an annual salary. And my own opinion is that I like to get paid a monthly salary, which means I do not have to manage a whole bunch of monies to last all year.

Apart from that

I am paid monthly in arrears. If I was paid annually in arrears, I would have cashflow issues, would have a greater need of short term loans, and would want a larger salary to compensate me for this.

Most of my expenses (credit card, utility bills, mortgage, ...) are monthly; annual and ad hoc expenses combined are less than this. So it makes sense for my salary to come in monthly as well.

There is no company that pays salaries annually. You could always come to a special agreement I guess, but with interest rates where they are right now it makes little sense.

Could you elaborate further on the interest rate argument please? I was thinking that in a country which high inflation rates,employees would welcome the bulk sum so they can spend/invest as they see fit.

The reason I ask is because I was thinking of implementing it at my next startup.

It's cheap to borrow at the moment, so it doesn't hurt employees who are paid monthly but want to borrow more.

It would really mess up your cashflow to pay yearly.

are you referring to start of the financial year or towards the end.....coz if its start ...i am in !

I haven't really thought much about implementation specifics but does it make much of a difference ?

ofcourse if you are being paid for the work you haven't done yet.....i would love that shit man ...

Of course it makes a difference.

If I am paid annually in arrears, I must live off savings or credit for the first year. I pay off the loans and rebuild my savings at the end of the first year, but must dip into them again to get me through the second year. And so on.

And I run the risk that my employer goes bust just before paying my salary and I lose out on a year's wages (if paid monthly, I only risk a month's wages).

Meanwhile, if I'm paid annually in advance, this will surely cause my employer cashflow issues, leading them to only be able to afford paying a lower salary; but I can't effectively use a paid-annually income, because most of my expenses are monthly. And if/when I move jobs, I will probably have to repay salary.

Yes. The two main questions you should ask yourself is:

1. Should the employees work an entire year before they get their first salary?

2. Should the company pay a whole years salary in advance?

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