What does hourly pay mean?

Hourly pay refers to a system of compensation where employees are paid a set rate for each hour they work. This means that the total earnings of the employee will vary based on the number of hours they work during a given pay period. In contrast to a fixed salary, which remains constant regardless of hours worked, hourly pay gives employees the opportunity to earn more by working additional hours or overtime, typically at a higher rate.

Hourly compensation can also be advantageous for both employees and employers. Employees benefit from potentially higher earnings for extra hours worked, while employers gain flexibility in staffing based on fluctuating workloads. This payment model is commonly used for various jobs, particularly in fields such as retail, hospitality, and manual labor, where hours worked can vary significantly from week to week or season to season.