Last updated Sep. 15, 2023 by Jessica Green
If you earn on an hourly basis, it is important to know how to calculate your monthly and annual income. Knowing your yearly income helps you understand how to plan and use your finances efficiently.
This article guides you on calculating your annual income if you earn $20/hour, $18/hour, $21/hour, and more.
How Much Is $20 An Hour In A Year?
It is estimated that an average individual works 40 hours a week. With that, making $20 per hour is assumed to earn you around $800 per week. At this rate, your monthly earnings will be approximately $3,200, and your annual gross earnings will amount to $41,600.
Thus, if you earn $20 an hour, your annual income is estimated to be $41,600 – this is based on the assumption that you work 40 hours in all 52 weeks in a year with no overtime or time off.
If you work part-time, your total working hours in a week is assumed to be 20. Hence, you will likely earn $400 per week, which equals $20,800 annually if you work for 52 weeks.
The amount you’re likely to earn if you make $20 per hour depends on the total number of hours you work weekly, earnings from overtime, paid or unpaid time off work, and more.
Note: If you earn $20 per hour and work 40 hours a week for 52 straight weeks, your annual income will be $41,600 – this is your income before tax. To determine your take-home pay, subtract your tax deductions from your gross yearly income.
How Much Is $500 A Month Per Hour?
If you earn $500 monthly, here’s how to calculate your hourly wage.
Firstly, calculate your weekly wage. To do this, divide $500 by the number of weeks in a month. Therefore, 500÷ 4 = 125. Thus, it is estimated that you earn $125 per week
Proceed to divide your weekly salary by the number of hours you work in a week. If you work 40 hours per week, 125 divided by 40 is 3.125.
Thus, if you earn $500 in a month and work 40 hours per week, it is estimated that your hourly wage is $3.125
How Much Is $20 An Hour In A Year After Taxes?
The United States tax system breaks each individual’s income into brackets, each with a tax rate. For example, if your annual income equals or below $10,275, the tax rate on your income becomes 10%.
However, if your annual income ranges from $10,275 to $41,775, 12% is taxed on you. As someone who earns $20/hour, your yearly income falls under the $10,275 to $41,775 bracket. Thus, you will be taxed 12% of your annual income.
$20 per hour in a year generates $41,600. A 12% tax rate of $41,600 = $4,992. Thus, $4,992 is the amount you pay in tax. To determine your take-home tax, subtract $4,992 from $41,600 – this becomes $36,608.
Thus, if everything remains equal, your take-home pay after tax if you earn $20/hour is $36,608. But this isn’t the reality of things.
Most states in the US charge state, Medicare and social security taxes. For example, if you are based in Kentucky and earn $20 an hour, which is $41,600 annually, here’s how your take-home pay is calculated:
Gross Income = $41,600
Federal Tax (12%) = $4,992
State Tax (5%) = $2,080
SS and Medicare (7.65%) = $3,182
Total Tax Payment = $10,254
Take-home Pay = $41,600 – $10,254 = $31,346
9 States With No Income Tax
The following states in the US do not charge state income tax on its residents
- New Hampshire
- South Dakota
States That Charge A Flat Tax Rate
- Colorado 4.55%
- Illinois 4.95%
- Indiana 3.23%
- Kentucky 5%
- Massachusetts 5%
- Michigan 4.25%
- New Hampshire 5% on dividend and interest income only
- North Carolina4.99%
- Pennsylvania; 3.07%
- Utah 4.95%
US States With High Income Tax
- Wisconsin 7.65%
- Vermont 8.75%
- Minnesota 9.85%
- Oregon; 9.9%
- New Jersey 10.75%
- District of Columbia 10.75%
- New York10.9%
- Hawaii 11%
- California 12.3%
So, if you are based in a state like Hawaii, do not expect to have the same take-home pay as someone who lives in a state with lower or no state tax.
5 Tips To Live On $20 An Hour
Living expenses are currently on the high. And if you earn $20 an hour, you may find it difficult to live the comfortable life you want for yourself. Here are five tips on how to live on a $ 20-per-hour wage.
Pick Up A Side Hustle
Living on a $20/hour income is difficult if you have a family to care for. Hence, it is advisable to join a side hustle to supplement your income.
There are tons of available side hustles that pay well. Most include freelancing, online selling, blogs, YouTubing, graphics designing, and more. You can decide on any of them based on your interest.
Most side hustles like freelancing pay more than $20/hour and come with a flexible schedule.
Suppose your main job does not provide you enough time for side hustles. In that case, you can earn money from participating in paid survey sites like SurveyJunkie and Swagbucks – these sites allow you to make money by sharing your opinion on a subject.
Another Interesting Article: 30 Best Side Hustles To Start With $100
Create An Effective Budget
One of the best ways to live on a $20/hour income is by creating an effective and realistic budget. Creating a budget gives you insight into all your weekly or monthly expenses. It also allows you to discover what triggers you to make expenses.
Additionally, with an effective budget, you can keep track of all your expenses and ensure you’re not spending on unnecessary items.
Once you create a budget and stick to it, you will tend to avoid debts and live within your means.
Minimize Your Cost Of Living
To live comfortably on a $20 per-hour income, you need to cut down on all your expenses and focus on the important things you need.
Shop only for necessary items, avoid buying luxurious or branded items, haggle prices with sellers, buy durable items, and always check out items in other stores to find out if it is offered at a lower price.
Save And Invest
Making savings and investments is one of the ways to build wealth. To live on a $20/hour income, you must be ready to divert all your surpluses into savings. Once you save up enough, invest them to earn more and build up wealth.
