February 3, 2023

Money News PH

The Premier Blog Where Money Talks

$30 an hour is how much a year? Is $30/hour good in 2021?

Maybe you’ve just come across a job ad or been offered a job that costs $30 an hour and it’s time to analyze the numbers. $30 an hour is how much a year? What about per month, week and day?

TL;DR: If you came up with $30 an hour just because of the short answer, how much is a year? Answer: $62,400 before taxes.

How much do you have left after taxes? Is $30 an hour as a freelancer any different than being a W-2 employee for a company? Let’s dive into these questions and more information on how well you could do at a $30 an hour job.

Let’s say you work full-time, which is 8 hours a day, 5 days a week, 52 weeks a year (including paid vacation time). We can use a simple multiplication to calculate how $30/hour adds up over each period:

Daily: $30 x 8 hours = $240 per day Weekly: $240 per day x 5 days = $1,200 per week Monthly: $1,200 per week x 4.33 (the average number of weeks per month) = $5,196 per month one year

These are all gross figures, meaning you earn before taxes are deducted. Your specific tax rates will vary depending on where you live, whether you file jointly or individually, what deductions you qualify for, and so on. 25% is generally a good guideline for federal and state taxes.

Using that 25% number, we can multiply our previous numbers by the remaining 75% to find out what net after-tax compensation you can expect if you make $30 an hour:

Daily: $240 x 75% = $180 to go. Weekly: $1,200 x 75% = $900 to take home

You can use a US tax calculator to get a more accurate estimate of how much tax to expect. Note that if you’re making $30 an hour as a freelancer, you’ll pay even more since you’re responsible for all your FICA taxes instead of having an employer handle them. Personally, I usually put 1/3 of my income aside for this. (Learn more about self-employment taxes from the IRS here.)

Is $30 an hour a decent, livable wage? The answer here is both simple and complicated: It depends.

The biggest factor is simply where you live. If you are a digital nomad living in Thailand and earning $30, you can live in luxury in a penthouse apartment. If you live in the American Midwest, you can probably afford a mortgage on a decent house. But if you live in a city like New York or San Francisco, you can probably get a closet with six roommates for $30 an hour.

Let’s look at an example monthly budget for someone who makes $30 an hour. Since housing is one of the biggest expenses, let’s start there and use the rule of thumb that you shouldn’t spend more than 30% of your gross monthly income on housing. We’re also budgeting for 15% in savings – you can always save more than that if you can, but think of saving and investing as a priority, not just ‘what I have left after spending’. This is money you pay your future self to make your life better!

Monthly Net Income: $3897

Depending on where you live, that kind of budget may seem extremely doable, or it may feel like there’s not much wiggle room. Affording and saving everything becomes much easier when you have a two-income household. Two people each working full-time and making $30 an hour have a net take-home of $7794, which is a pretty solid amount to live well in most places!

Want to stretch your $30 hourly wage as much as possible so you can live well and increase your savings rate? It is absolutely possible if you are determined enough! Check out these 72 tips to save money.

If you can only cut your budget so far and can’t find a job that pays more than $30 an hour, consider supplementing your work with part-time evening or weekend jobs. This can be as simple as taking polls on Swagbucks while you watch TV, or having Rover walk dogs on Saturday mornings, or even starting your own business. Check out 114 side hustle ideas here!