Dollar Sign

Considering On-Call Pay

Let’s say you’ve been offered a new job. $70k base salary, with up to $20k per year extra for on-call duties. Great! $90k! That’s $10k more than my salary now! Sign me up!

Wait a minute. Not so fast.

Years ago I received some good advice: Treat your on-call payment as a separate item. Don’t consider it as part of your base salary. This is because you need to be paid properly both for doing your job, and for the inconvenience of being on-call.

Evaluate the base salary for what it is: Your salary for doing your day-to-day job. Ignoring the on-call part, did they offer you enough money for the role? Is it a good match for your experience?

Separately decide if the on-call payment is enough to justify being on-call. Does it represent a fair payment for the extra work?

Why does this matter? A few reasons:

  • Being on-call has a big impact on your life, and you need to be properly paid for it.
  • You still need to get paid properly for the job you do Monday-Friday.
  • On-call payments will vary. Your job role could change. Maybe the team gets bigger, and you go on-call less often. Now you’re earning less. If your expenditure is based upon maximum on-call payments, you could be in trouble.

Bonus payments are the same. Companies will tempt you with offers of a 20% bonus. Ignore it. Use the base salary for your calculations. A lucky few get ‘guaranteed’ bonuses. Most of us have some vague rules around when we’ll get a bonus, and it usually depends on matters outside our control. You might get it, you might not. You need to base your lifestyle around the money you know you’re getting, not on the money you might be getting.

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2 Responses to Considering On-Call Pay

  1. Jannie H July 1, 2015 at 10:12 pm #

    Even offers with guaranteed bonuses should be carefully considered for their long-term impact. At least where I live, retirement contributions are calculated as a percentage of base salary. Splitting a salary into base and bonus/on-call component often turns out increasing monthly income at the expense of retirement savings, encouraging you to lead an unsustainable lifestyle. The onus is on you to ensure a portion of the extra money is set aside to compensate for this.

    • Lindsay Hill July 2, 2015 at 8:39 am #

      Excellent point! An easy trap to fall into