A review of a few input-output models indicates the importance of teacher ability, which may be independent of years of training, for improving pupil performance. A historical analysis confirms the substantial pay increases experienced by teachers in the mid-1990s, moderate pay increases in real terms since 1996, and a falling ratio of teacher pay to GDP per capita. Analysis of Labour Force Survey data reveals that in 2007 teachers were paid less than other professionals, even if the comparison is made conditional on a number of non-pay variables. Working hours is not used as a conditioning variable, however, and low pupil performance levels suggest that the average productivity of teachers is not high. In 2007 the age-pay slope for teachers was flatter than that for other professionals. The impact of the 2008 changes to the teacher pay system are considered. These changes initiate a gradual closing of the pay gap between teachers and other professionals, and convert a rather flat age-pay slope for teachers into one that compares favourably to that of other professionals, and to those of teachers in other countries. The fact that the new system links progression up the salary scales to the behavioural input characteristics of teachers is line with good practice elsewhere, but the linking of pupil performance to teacher pay is probably best undertaken collectively at the level of the school. The teaching hours put in by teachers compares favourably to those in other countries, yet the utilisation of teacher time in many schools is not optimal, resulting in class sizes that are unacceptably high.