If you currently make $15 an hour, you might be wondering what you’re really making in terms of annual income, and, more importantly, if it’s a sustainable amount to live comfortably on.
Knowing this will help you spend your money wisely and budget so your future is safeguarded and your money goals are met.
In this article, we’ll explain how much your $15 an hour wage adds up to yearly, including a full breakdown and everything you need to know about living off this sum.
How Much Is $15 An Hour A Year?
As an annual salary, $15 an hour comes to $31,200, assuming that you are working an average of 40 hours a week.
As the average work week is 40 hours and you are allowed to work 52 weeks a year, yearly you will be working 2,080 hours in total. If we multiply the hourly salary of $15 by 2,080, we are left with $31,200, which would be your gross income before taxes, 401(k), insurance, and any other similar expenses.
If you work part-time, then, of course, your annual gross income will be less. Assuming you’re working 20 hours a week, as per the average part-time hours, for $15 an hour, this brings your salary to $15,600.
How Much Is It After Taxes?
As someone who makes $31,200 a year, you’ll pay around 18.4% of this annual salary in federal, state, medicare, and social security taxes.
This brings your annual net income to around $25,450 if you earn a $15 an hour wage.
As for part-time workers, you’ll pay about 16.3% in taxes, bringing your take-home income to $13,051 a year.
Full Breakdown
To help you understand your income better, we’ve broken down your gross income so you can see how much you make daily, weekly, bi-weekly, and monthly, for both part time and full time hours.
Full Time
Daily
Your daily income depends on how many hours you work during your shift. For this example, we’ll assume that you work the average of 8 hours a day.
- 8 hours x $15 per hour = $120 per day
Weekly
This is good to know for those who are lucky enough to get paid weekly! Again, we’ll assume that you’ve worked 40 hours in your working week.
- 40 hours x $15 = $600 per week
Bi-Weekly
To find out your bi-weekly sum, just take your average weekly pay of $600 and multiply it by 2.
- $600 per week x 2 = $1,200 every two weeks
Monthly
As some months are longer than others, your monthly pay can vary, however this sum would be the average amount of gross income you’d earn each month.
- $31,200 12 months = $2,600 per month
Part Time
Daily
Your daily income depends on how many hours you work during your shift. For this example, we’ll assume that you work the average of 4 hours a day.
- 4 hours x $15 per hour = $60 per day
Weekly
This is good to know for those who are lucky enough to get paid weekly! Again, we’ll assume that you’ve worked 20 hours in your working week.
- 20 hours x $15 = $300 per week
Bi-Weekly
To find out your bi-weekly sum, just take your average weekly pay of $300 and multiply it by 2.
- $300 per week x 2 = $600 every two weeks
Monthly
As some months are longer than others, your monthly pay can vary, however this sum would be the average amount of gross income you’d earn each month.
- $15,600 12 months = $1,300 per month
Can You Live On $15 An Hour?
Living on minimum wage, or around that amount, can be quite difficult, but it is doable.
The issue with a low wage is that people feel like they’re stuck in a cycle of living paycheck to paycheck, not being able to increase their savings, or enjoy the finer things in life. The constant struggle to keep up with expenses and bills can result in a complacent mindset of accepting the hardship.
If you feel this way, then it’s time to change your money habits and start putting some structure in place to live comfortably and achieve your financial goals. To help you do this, we’ve put together some amazing tips to help you make the most of your income.
Top Tips For Living On $15
It may seem like a daunting task to change your money habits and lifestyle, but once you start, you’ll see a difference very quickly!
Here are our top tips for living on $15 an hour.
Spend Less Than You Make
You need to start by learning how to spend less than you make. If you don’t, you are likely to be caught in the cycle of debt, continuing to live paycheck to paycheck.
To break this cycle, you need to make sure your expenses don’t add up to more than your take-home income. This means taking into account the taxes that come out of your paycheck.
From this net income, you need to spend in a way which means that you’ll have money left over.
