Teacher pay is by far the largest cost of operating a school.

In This Lesson

How much are teachers paid?

Has teacher pay kept up with inflation?

How is teacher pay determined?

What compensation falls outside of salary?

What's good and bad about teacher salary schedules?

Could paying teachers differently improve schools?

How should California improve teacher compensation?

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★ Discussion Guide.

It is also one of the most important tools school districts have to attract and retain the teachers their students need.

People choose to become teachers for many reasons, but getting rich is not among them. As a job, teaching is steady work, usually with decent health care benefits and the promise of a pension in retirement. But pay matters. It affects who can afford to become a teacher, where teachers choose to work, and whether they stay in the profession.

This lesson explains how teacher pay works, why a rigid salary schedule became the norm, and competing views about how compensation systems could be changed.

How much are teachers paid?

In decades long past, teaching was perceived as a relatively lucrative profession for women, whose professional options were constrained. This has not been the case in the U.S. for a long time. Even in California, with some of the highest teacher salaries in the country, teaching isn't particularly well-paid work compared with other jobs that require similar levels of education.

Many new teachers begin their careers saddled with college debt. It's common for them to struggle to find places they can afford to live. Many new teachers work second jobs.

According to data from the California Department of Education in 2026, the average annual pre-tax salary for teachers in 2024-25 was $103,552, with a lot of variation. Beginning teachers made an average of about $60,000, and the highest-paid teachers made around $130,000. Teacher pay tends to be higher in areas where the cost of living is high.

Has teacher pay kept up?

Taking the long view, teacher pay in the USA has basically kept pace with inflation. Average pay for teachers has floated along a bit better in California than it has in other states:

Keeping up with inflation is a low bar for a profession that requires a college degree. Since the 1980s, pay for teachers in America has lagged comparable employment, as described in Ed100 Lesson 3.1.

Dr. Sylvia Allegretto, an economist with the Economic Policy Institute (EPI), has analyzed teacher compensation for many years, incorporating data from across the US including reported hours worked, salaries, bonuses, benefits, gender, age, experience, union membership and geography. According to the EPI 2026 analysis, after expanding for years, the national wage gap between teachers and similarly educated and experienced professionals reached an all-time high in 2025. Pay for teachers in California is higher than it is in most states, so the gap is smaller.

Why aren't more men teaching? Pay is probably part of the story. In 2025, men teaching in U.S. public schools made about a third less in wages than men in other comparable professions:

Comparisons like these aren't as simple as they might seem. Teachers are public employees, so their actual pay is public record. (Yes, you can look it up.) In 2023, an analysis by Transparent California argued that the EPI methodology systematically underestimates teacher compensation, especially when considering benefits and pensions. Those are important parts of teacher compensation, covered in Lessons 3.7 and 3.11.

Other countries pay teachers better

The Organization for Economic Cooperation and Development (OECD) collects data about public education around the world, including teacher pay. According to OECD data from 2024, the wage gap between teachers and other similarly educated workers is significantly worse in America than in any other participating country. (See Figure 6.)

Teacher pay varies by school district

Teacher salaries and other compensation are local decisions, negotiated between school districts and teacher unions. The local cost of living matters enormously in these negotiations. What drives differences in the cost of living? More than any other factor, it's the cost of rent. This conclusion has been researched repeatedly:

• In 2018, the St. Louis Fed studied the relationship beween teacher pay and rent, documenting the obvious: in locales where living costs are high, teacher pay has to be high, too.
• In 2019, EdSource evaluated housing affordability for teachers in California. It found that many of the areas where teachers are paid the most are where teachers can least afford to live.
• In 2022, the National Center for Teacher Quality conducted a similar study, identifying the toughest metro areas in the USA for teachers to afford housing. Many of them are in California.
• In 2026, a major study through the Center for Cities and Schools at UC Berkeley examined the policy options for high-cost communities to provide affordable housing to educators.

How is teacher pay determined?

A teacher's pay is set through a contract between the teacher and their employer, generally a school district.

Teacher pay is usually determined by two things: years of experience and postgraduate credits earned.

Teachers in virtually all U.S. public school districts are paid according to a negotiated single salary schedule. If you know the number of years a teacher has worked in the district (steps) and the number of qualifying postgraduate college credits the teacher has completed (columns or lanes), you can usually determine the teacher's base salary.

In the graphs below, teachers begin their career on the left, usually following the lowest line, marked BA (bachelor's degree). Over time, their pay rises as they move through the steps. Teachers can also boost their pay if they qualify to move to a higher column by earning additional college credits.

