What if you receive a job offer that will pay you $15 an hour? The first question that comes to mind is if this is enough to live on for you?
If your wage is $15 an hour, do you know how much this will be per year?
By understanding your annual earnings, you can see the bigger picture to help you make a financial plan. It can also help you know how much tax you should pay to account for what you make per year.
$15 An Hour Is How Much A Year?
Most Americans work a 40-hour week, where they work an 8-hour workday five times per week. Since there are 52 weeks in a year, this translates into 2,080 work hours. That means if you are making 15 dollars per hour, you will be making $31,200 per year.
However, several factors will affect your earnings.
First, we must assume that you will work 2,080 hours to meet the $31,200 per annum. If you don’t report for work or accumulate missed working hours, your total payable hours will decrease.
Bear in mind that we haven’t accounted for taxes and vacation time.
So, what will this salary look like when we factor in the taxes and unpaid time off? But, before digging into that, let’s look at the difference in earnings when working full-time and part-time.
$15 An Hour Is How Much A Year As A Full-Time Salary?
According to the IRS, a full-time employee has a 30 to 40-hour workweek. Working 30 to 40 hours a week will earn you $23,400 to $31,200 annually before taxes.
That is your minimum salary. However, it may increase if you work paid overtime hours for your job, which means your base salary will increase for every additional hour you spend beyond your regular working hours.
If there is a possibility that your take-home pay will increase because of overtime pay, there is also a prospect that your salary will decrease due to unpaid sick leave or unpaid vacation time. But let’s concentrate on being a model employee who does not take breaks or sick leaves.
What would that look like in terms of your paycheck?
Your working hours have a direct and correlating effect on your salary. Simply put, the more you work, the more you get paid. Therefore, extending beyond the number of hours you work means adding more to your take-home pay. Sounds fair, right?
How Much Annual Income Is $15 An Hour For Part-Time Workers?
If you work part-time, your yearly salary will depend on several factors. First, how many hours are you putting in your part-time job?
Let’s assume that you work for an average of 20 hours a week. If you are working 52 weeks in a year, your earnings before tax will be $15,600 ($15 x 20 hours x 52 weeks = $15,600).
Whether you will be working 10 hours, 18 hours, or 24 hours a week, you can use this same equation to calculate your annual earnings:
- For 10 hours per workweek, you’ll earn $7,200 per year
- For 18 hours per week, you’ll earn $14,040 per year
- For 24 hours a week, you’ll earn $18,720 per year
So, the same is valid here. Your working hours directly correlate to how much you earn, and it works both ways in whatever situation or job you come across.
How Much Is $15 An Hour Annually After Taxes?
There is no doubt that taxes can significantly affect your earnings. However, since several factors affect your tax rate, giving you the exact income after tax can be challenging.
However, we can give you a general idea if we assume that you are:
- Get the standard deductions
- Earn the entire $31,200 in a year (worked hours for 52 weeks: 40)
If you earn $15 an hour in 2022, your after-tax hourly salary will be $11.88 to $12.84. The range means it’s different in every state. Therefore your annual salary after taxes will be between $24,700 and $26,700 per annum.
You can see that there is a range of $4,500 to $6,500 between the highest taxed and lowest taxed states.
How about state taxes? The tax you pay will depend on your state. While some states don’t charge taxes, other states charge taxes from 1.10% (in North Dakota) to 7.9 % (in Hawaii) if you have an income of $31,200.
Therefore, if you want to make the most out of your income, you should consider living in a state where the tax is low. Some of the states that do not tax wages are:
- South Dakota
You can also check the 2022 State Income Tax Rates. However, it’s also essential to consider the cost of living in other states and know this will directly affect your take-home pay.
How Much Is $15 an Hour Per Month?
If you work 40 hours a week, you should expect to make $2,600 per month before tax. We get this by dividing the annual income of $31,200 by 12.
If you work part-time for 20 hours a week, your average monthly income is $1,300 before tax.
How Much Is $15 Hourly Wage Per Week?
