

Ask HN: Do you get paid an annual salary? - wilsonfiifi

I was wondering if any tech companies or startups pay annual salaries as opposed to monthly and which would employees rather prefer? I&#x27;m under the impression that annual salaries would make one less reliant on credit and loans especially for &#x27;big purchases&#x27;.<p>What are your thoughts on this?
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samaire
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

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mooism2
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.

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nodata
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.

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wilsonfiifi
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.

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nodata
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.

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

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

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mooism2
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.