The charts above simplify the system a bit. It's common for districts to reward advanced degrees: a 2025 analysis of 148 large U.S. school districts found that 91% paid teachers more if they have a master’s degree. Many districts provide additional compensation for teachers who earn a Ph.D. Some offer bonuses or stipends for working in hard-to-fill positions or for taking on additional responsibilities. But the big picture is consistent: base salaries are largely determined by years of service and college study.

It’s important to acknowledge that this system is based more on tradition than on evidence of impact. Research consistently finds that teachers tend to become more effective with experience—especially during their first few years—but conventional salary-schedule measures such as accumulating graduate credits or earning a master’s degree are only weakly and indirectly associated with better student outcomes.

In 2026, as part of the Getting Down to Facts III research project, Paul Bruno dug deeply into how school districts in California actually spend money, how spending has changed over time, and how California differs from other states. Among the key findings: teacher salaries in California have grown slowly relative to other costs like benefits, pensions, and operational costs.

Salary isn't quite the same as compensation

Ed100 Lesson 3.11
How do teacher pensions compare?

A teacher's salary is the main component of their compensation, but in most districts teachers can earn additional amounts for work such as coaching, mentoring, summer school, or other responsibilities. Non-salary benefits such as health insurance are valuable, too.

And as explained in Ed100 Lesson 3.11, pensions are a profoundly important part of the overall compensation system for teachers. From every real perspective, the cost of employing a teacher significantly exceeds the amount shown on the salary schedule.

Should school districts become landlords?

Teacher pay is low relative to the cost of housing in many areas of California. One possible response is to create lower-cost housing for teachers on land already owned by school districts. In 2024, CalMatters reported on a smattering of school districts that had invested in low-rent residential buildings, effectively becoming landlords for teachers.

Critics argue that school districts should focus on education rather than property management. Supporters see workforce housing as another form of compensation — one aimed directly at the problem that makes recruiting teachers difficult in some communities.

What's good and bad about teacher salary schedules?

Historical context: Salary schedules came into common use in the late 1800s as a way to make pay systems easier to administer. Early differentiated salary schedules were explicitly racist and sexist — districts had multiple schedules that specified different amounts for the same work. Establishing a single salary schedule was an important aim of movements for change in the 1920s, beginning with Denver and Des Moines. By the end of the 1950s, single salary schedules had become overwhelmingly standard.

The good news: Single salary schedules greatly reduced discriminatory pay practices related to gender and ethnicity. They also made pay transparent and predictable. Two teachers with the same employer, the same recognized experience, and similar education generally know that they will receive the same base salary.

The bad news: The same simplicity makes salary schedules rigid. They generally don't distinguish between areas of expertise, effectiveness, market conditions, hard-to-fill assignments, or contributions teachers make beyond their basic job responsibilities.

The conventional salary schedule essentially provides two ways to earn a higher salary: (1) keep teaching and (2) spend money and time taking more college classes. As discussed in Lesson 3.5, this is probably inefficient. The evidence that additional college credits or degrees make teachers better at their jobs is weak, although advanced study in math or science can help if the teacher teaches in that field.

Salary schedules can influence career decisions in other ways, too. Ever wonder why so many teachers stay at the same school district for their whole career? A big part of the reason is money. Teacher contracts generally increase salaries with years of service, but limit the years of experience they recognize when they hire from another school district. In effect, changing jobs means taking a pay cut. (And, as we will explain in lesson 3.11, a pay cut means a pension cut, too.)

Could paying teachers differently improve student learning?

As described above, the pay system for teachers is formulaic. Very few districts have chosen to alter it significantly, despite considerable talk and some experimentation. Broadly, efforts to change the financial incentives associated with teaching have fallen in four categories:

Alternative Approaches: Pay teachers for...

Use differentiated pay to create incentives, including:

Position

Increase pay for teachers who take on hard-to-fill positions.

Examples:

Teach in communities with high crime rates.

Teach students with special education needs.

Teach math, science.

Demonstrated Skills

Increase pay for teachers with specific capabilities.

Examples:

National Board Certification.

Multilingual fluency.

Added Responsibilities

Increase pay for teachers who serve specific roles.

Examples:

Mentor other teachers.

Lead a grade level or department.

Lead curriculum selection or implementation.

Performance

Increase pay for teachers who make a difference in students' learning outcomes.

Examples:

Gains in student test scores.

Gains in attendance or measures of engagement.

Other measures of success.

1 Pay for Position

One approach is to vary pay to attract seasoned, effective educators to teaching positions that have been persistently difficult to fill. The devil is always in the details, but repeated studies suggest that it can work. For example, in 2026 the National Bureau of Economic Research (NBER) released long-term findings of a high-profile incentive program in Dallas:

2 Pay for Demonstrated Skills

Like many states, California has used financial incentives to address shortages of teachers with the proper credentials to teach students with special education needs. The 2021 budget, for example, funded tuition fellowships for aspiring teachers who committed to work in shortage areas, including special education.