Make Saving Money Fun
Believe it or not, saving money can actually be fun! You could try the 100 envelope challenge trend, or participate in the no spend challenge. Whatever you choose, you should have fun with it.
You can even get family and friends involved as well; for example, you could take turns hosting a dinner party where you make a home-cooked meal, rather than ordering takeout.
There are also some fun things you can do for free if you know where to look, so you’ll literally be having fun while saving those precious dimes.
Find Ways To Make More Money
If you feel like your income is still not enough despite your money-saving efforts, you could find ways to make extra money.
This could be a side hustle, a second job, more hours, or a whole new career. There are plenty of options for you to choose from, so read on to find out about them in more detail.
Live Somewhere With No State Taxes
Taxes take out a significant portion of your wages, and some states have higher taxes than others.
But, you might be surprised to know that some states don’t charge income tax on wages! This means you’ll have a higher net income and more money to live on if you live in one of these states, or choose to move to one of them.
The states where you don’t have to pay income tax include:
- Alaska
- Nevada
- New Hampshire
- Florida
- Tennessee
- Washington
- Wyoming
- South Dakota
- Texas
You should also consider which states have a higher income tax of between 7.65% and 13.3%. These states include:
- California
- New Jersey
- Oregon
- Hawaii
- Minnesota
- New York
- Iowa
- Wisconsin
- Vermont
- District of Columbia
Create A Budget And Stick To It
Creating a budget for your income is a great way to save and spend freely. It can be difficult, but if you stick to it, you’ll see your savings grow and your lifestyle improve.
There are tons of budgeting resources available where you create a budget and use it right. This way you’ll have enough money for emergencies, to save up for a home or car, or to pay off debt.
Prioritize Paying Off Debt
Soaring interest rates and mounting debt can make you feel like you’re in a financial choke hold. Clear any debt you have can help you change your money mindset and management.
Using a budget, you can save money each month and put it towards minimum payments to keep the bank happy and your credit score in check. Once it’s paid off you’ll be able to start saving for things that matter to you.
Increasing Your Income
If you want to increase your income so you have more money at your disposal, there are a number of ways you can do so.
Here are some options for earning extra income alongside your $15 an hour.
Ask For a Raise
It’s not easy to do, but asking for a raise could be a good option, especially if you’ve been working especially hard.
If you approach this conversation with your boss in a tactful, passionate, and informed manner, your chances of getting that raise will definitely increase. And at the end of the day, the worst they can say is no!
Find A New Job
Finding a new job might be the solution to increasing your income. If you know you’re good at what you do, then finding a job that pays more in the same sector is completely doable.
For example, if you’re a waitress in a restaurant and have plenty of experience and skill, you might be able to find a job as a manager in another restaurant for higher pay. You might even be able to get a promotion in your current job!
Make A Complete Career Change
The fact is that some industries simply pay more than others; a cashier will never make as much as a doctor!
It might be time for a change of career path if you feel like the money you’re earning just isn’t enough. Consider your skills and what training you can do to start the career you want. You might even be able to go back to school and start chasing your dream!
Start A Side Hustle
In this day and age, there are more and more ways to make money alongside full-time work. So, consider starting a side hustle; this could be a hobby you turn into profit, or picking up some freelance jobs on the side.
There are plenty of opportunities to earn, especially if you have plenty of skills. If you have an artistic streak, then sell your art on Etsy! If you’re a good writer, look for freelance writing jobs! The possibilities are endless!
Final Thoughts
While living on a $15 an hour wage is not ideal, you can make the most of your money by structuring your finances and making wise financial decisions so you won’t have to live paycheck to paycheck and even have some money left over!
Use our top tips to help you achieve your money goals and start living comfortably on $15 an hour.
As a current Mortgage Underwriter with 15 years of experience, I have seen my fair share of money-related issues. Whether that be high levels of debt, not enough credit, or simply a lack of funds - I’ve had clients who fit into these categories.
Here I will share tips, tricks, and experiences on how you can get yourself back in control of your finances.
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