As with any other job, pay is a crucial factor in attracting and, more importantly, keeping school principals in their role. But it is not straightforward to work out which countries offer the best pay package. In comparing principals’ pay with that of other professions, one also needs to look into the internal pay scales over a principal’s career. Offering competitive compensation is about providing the financial recognition needed to motivate and keep experienced, effective leaders in schools.

How do we measure principals’ salaries?

There is no global database that monitors school principals’ salaries. The best data set is from the European Union and the OECD covering their member states and a few other European countries. It shows that, in upper-middle- and high-income countries, principal salaries can vary by up to 11 times between countries and up to 2 times by education level.

Comparisons can be made in the following three ways:

Absolute total statutory salaries: In the United States, in primary and upper secondary education, the statutory salary is $96,500 and $103,000 but in Albania only $8,600 and $11,000, respectively. In Mexico, preschool principals earn $27,500 and secondary school principals close to $60,000. In contrast, there are no pay gaps by education level in England, Latvia, Lithuania, Montenegro, Portugal and Scotland.

Relative to other professionals: Preschool principals earn less than other professionals in 5 of the 13 countries with data. At the other education levels, principals are paid at least as well as other professionals in all 17 countries with data except Hungary.

Salary premiums are at least 1.4 times higher than for other professions at all levels in 7 countries: Australia, England, Costa Rica, Ireland, Israel, Italy and Portugal. The highest premium (2.2 times) is offered for upper secondary school principals in England.

Relative to GDP per capita. Pay varies by the education level. Principals’ salaries are, on average, 1.2 times the GDP per capita in pre-primary, 1.4 times in primary, 1.5 times in lower secondary and 1.6 times in upper secondary education.

In lower secondary education, two thirds of these countries maintained or decreased salaries by 7% on average in relative terms between 2016 and 2021. Among the countries that maintained or increased principals’ salaries, three increased them by at least 20%: Czechia, Italy and Latvia.

Many middle-income countries offer significantly higher salaries for school principals. This reflects the relative scarcity of principals’ qualifications in the labour market. However, not all countries offer such a salary and there is much wider variation than in richer countries. In Eswatini and Kenya, principals earn between four and six times the GDP per capita, while principals in El Salvador and Pakistan earn well below the GDP per capita.

Experience pays in some countries, which can make the profession more attractive: in Guatemala and Rwanda, for example, salaries start at about 1.5 times and eventually reach 4.6 times the GDP per capita. In 2022, headteachers earned about 20% more than teachers with 15 years of experience on average in 33 countries, although the gap varied widely by country.

Analysis of Eurydice data suggests that this relationship has shifted slightly in European countries in recent years. In 2016/17, principals’ starting salaries were on average over 25% more than that of teachers with 15 years of experience but by 2020/21, the ratio had fallen to 20%. In Uruguay, in both primary and secondary education, a principal’s salary is about 80% of what a full-time teacher at the highest grade earns, depending on the school’s size, with vice-principals earning even less.

Pay scales and incentive structures vary

School principals’ salary structure is crucial for understanding their career development. In 70% of countries, analysis of the PEER country profiles found that these salaries were based on civil servant pay scales, although this share drops to 48% in high-income countries. Adjustments in public service salaries, therefore, directly impact school principals, potentially posing a challenge to compensating them adequately for their managerial roles and responsibilities.

Principals’ pay scales can be separate from those for teachers or shared. Shared pay scales, i.e. when there is  one pay scale for both teachers and principals, payroll management is simplified, fostering a sense of unity, while also recognizing the principal’s additional workload. However, it can blur the distinction between roles and narrow salary growth and career development opportunities. Such systems are more common in low- and middle-income countries such as Peru and Zambia. In Europe, only nine countries have adopted a unified scale. In Czechia, for instance, preschool principals are higher on the pay scale than teachers at the same level but lower than teachers in primary and secondary education.

Separate pay scales, meanwhile, keep principals’ remuneration distinct from teaching staff. This provides clearer career progression and can motivate teachers to aspire to principal positions.  In Europe, 23 education systems use separate pay scales for school principals. In England, for instance, there are eight levels of school principal pay, explicitly recognizing their leadership and administrative roles.

There are also cases of different pay scales altogether. In a few countries, school principals are not integrated into the government’s payroll system at all. For example, in Somalia, while half are registered under the public payroll, the remainder receives salaries from private sources or international donors such as the World Bank.

Not all countries have fixed compensation schemes. In Chile, the bonus component of wages represents 22% of the principal’s salary in voucher-private schools but only 9% in public schools. In Uzbekistan, school principals’ base salary also depends on the size of the school and the position and category levels. For example, relative to the base salary, school principals received 7% more for schools with 401 to 880 students, and 20% more for schools with more than 1,600 students. In half of the OECD countries with data, school principals receive additional compensation for working in disadvantaged or remote areas. In Finland and in Germany, compensation structure take the local cost of living into account. In the United States, the average annual salary for school principals ranges from $57,000 in Puerto Rico to $149,000 in Washington, DC.

Some countries, such as Malaysia, offer higher salary increments upon completion of leadership qualification programmes.  Principals may be discouraged from obtaining professional training and qualifications if salaries are not paid during the study, however. Singapore tackles this by ensuring participants of its six-month leadership programme receive their full salary during the programme and that all fees are covered by the Ministry of Education.

Countries should invest in school leaders for educational success

The design of pay scales, whether unified with teachers or distinct, and the presence of performance-based incentives and professional development support are crucial. Ensuring that principal salaries adequately reflect the immense responsibilities and skills required for effective school leadership, and that these roles offer clear pathways for career advancement, is paramount. Investing wisely in the financial attractiveness of principals’ positions is a direct investment in the quality of education and, by extension, children’s future.