Working with a weekly budget, you will probably need to understand what a person making $15 can do after seven days.
If you work for 40 hours a week, a quick calculation shows that your weekly income is $600 ($15 x 40 hours) before tax. Likewise, if you work 20 hours a week, you will earn $300 a week before taxes.
How Much Is $15 Per Hour Biweekly?
If you get paid biweekly, you will probably make a biweekly budget, and that is why you may want to know how much you will be earning biweekly.
Calculating your biweekly salary is easy as you only need to multiply your weekly income by two. That means if you are working 40 hours in a week, your biweekly pay is $1,200 ($15 x 40 hrs x 2 weeks) before tax.
How Much Is $15 an Hour Per Day?
While most people don’t get paid a weekly paycheck, it still makes sense to understand your income daily. For example, if you have a full-time job, you most likely work for 8 hours a day, which means your daily income is $120 before tax. However, if you work part-time, like 4 hours a week, your daily income will be $60 before tax, Social Security, Medicare, etc.
What Jobs Pay 15 Dollars an Hour?
According to the Bureau of Labor Statistics, many jobs pay a median salary of $15 an hour. The good news is that these jobs do not require a college degree or even work experience. Some of these jobs are:
- Customer service representatives
- Careers in Real Estate Investment Trusts (REITs)
- Warehouse employees
- Leasing agents
- Library specialists
- Target employees
Can You Live On $15 An Hour?
It’s possible to live on $15 an hour, but this may be hard depending on factors such as your lifestyle, cost of living in your area, and your current personal and financial circumstances.
So, before you accept a job that offers $15 an hour, know these factors to determine if that amount is sufficient for you.
Tips To Live on $15 an Hour
No matter how much you earn, you can only attain financial freedom if you live within your means. The lack of money isn’t the problem at times, but spending your money can impact your entire financial situation. Here are frugal living tips on living on $15 an hour.
- Have a realistic budget
- Live below your means
- Live with roommates
- Save any unexpected money
- Pay off debt
- Start a side hustle
Is $15 An Hour a Good Salary?
A wage of $15 an hour is better than the current federal minimum wage set by the Fair Labor Standards Act. However, it’s almost double the minimum wage rate of $7.25 nationwide workforce, whereas some states have a higher minimum wage like California, New York, Washington, and many others.
Earning an hourly rate of $15 an hour means you still have plenty of potentials to grow. However, it’s advisable to have a budget, spend money wisely, and save as much as possible with your $15 an hour wage.
$15 an hour is a livable wage if you have a small family, but it can be hard to survive if you have a large family with no other source of income. Again, where you live and your ability to budget will be vital if you want to pull it off.
Is $15 An Hour Enough To Buy A House?
As we have already noted, earning $15 an hour will mean that your annual income is $31,200. Roughly, you may qualify to buy a home worth $65,000 to $85,000. If you are a veteran or fall in other special classes, you will not need any down payment.
If not, FHA financing will require you to have a down payment of $2,275-$2,800. You will also need extra cash for closing.
Most lenders will approve a loan depending on the debt to income ratio. The sum of house payments and other debt payments is divided by your gross monthly salary. If your balance is good, your loan will be approved.
But in most areas, you will find it hard to get a property for under $80,000.
If you qualify, you might want to consider house hacking, where you rent out one bedroom of the property to bring in some extra income.
Therefore, you can buy a home when earning $15 an hour as long as you have some savings and are ready to live in areas where these properties are available. You can speak to a real estate agent or a mortgage broker to find out more.
All In All – $15 An Hour Is How Much A Year?
$15 an hour is a respectable amount if you look at the bigger picture. And you’re certainly earning more than minimum wage.
With that said, you still may be struggling to build generation wealth or pay down debt while earning $15 an hour. Plus, the housing marketing is acting up, making it harder to find affordable housing.
Living in a low-cost living area can help you mean ends. Especially if you’re single, have little debt, and have a budget, you will undoubtedly be able to live off of $15 an hour.