Are you new to the whole job market vibe? Familiarize yourself with the differences in pay structures before you sign the dotted lines.

If it were up to you, would you take the job offering a yearly, fixed income or settle for commission-based salary purely on performance? The answer is not as simple as you may think, but try considering all the factors when choosing what will be best for you.

Salary Position

Knowing that you have that pay-check at the end of each month can be reassuring and offers you the stability to be able to budget and plan ahead. Pay increases are however not something to write home about as they usually range between 3-5% of your gross increase that is earned year-in-year-out.

Another benefit to that steady flow of income is the fringe benefits and health insurance that is usually offered by your employers. This obviously varies from company to company whether they will pick up some, half or all of your medical aid costs. But sometimes something is always better than nothing especially if you are a ‘family man’ and have kids to cover. Other fringe benefits could also include paid annual leave, dental insurance (kids again, could get pricey?), company paid holidays and yearly incentives.

Commission-based Position

Traditionally sales / service positions are commissioned-based and do not offer the stability of a monthly salary, but the potential earnings of a commissioned-based position can be limitless. That of course depends on how hard you work; the more business you can generate = the more money you will make.

Of course your salary fluctuates each month and some months will be less profitable than others. Hence it is important to plan and budget accordingly to each monthly profit and not go off on a tangent in the hopes that you will bring home the whole pig, never mind just the bacon.

Another drawback is that you will have to settle health-care expenses on your own. Premiums for health insurances are paid out of your own pocket, which can be quite costly if you have a family. Self-employed or independent contractors you will have to calculate taxes to be paid at the end of the tax year. Be sure to know whether you will need to stash some cash away or whether you are good to go.

What is best for you?

Consider all the factors that will help you decide whether you are better suited for a set salary position or whether you can get away with living on a commission-based income. Things to also consider when deciding on which kind of structure would be best for you would also include, whether you have other people depending on you, or do you have children, or is there a dual-income in the household, or are you energetic and outgoing person or an introvert?

At the end of the day think through all your options and who knows you might even land a job that may just offer both!