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How Private, Public, and Charter Schools Pay Teachers

November 01, 2020

Written by Complete Payroll

How Private, Public, and Charter Schools Pay Teachers - Complete Payroll

How Private, Public, and Charter Schools Pay Teachers - Complete Payroll

The topic of teacher compensation riles people up. Some think that all of the problems in our educational system are caused by low teacher wages. Others point to seniority-based salaries and the high cost of teacher pensions as evidence that, if anything, teachers are paid too much.

The truth is that teacher compensation varies greatly from state to state, city to city, and even from one type of school to another. Private, public, and charter schools each have models of teacher compensation that reflect the different economic realities they face.

Who’s writing the checks?

Private schools rely on tuition and donations for funding.  Although there may be a teachers’ association, private schools are not unionized and salaries are negotiated on an individual basis. Some private school teachers earn more than their public school colleagues, but the average teacher does not.

Public schools receive federal, state, and local funding. Pay rates are set at the district level by collective bargaining between the teachers’ union and the district. On average, teachers at public schools earn more than teachers at charter or private schools.

Charter schools receive state but not local funding, so they are reliant on grants and donations. They typically pay less than public or private schools - collective bargaining is rare and charter schools have little incentive to pay teachers more than necessary.

Who’s being hired?

Charter schools tend to hire less-experienced teachers who turn over at a higher rate. A 2014 snapshot of the National Association for Independent Schools showed that 19% of teachers employed by member schools had 5 years of experience or less.

The U.S. Department of Education’s Schools and Staffing Survey shows a clear gap in experience and education between charter school teachers and public school teachers. Public school teachers tend to be older, more experienced and more educated.

Who benefits the most?

85% of public school teachers are enrolled in a pension plan where the payout is determined by a formula based on years of service and average salary rather than by the vagaries of the stock market. That sounds great, unless you’re trying to enter the profession.

The criticism of public school pensions is that the entire plan is designed to reward career service at the expense of entry level salaries. Beginning teachers have to earn less in order for school districts to be able to afford looming pension payments for those nearing retirement.

Teachers at charter and private schools are more likely to be enrolled in a standard 401(k) plan.

The Bottom Line

Regardless of whether the school is public, private, or charter, the topic of teacher compensation is complicated. As you bring issues like school vouchers and other forms of federal funding into the discussion, it becomes even more complex. However, taking the time to educate yourself will help you have a better understanding of this topic that impacts the people teaching future members of the workforce.

DISCLAIMER: The information provided herein does not constitute the provision of legal advice, tax advice, accounting services or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional legal, tax, accounting, or other professional advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation and for your particular state(s) of operation.

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