Is $20 Dollars an Hour Good Pay? How Much is it Per Yr?

Perhaps you’ve just come across a job listing or been offered a job that pays $20 an hour, and it’s time to crunch the numbers.

20 dollars an hour is how much a 12 months?

What about per thirty days, week, and day?

How much might you be left with after taxes?

Is $20 an hour different if you happen to’re a freelancer vs. a W-2 worker for an organization?

Let’s dive into these questions and more details about how well you is likely to be doing with a $20/hr job.

$20 Dollars an Hour Is How Much a Yr? (+ Day, Week, Month)

Let’s assume you’re working full-time, meaning 8 hours a day, 5 days every week, 52 weeks a 12 months (including paid vacation time). We will use some easy multiplication to calculate how $20/hr adds up over every time period:

• Day by day: $20 x 8 hours = $160 a day
• Weekly: $160 a day x 5 days = $800 every week
• Monthly: $800 every week x 4.33 (the common variety of weeks per thirty days) = $3,466 a month
• Yearly: $800 every week x 52 weeks = $41,600 a 12 months

These are all of the gross figures, meaning they’re what you earn before taxes are taken out.

Your specific tax rates will vary depending on where you reside, whether you’re filing jointly or singly, what deductions you qualify for, and so forth. 25% is usually a great ballpark figure to estimate for federal and state taxes.

Using that 25% number, we are able to multiply our previous figures by the remaining 75% to work out about how much take-home pay you possibly can expect after taxes while you earn $20 an hour:

• Day by day: $160 x 75% = $120 take home
• Weekly: $800 x 75% = $600 take home
• Monthly: $3466 x 75% = $2,600 take home
• Yearly: $41,600 x 75% = $31,200 take home

You should use a U.S. tax calculator to more specifically estimate how much to expect in taxes.

Note that if you happen to’re earning $20/hr as a freelancer, you’ll pay much more, because you’re answerable for all of your FICA taxes as a substitute of getting those covered by an employer.

Personally, I normally put aside more like 1/3 of my income for this reason. (Learn more about self-employment taxes from the IRS here.)

Is $20 an Hour a Good Wage?

Within the 2023, is $20 an hour a good, livable wage? The reply here is each easy and sophisticated: it depends. 

The largest factor is solely where you reside. When you’re a digital nomad living in Thailand and making $20 US, you possibly can live in luxury in a penthouse apartment.

When you live in Billings, you possibly can probably afford a mortgage on a good house.

But if you happen to live in Baltimore or San Francisco, $20 an hour will probably get you a closet with six roommates. 

Let’s have a look at an example monthly budget for somebody making $20 an hour. Since housing is one in every of the largest expenses, we’ll start there, using the rule of thumb that you just shouldn’t spend greater than 30% of your gross monthly income on housing.

We’ll also budget in 15% on savings—you possibly can all the time save greater than this if you happen to’re able, but consider saving and investing as a priority, not only “whatever I even have left after my spending.” That’s money you’re paying to your future self to make your life higher!

Net Monthly Income: $2,600 

• Housing: $1000
• Savings: $290
• Automotive payment: $350
• Utilities: $200
• Insurance: $200
• Food: $200
• Phone: $20
• Discretionary: $340 (entertainment, recent clothes, personal and household hygiene, extra savings, etc.)

Depending on where you reside, this sort of budget might sound extremely doable, or it would feel like there’s not much wiggle room. Affording the whole lot and managing to avoid wasting shall be loads easier if you could have a dual-income household.

Two individuals who each work full-time and earn $20 dollars an hour have a net take-home of $5,200, which is a fairly solid amount for living well in most places!

The best way to Save Money & Earn More

Trying to stretch that $20 an hour wage so far as you possibly can so you possibly can live well and bump up your savings rate? It’s totally possible if you happen to’re determined enough!

Try these ideas to chop your expenses drastically. 

When you can only strip your budget down thus far and you possibly can’t discover a job paying greater than $20 an hour, consider supplementing your work with side gigs on nights or weekends.

This will be so simple as doing surveys on Swagbucks whilst you watch TV, or walking dogs through Rover on Saturday mornings, and even starting your personal business. Try 114 side hustle ideas here!

TL;DR: When you just got here for the short answer to 20 dollars an hour is how much a 12 months? Answer: $41,600 before taxes.

Is $20 per hour a great wage where you reside?