Possibly 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 thirty days, week, and day? How a lot would possibly you be left with after taxes? Is $16 an hour completely different should you’re a freelancer vs. a W-2 worker for an organization? Let’s dive into these questions and extra details about how nicely you is perhaps 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:
- Every 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 thirty 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 fluctuate 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 usually an excellent ballpark determine to estimate for federal and state taxes.
Utilizing that 25% quantity, we are able to multiply our earlier figures by the remaining 75% to determine about how a lot take-home pay you may anticipate after taxes once you earn $16 an hour:
- Every day: $128 x 75% = $96 take house
- Weekly: $640 x 75% = $480 take house
- Month-to-month: $2771.2 x 75% = $2078.4
- Yearly: $33280 x 75% = $24960
You should use a U.S. tax calculator to extra particularly estimate how a lot to anticipate in taxes. Be aware that should you’re incomes $16/hr as a freelancer, you’ll pay much more, because you’re answerable for all of your FICA taxes as a substitute of getting these lined by an employer. Personally, I often 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 a good, livable wage? The reply right here is each easy and sophisticated: it relies upon.
The most important issue is solely the place you reside. In the event you’re a digital nomad dwelling in Thailand and making $16 US, you may reside in luxurious in a penthouse condominium. In the event you reside within the Midwest US, you may most likely afford a mortgage on a good home. However should you’re in a metropolis like New York or San Francisco, $16 an hour will most likely get you a closet with six roommates.
Let’s take a look at an instance month-to-month finances for somebody making $16 an hour. Since housing is among the greatest bills, we’ll begin there, utilizing the rule of thumb that you just shouldn’t spend greater than 30% of your gross month-to-month revenue on housing. We’ll additionally finances in 15% on financial savings—you may all the time save greater than this should you’re in a position, 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!
Web Month-to-month Earnings: $2078
Is 16 {dollars} an hour good?
Relying on the place you reside, this sort of finances might sound extraordinarily doable, or it would really feel like there’s not a lot wiggle room. Affording the whole lot and managing to avoid wasting 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 internet take-home of $4157, which is a fairly strong quantity for dwelling nicely in most locations!
Trying to stretch that $16 an hour wage so far as you may so you may reside nicely and bump up your financial savings charge? It’s completely potential should you’re decided sufficient! Try these 72 suggestions to save cash.
In the event you can solely strip your finances down to this point and you’ll’t discover a job paying greater than $16 an hour, take into account supplementing your work with facet gigs on nights or weekends. This may be so simple as doing surveys on Swagbucks when you watch TV, or strolling canines by Rover on Saturday mornings, and even beginning your personal enterprise. Try 114 facet hustle concepts right here!
TL;DR: In the event you simply got here for the brief reply to 16 {dollars} an hour is how a lot a 12 months? Reply: $33280 earlier than taxes.