National Board Certification is a voluntary credential teachers can earn by submitting evidence of their teaching and completing assessments of their professional knowledge and skills. Teachers receive feedback as part of the process. Some districts award additional pay to teachers with this certification. Research has affirmed that Board-certified teachers probably produce slightly greater student learning gains, but it is unclear why. The certification process might make teachers more effective, or it might just identify teachers who were effective already. Either way, the measurable effect on students is minimal.

California offers National Board Certified teachers $5,000 per year for up to five years if they teach or coach in a high-priority school.

3 Pay for Added Responsibilities

Under many district contracts, teachers can earn additional compensation if they take on additional work like coaching, mentoring, playground monitoring, or specific administrative responsibilities. In the past, some teachers have taken on extra paid work in their final years before retiring because doing so could dramatically pay off in higher lifetime pension payments. In 2027 the state pension fund, CalSTRS, adjusted its rules to clarify that stipends do not apply to final compensation calculations.

4 Pay for Results

The most controversial form of differentiated compensation is performance pay, sometimes called merit pay, a term that teachers tend to dislike. Pay-based incentives are fairly common in business, especially in sales roles. Many businesspeople regard it as self-evident that teacher pay should vary with performance, too.

Many teachers find pay-for-performance incentives patronizing. If teachers were in it for the money, they would choose another line of work, right?

In 2009, Daniel Pink brought attention to the motivational risks of pay-for-performance incentives in his bestseller Drive: The Surprising Truth About What Motivates Us. Pink emphasizes mastery, autonomy, and purpose as important sources of intrinsic motivation. He presents evidence that conditional pay incentives interfere with that drive, leading to worse outcomes. Ed100 Lesson 2.6 discusses motivation in more detail.

So… does teacher merit pay work? Short answer: No!

Incentives that tie teacher pay to results have been tried many times, occasionally at large scale, with consistently bad results. Under the Bush Administration, the Teacher Incentive Fund supported programs that included performance-pay components. Under the Obama Administration, Race to the Top and the School Improvement Grant Fund also supported changes in teacher compensation and evaluation.

Merit-pay experiments have proved consistently disappointing. Studies in the USA and other developed countries have found no compelling connection between teacher bonuses and durable improvements in day-to-day teaching or student outcomes. An earlier OECD review reached similarly cautious conclusions.

One possible exception emerged in a study in Washington, D.C.. The IMPACT system, a multi-faceted program to remake schools in the city, included a significant incentive that encouraged low-performing teachers to leave. It worked. They left. Bruce Baker, a professor at Rutgers University, questioned whether that should count as a positive result.

How do other states approach teacher compensation?

Teacher compensation laws are broadly set at the state level, but implemented through contracts at the local level. The National Center for Teacher Quality (NCTQ), which tracks teacher contracts in large districts, released a National Overview report in 2026. It found that few require districts to consider teacher performance, but many require teachers to earn advanced degrees. Although there is thin evidence that state-driven performance pay incentives accomplish anything, NCTQ tracks policies in this area carefully. Among large states, Texas is the most accommodating to local performance pay incentives for teachers, and California is least accommodating.

How should California improve teacher compensation?

As explained in Ed100 Lesson 1.1, every developed country on earth hires teachers and operates public schools. They do so because it works — and the alternative is terrible. Education is the ladder that enables young people to climb to their role as adults in society. Learning is difficult, human work. Kids do it for human reasons — especially because a teacher expects it of them and helps them succeed at it. To be effective, education systems need lots of capable teachers and capable leaders.

Teaching is a job.

Teaching is a job. It can be a deeply meaningful job — but if it doesn't pay enough, talented people will find other options.

As explained in Ed100 chapter 8, California's education system relies on funding from state taxes — especially income taxes, which can zigzag dramatically from year to year. Through collective bargaining, school districts and unions negotiate steady terms of employment for teachers, including salaries. There is a systemic tension between steady pay and volatile funding.

To cushion the impact of downturns, the state of California sets aside reserve funds in good years. Districts can set aside reserve funds, too, within limits. If these measures aren't sufficient to sustain funding commitments in a lean year, some contracts include rules for who to lay off when money runs out. Ed100 examines the implications in Lesson 3.10, about seniority and tenure.

For decades, the single salary schedule has emphasized predictability and a certain kind of fairness. Teachers might not be happy about their pay, but they understand it. It isn't capricious, and it's not as if some teachers are getting rich at the expense of others. The existing step and lane system creates incentives for teachers to spend time and money accumulating college credits that appears not to help students. Districts and unions already have the authority they need to stop doing it.

Updated October 2026