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Teacher Compensation

Teacher compensation — which includes pay, a pension and other benefits — is the single largest expenditure for school districts. The average base teaching salary is $57,900, according to 2017-18 federal data, although salaries vary widely by state. (The National Education Association publishes annual data on state salaries.) 

Most school districts have what’s known as a “step and lane” salary schedule that determines raises. Teachers earn a “step” pay increase for each additional year of experience and can move to a higher “lane” by earning an advanced degree or a certain number of credit hours of professional development. 

Salary schedules vary by district, but in many places, it can take 25 years or more for teachers to reach the highest pay level. Teachers typically cannot negotiate a raise outside of their district’s salary schedule on their own, but local teachers’ unions do bargain for pay raises and revisions to the schedule. 

About one-third of states have statewide teacher salary schedules, which dictate the minimum school districts must pay their teachers. But districts in those states can pay their teachers more than the state-determined rates. Often, school districts that serve more affluent populations are able to pay their teachers more than districts that serve lower-income families.

Teachers often can earn additional compensation by leading extracurriculars or taking on leadership roles in school systems. And some states and districts offer extra pay or bonuses based on students’ performance. These pay-for-performance models, which are usually based on standardized test scores, are controversial among teachers and unions.

Public school teachers earn about 20% less in weekly wages than other college-educated workers with similar experience, according to research by the Economic Policy Institute. That pay gap does not, however, take into effect the benefits teachers receive.

About 90% of public school teachers are enrolled in what are called defined-benefit pension plans, which promise a specific payout to teachers upon retirement that’s determined by a formula instead of investment returns. The formula is typically based on the teacher’s final average salary and years of service. The longer the teacher stays in the profession, the more generous the pension becomes. Teachers who quit before retirement age — and sometimes those who move across state lines — sacrifice a significant share of their pension income. 

However, state pension systems are grossly underfunded, and some states project they won’t have enough money within the next decade to pay teachers what they’re owed at retirement. To try and close the gap, some state policymakers have proposed switching new teachers to a 401(k)-style defined-contribution plan or a “cash-balance” plan, which is a type of defined-benefit plan that provides employees a guaranteed rate of return. Some states have also tried to reduce benefits for new teachers by increasing their contribution rates or increasing the length of time before teachers qualify for benefits. 

Teachers in 15 states are not covered by Social Security, making pension reform a critical policy story. 

Updated June 2021.