Purpose: This study examined the impact of disparitiesin welfare packages among different categories of teachers on job satisfaction, morale, and teamwork in Oyo East Local Government, Oyo State, Nigeria, with particular attention to equity concerns in teacher welfare distribution. Methodology: Grounded in Equity Theory (Adams, 1965) and Social Exchange Theory (Blau, 1964), the study adopted a descriptive survey research design. A sample of 225 teachers was selected through stratified random sampling from primary and secondary schools. Data were collected using structured questionnaires validated by educational research experts (Cronbach's alpha = 0.82). Descriptive statistics and simple regression analysis were employed at the 0.05 significance level. Findings: Results showed that 74.7% of teachers believed welfare package disparities influence overall job satisfaction, with 40.9% indicating significant influence. Regression analysis demonstrated that disparities significantly predicted job satisfaction (beta = 0.708, p < .001), explaining 58.4% of variance (RZ = .584). A substantial majority of 78.7% of teachers reported that disparities significantly affect overall morale and teamwork, with only 4.0% reporting no discernible impact. Practical Implications: Perceived inequity in welfare distribution substantially undermines teacher satisfaction and organisational cohesion, requiring equitable welfare policies and transparent implementation mechanisms. Originality/Value: This study provides an early empirical examination of welfare disparity impacts on both individual satisfaction and organisational dynamics in a Nigerian local government context, demonstrating that distributional equity matters as much as absolute welfare levels.