In order to make savings, you have to create an effective budget, avoid impulse spending, and automate your savings process.
Another Interesting Article: 10 Best Money-Saving Apps for Shopping
Use Cashback Apps And Other Money-Saving Tools
It is impossible to avoid spending on groceries. Hence, it is advisable to use cashback applications when making a purchase. Cashback apps enable you to earn back a percentage of the amount spent on an item. In this way, you can cut down on your expenses.
Cashback apps like Rakuten, Ibotta, Dosh, and more are affiliated with many brands and stores; hence, there’s a high chance you’ll receive cashback for every item you purchase.
3 Ways To Increase $20 Hourly Wage
If a $20 hourly wage seems too low for your lifestyle, here are ways you can increase it:
Ask For A Pay Raise
One of the ways to increase your $20 hourly wage is by requesting a pay raise. But before approaching your boss for a pay raise, ensure you are a diligent worker. There’s a high chance your request will be turned down if you have nothing to offer to your employer.
Thus, improve your work performance and wait for the appropriate time to request a raise. Ensure to be professional when making the request.
Search For Another Job
If your current job does not accept your request for a pay raise, you can quit the job to search for a better job with a better payment rate.
Getting a new job is one of the best ways to increase income. Search for businesses that pay more than your current employer, and send an application. If you have a good qualifications and experience, you can negotiate a good payment rate with your employer.
Note: Getting a new job is harder than you think. Ensure you receive a letter of acceptance from your new employer before quitting your current job.
Have Multiple Sources of Income
Another way to increase your income is by having a side hustle. Most people who earn $20/hour have multiple sources of income. Hence, find a side hustle suitable for you and invest your time in it.
If your main job does not offer you the flexibility you need to carry out a side hustle, look into passive sources of income. You can sell digital products, participate in online surveys, join focus groups, or own a dropshipping business.
If you have marketable skills, you can freelance it.
How To Calculate Your Annual Salary
Knowing the amount you make in a year is important as it allows you to create a budget and control your financial life.
If you are paid hourly, note the number of hours you spend working in a week – this enables you to estimate your annual salary.
To calculate how much you earn a year, multiply your hourly wage by the number of hours you work a week. The result of this calculation is your weekly salary. Since there are 52 weeks a year, multiply your weekly salary by 52 to get your annual salary.
When making this calculation, take note of your overtime payments and add them to your annual salary. It is also important to consider your sick and off days as they can reduce your yearly salary.
Here’s an example to help you understand how to calculate annual salary:
If you make $15 per hour and work an average of 40 hours per week.
$15 × 40 = 600.
Thus, it is estimated that you earn $600 per week. To get your annual income, multiply $600 by the 52 weeks in a year.
$600 × 52 = 31,200
Thus, it is estimated that you earn $31,200 every year. To estimate your annual income accurately, add your overtime payments to $31,200 and subtract unpaid leave from $31,200.
What Salary Can I Live On?
The minimum salary you can comfortably live on depends on your state and country. But on a general note, an average annual net income of $57,013 is required to reside in any US state comfortably. Net income is your real income substracted by tax deductions.
While you need about $46,864 annual salary to live comfortably in states like Missouri and Illinois, you need $74,282 to live comfortably if you stay in California – this is due to the high cost of living in states like California.
Aside from the state you reside in, other factors like the size of your family, your life stage, and more can affect how much salary you need to live on.
Calculating your annual income provides you with insight into the status of your financial life. Once you’ve gained insight into your financial position, you can effectively create a budget that makes life comfortable.
Frequently Asked Questions
How Much Is 100k A Year Hourly?
If you earn $100,000 annually, you can calculate your hourly wage by dividing $100,000 by 52 weeks in a year. $100k divided by 52 results in $1,923, your weekly income. To get your hourly wage, we say $1,923 divided by 40 working hours in a week, resulting in $48. Hence, if you earn $100,000 yearly, your hourly wage is $48.
What Is $20 An Hour Annually?
$20/hour annually is $41,600. To calculate this, multiply $20 by the weekly work hours (20×40=800) to get your weekly wage. Afterward, multiply your weekly wage by the number of weeks in a year. Thus, 800×52 is equal to $41,600.
25 An Hour Is How Much In One Year?
Making $25 an hour will earn you $52,000 on an annual basis. To calculate this, multiply $25 by your average weekly working hours ($25×40= $1000) to get your weekly salary. Proceed to multiply your weekly wage by the number of weeks you work in a year ($1000×52= $52,000). Hence, if you earn $25 per hour, your annual income estimate is $52,000.
How Much Is $18 An Hour In A Year?
$18 hourly wage in a year is $37,440. To calculate this, multiply $18 by the number of hours you work in a week to get your weekly wage (18×40= $720). Proceed to calculate your annual income by multiplying your weekly wage by the number of weeks you work in a year ($720×52= $37,440).
$21 An Hour Is How Much In A Year
To calculate your annual income when you earn $21 per hour, you have to multiply $21 by the number of hours you work in a week ($21 × 40= $840) to get your weekly income. Afterward, multiply your weekly income by the number of weeks in a month to get your annual gross income ($840 × 52 = $43,680). Thus, if you make $21 per hour, you will make a yearly income of $43,680.
How Much is $30 Per Hour In A Year
To calculate your annual income when you earn $30 per hour, you must multiply $30 by the number of hours you work in a week ($30 × 40= = $1,200) to get your weekly income. Afterward, multiply your weekly income by the number of weeks in a month to get your annual gross income ($1,200 × 52 = $62,400). Thus, if you make $30 per hour, you will make a yearly income of $62,400.