Perhaps you’ve simply come throughout a job itemizing or been supplied a job that pays $16 an hour, and it’s time to crunch the numbers. 16 {dollars} an hour is how a lot a 12 months? What about per 30 days, week, and day? How a lot may you be left with after taxes? Is $16 an hour completely different when you’re a freelancer vs. a W-2 worker for a corporation? Let’s dive into these questions and extra details about how properly you could be doing with a $16/hr job.
Let’s assume you’re working full-time, which means 8 hours a day, 5 days every week, 52 weeks a 12 months (together with paid trip time). We will use some easy multiplication to calculate how $16/hr provides up over every time interval:
- Day by day: $16 x 8 hours = $ 128 a day
- Weekly: $128 a day x 5 days = $640 every week
- Month-to-month: $640 every week x 4.33 (the typical variety of weeks per 30 days) = $2771.2 a month
- Yearly: $640 every week x 52 weeks = $33280 a 12 months
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These are all of the gross figures, which means they’re what you earn earlier than taxes are taken out. Your particular tax charges will range relying on the place you reside, whether or not you’re submitting collectively or singly, what deductions you qualify for, and so forth. 25% is mostly an excellent ballpark determine to estimate for federal and state taxes.
Utilizing that 25% quantity, we will multiply our earlier figures by the remaining 75% to determine about how a lot take-home pay you’ll be able to anticipate after taxes if you earn $16 an hour:
- Day by day: $128 x 75% = $96 take residence
- Weekly: $640 x 75% = $480 take residence
- Month-to-month: $2771.2 x 75% = $2078.4
- Yearly: $33280 x 75% = $24960
You should utilize a U.S. tax calculator to extra particularly estimate how a lot to anticipate in taxes. Observe that when you’re incomes $16/hr as a freelancer, you’ll pay much more, because you’re liable for all of your FICA taxes as a substitute of getting these lined by an employer. Personally, I normally put aside extra like 1/3 of my revenue due to this. (Be taught extra about self-employment taxes from the IRS right here.)
In 2022, is $16 an hour an honest, livable wage? The reply right here is each easy and complex: it relies upon.
The most important issue is just the place you reside. If you happen to’re a digital nomad residing in Thailand and making $16 US, you’ll be able to reside in luxurious in a penthouse condominium. If you happen to reside within the Midwest US, you’ll be able to in all probability afford a mortgage on an honest home. However when you’re in a metropolis like New York or San Francisco, $16 an hour will in all probability get you a closet with six roommates.
Let’s have a look at an instance month-to-month price range for somebody making $16 an hour. Since housing is likely one of the largest bills, we’ll begin there, utilizing the rule of thumb that you simply shouldn’t spend greater than 30% of your gross month-to-month revenue on housing. We’ll additionally price range in 15% on financial savings—you’ll be able to all the time save greater than this when you’re ready, however consider saving and investing as a precedence, not simply “no matter I’ve left after my spending.” That’s cash you’re paying to your future self to make your life higher!
Internet Month-to-month Earnings: $2078
Is 16 {dollars} an hour good?
Relying on the place you reside, this type of price range might sound extraordinarily doable, or it would really feel like there’s not a lot wiggle room. Affording every thing and managing to save lots of will probably be quite a bit simpler if in case you have a dual-income family.
Two individuals who every work full-time and earn $16 {dollars} an hour have a web take-home of $4157, which is a fairly strong quantity for residing properly in most locations!
Seeking to stretch that $16 an hour wage so far as you’ll be able to so you’ll be able to reside properly and bump up your financial savings fee? It’s completely doable when you’re decided sufficient! Take a look at these 72 ideas to economize.
If you happen to can solely strip your price range down to this point and you may’t discover a job paying greater than $16 an hour, think about supplementing your work with aspect gigs on nights or weekends. This may be so simple as doing surveys on Swagbucks when you watch TV, or strolling canine by Rover on Saturday mornings, and even beginning your personal enterprise. Take a look at 114 aspect hustle concepts right here!
TL;DR: If you happen to simply got here for the brief reply to 16 {dollars} an hour is how a lot a 12 months? Reply: $33280 earlier than taxes.
