Teacher pay is usually the largest single cost in a tutoring school, and the pay model is usually chosen once, early, by copying whatever the owner's previous employer did. It then runs for years without anyone asking what it encourages.
Every pay model encourages something. That is not a flaw; it is what pay does. The question is whether the behavior your model rewards is the behavior you actually want, and whether you can afford it at the class sizes you really run.
This guide compares the four common structures with one illustrative school. The numbers are invented and deliberately simple. Local employment law and tax rules vary a great deal and are not covered here; talk to someone who knows your country's rules before you change contracts.
The four models
For every example below, the school charges 9 per student per hour of group lessons.
- Hourly. 15 per hour taught, whatever the class size.
- Per student. 2.50 per student per hour taught.
- Salaried. 1,800 a month for a teaching load of up to 100 hours.
- Hybrid. 12 per hour taught, plus 1.50 for each student above four.
The hybrid was designed to pay exactly the same as hourly at this school's typical class size of six. That is a good way to design one: start from what teachers earn today at a normal class, and change only what happens above and below it.
What each model costs per class hour
| Class size | Revenue | Hourly | Per student | Salaried (at 100 hours) | Hybrid |
|---|
| 3 students | 27 | 15.00 | 7.50 | 18.00 | 12.00 |
| 6 students | 54 | 15.00 | 15.00 | 18.00 | 15.00 |
| 10 students | 90 | 15.00 | 25.00 | 18.00 | 21.00 |
The same numbers as a share of the class's revenue:
| Class size | Hourly | Per student | Salaried | Hybrid |
|---|
| 3 students | 56% | 28% | 67% | 44% |
| 6 students | 28% | 28% | 33% | 28% |
| 10 students | 17% | 28% | 20% | 23% |
A few things jump out.
Per-student pay is the only model with a constant share. The school always pays 28% of revenue to the teacher, whatever the class size. That is attractive to an owner and uncomfortable for a teacher, because all the risk of small classes lands on the teacher.
Hourly pay puts all the class-size risk on the school. A class of three costs 56% of its revenue in teacher pay alone, before rent. A class of ten costs 17%.
The salaried figure is only 18 if the teacher actually teaches 100 hours. At 70 hours a month, the same salary works out at about 25.70 per class hour. Salaries are economical when the timetable is full and expensive when it is not.
The hybrid sits in between. It protects the teacher from the worst of small classes and shares some of the upside of large ones.
What a teacher actually earns
Owners compare models by cost per class hour. Teachers compare them by what arrives at the end of the month. Here is a teacher with 80 teaching hours a month, depending on the average size of their groups:
| Average group size | Hourly | Per student | Salaried | Hybrid |
|---|
| 4 students | 1,200 | 800 | 1,800 | 960 |
| 6 students | 1,200 | 1,200 | 1,800 | 1,200 |
| 8 students | 1,200 | 1,600 | 1,800 | 1,440 |
Look at the per-student column from the teacher's side. The difference between an average of four and an average of eight is the difference between 800 and 1,600. Much of that is outside the teacher's control: which groups the timetable gives them, which families move away, which term has fewer enquiries. Pay that swings by a factor of two for reasons a teacher cannot influence tends to produce one of two things: a teacher who leaves, or a teacher who starts fighting for the big groups.
What each model quietly encourages
Hourly
Encourages: turning up, reliably, for every scheduled hour.
Does not encourage: caring whether students stay, whether groups fill, or whether a weak student is moved to a better level. None of those change the teacher's pay.
Watch for: disputes about canceled lessons. If a class is canceled, is the hour paid? Decide in advance and write it down (more on this below).
Works best when: the school is small, the owner manages retention personally, and simplicity matters more than incentives.
Per student
Encourages: full classes and, in theory, retention.
Also encourages, less helpfully: resisting a student's move to another group ("they're doing fine here"), reluctance to split a group that has grown too large, and competition between teachers for the popular time slots. A teacher paid per student has a financial reason to keep a student in the wrong level.
Watch for: the question of absent students. Does a student who misses a lesson count? If yes, the school pays for teaching nobody. If no, the teacher's pay depends on attendance they partly cannot control. Either answer is defensible; not having an answer is not.
