It’s no secret that compared with other professions, teachers don’t make a lot of money, but if you’re thinking about entering this profession as a second career, it helps to understand how the compensation schedule works in a public school system.  Unlike typical salaried jobs in Silicon Valley where your compensation might consist of a base salary, performance bonus and equity grants, teachers are paid on a salary schedule that increases based on two factors:

1. # of Credited Years of Experience
2. # of Academic Units Completed After Bachelor’s Degree

There are also additions to base salary based on completion of a Master’s degree or Doctoral degree.  Public school districts will publish their salary schedule, like this one from Palo Alto Unified School District.  As an example, a starting teacher could make anywhere from $76,488 per school year to $88,518 (see Step 1), and get an additional $2,932 for a Masters degree.  What’s interesting to note about this salary schedule in particular is that for teachers that don’t have that many completed Academic units beyond their Bachelor’s degree, increases in salary stop at ten years.  However, for teachers who earn a Master’s degree along with a teaching credential, their salary schedule would move over to the right, as the required coursework lies somewhere between the 45 unit and 60 unit columns.

Another difference in pay between the private and public sector is that social security taxes are not deducted from teacher paychecks.  That’s because instead of paying into Social Security, teachers pay into a State Teacher Retirement System.  In California, that agency is CALSTRS.  Upon retirement, teachers will receive a pension that is based on a formula that factors in three things:

1. # Years of Service
2. Age Factor
3. Final Compensation

Pursuing teaching as a second career means that hypothetically, I will start teaching in my mid-forties and retire in my mid-sixties.  With 20 years of service, an age factor of 2.4% (which corresponds to age 65) and final compensation of $100k, this works out to an annual pension of $48k.  Since I have contributed to Social Security previously during my career in finance, upon retirement, I would hypothetically get some combination of Social Security and teachers pension, although there are some other complications like the Windfall Elimination Provision (WEP) which I will delve into later.

As for substitute teaching in the Bay Area, from what I’ve seen, the day rate ranges from $180-$280/day depending on the school district.  Some districts try to incentivize substitute teachers by paying a lump sum bonus if they work more than a certain number of days in the district.  When teaching vacancies arise, rates increase for long-term substitute teaching assignments, because there is the added workload of creating lesson plans, grading student work, etc.