Works best when: teachers genuinely control enrollment (for example, independent tutors renting space) and understand the risk they are taking on.
Salaried
Encourages: loyalty, availability, and willingness to do the things that are not teaching: covering for a sick colleague, parent meetings, placement tests, training new staff.
Does not encourage: filling the timetable. A salaried teacher with 70 hours of classes is paid the same as one with 100.
Watch for: the definition of the load. "Up to 100 hours" needs to say what happens at 110, what counts towards the 100, and what happens in quiet months. Salaried staff also usually come with employment obligations (leave, insurance, notice) that the other models may or may not.
Works best when: the school is big enough to keep salaried teachers fully loaded, and depends on a few experienced teachers it cannot afford to lose. Your best teacher is a single point of failure explains why that dependency needs managing either way.
Hybrid
Encourages: a bit of everything. The base covers the teacher's commitment to turn up; the per-student element shares the benefit of full groups.
Watch for: complexity. The formula should be simple enough that a teacher can check their own pay with a calculator. Once it needs a spreadsheet to explain, it stops motivating anyone and starts generating questions.
Works best when: the school is growing, class sizes vary, and the owner wants teachers to care about full groups without carrying all the risk of empty ones.
The rules that matter more than the model
Pay disputes are rarely about the model itself. They tend to be about edge cases nobody decided in advance. Whatever structure you choose, write down these five rules and give them to every teacher before they start.
1. What counts as a paid hour. Cover at least:
- The school cancels a class at short notice (room problem, low numbers): paid or not? And holidays announced in advance?
- A family cancels a one-to-one lesson at short notice: paid, part-paid or not?
- A make-up lesson for students who missed a class: paid at the normal rate?
- A class runs with zero students because nobody turned up: paid?
A defensible set of answers: short-notice cancellations by the school are paid, while holidays already in the term calendar are not; short-notice family cancellations of one-to-one lessons are paid if the family is charged; make-up lessons are paid; a scheduled class that nobody attends is paid, because the teacher was there.
2. Non-teaching time. Preparation, marking, reports, meetings, placement tests, parent conversations. Either the hourly rate is high enough to include them, and you say so, or they are paid separately at a stated rate. What does not work is expecting them and paying for neither.
3. The source of truth. Pay should be calculated from attendance records, not from a teacher's own list or an administrator's memory. If attendance is recorded for every lesson, the pay calculation is a report, and both sides are looking at the same data.
4. A statement before payday. Send each teacher a list of the hours and classes they are being paid for a few days before payment, with a window to raise mistakes. Most disputes disappear when the teacher can see the list, and the ones that remain are raised before the money moves rather than after.
5. When the rate changes. Review pay once a year, at a known time, rather than whenever someone asks. A known review date turns "can I have a raise?" into "what will we look at in the review?", which is a much easier conversation for both sides.
Choosing a model
| If your school... | Consider |
|---|
| Is small, with the owner teaching and managing retention | Hourly |
| Rents space to independent tutors who bring their own students | Per student |
| Depends on a few experienced teachers and has a full timetable | Salaried |
| Is growing, with class sizes that vary a lot between groups | Hybrid |
Whatever you choose, run the numbers in the first table with your own fee and your own class sizes before you commit. A model that looks generous at a class of eight can be ruinous at a class of three, and the other way round. What one class hour really costs shows how to put teacher pay next to rent and admin, and how to pay teachers covers the basics if you are setting up pay for the first time.
Changing an existing model
If you are moving teachers from one model to another, three things make it far easier:
- Show each teacher their own numbers. "Under the new model, last term you would have earned X instead of Y." Abstract explanations generate anxiety; personal numbers generate questions you can answer.
- Protect the first term. A guarantee that nobody earns less than under the old model for the first term costs little and removes most of the resistance.
- Change one thing at a time. Moving from hourly to hybrid and changing the cancellation rules in the same month means every complaint is about both, and you cannot tell which change caused it.
Pay calculated from attendance only works if attendance is recorded for every lesson, by the teacher, at the time. When it is, the monthly pay run is a report both sides can check rather than an argument. That is the part Schoolory is built for.