Do you want to know how much money $20 dollars an hour is annually?
Assuming you work 40 hours a week, you earn $41,600 a year.
But this answer isn’t absolutely correct.
There are other factors at play.
If you want to get a better idea of how much money you will earn when you make $20 an hour, keep reading.
How Much Is $20 Dollars An Hour Annually?
Variables In Income
The assumption that you will earn $41,600 on an hourly wage of $20 is correct.
But it assumes you work a 40 hour work week and 52 weeks a year.
But what if you work less than 40 hours a week?
What if you work overtime?
Maybe you don’t get time paid off?
And will you see a net income of $41,600 a year?
Here are the answers to all these questions so you can have a more accurate idea of your annual salary.
- Read now: Learn how much $15 an hour is annually
Turning Hourly Income Into Salary
The first step we need to understand is how to turn your hourly rate into an annual salary.
First we assume you work 40 hours per week.
If we multiply this by 52 weeks, we get 2,080 working hours.
Simply multiply this number by $20 and you get a $41,600 salary.
It’s important to understand this formula because we use parts of it for all the other situations.
How Much Is $20 An Hour Part Time?
To figure out your annual income here, you need to take the number of hours per week you work and multiply that by 52.
Let’s say you work 30 hours per week.
Take 30 times 52 and you get 1,560 hours worked.
Multiply this by $20 and you earn $31,200 a year.
Earning $20 An Hour With Overtime
The math for this one gets a little trickier.
This is because when you work overtime, the standard overtime pay rates says you are paid time and a half.
It also assumes you are not part of the small group of exempt employees that don’t earn overtime.
So take your pay rate and divide it half, then take that amount and add it to your hourly wage.
In this case, we take $10 which is half of $20 and add $20 to get $30.
Now take the number of overtime hours per week you work.
Assuming you work the same amount of overtime hours all year, you take this number and multiply it by 52.
Finally, you take this number and add it to your annual salary of $41,600 to get your total income.
For example, let’s say you work 5 hours of overtime per week.
Take 5 times 52 to get 260 hours. Now multiply this by $30 to get $7,800.
Add this to your $41,600 and your total income is $49,400.
The exception to this is if you work Sundays or holidays when many employers will pay you an overtime premium rate of twice your regular pay.
Paid Time Off
Let’s assume you don’t get paid for vacation time.
You need to subtract these weeks from your calculation.
Assume you get 2 weeks of no pay.
Since every year has 52 weeks, simply subtract the no pay weeks from 52.
In this case, take 40 hours and multiply this by 50 weeks.
You get 2,000 hours. Multiply this by your $20 hourly wage to get an income of $40,000.
The Most Accurate Estimate Of Annual Income
To get the most accurate answer for turning $20 an hour into an annual income, you need to look at how many working days there are in a year.
This varies by year based on when weekends and holidays fall, and also if it is a leap year.
In 2021 there are 261 work days.
We can then take your $20 hourly rate and multiply it by 8, assuming your work shift is this long to get $160.
Then take $160 and multiply it by 261 work days to get $41,760.
This assumes you work full-time hours.
Gross Income vs. Net Income
Understand that all of these answers are gross income, not net.
Gross income is what you earn before any deductions are taken from your paycheck.
In other words, you are earning $20 an hour before taxes.
Net income is your take home pay.
It is what is left after Federal income taxes, state income tax, retirement contributions, health insurance premiums, etc. are taken out.
This is why if you look at your final paycheck from last year, the amount you earned will differ from the calculations we performed.
If you want to know how to keep your taxes low, below are some great posts to read.
- Read now: Learn how to save on taxes like the wealthy
- Read now: Find out the truth about tax credits vs tax deductions
Earning $20 An Hour For Other Time Periods
$20 An Hour Per Day
To figure out your daily salary, you take $20 and multiply it by the hours per day you worked.
If you worked 8 hours, then you made a salary of $160 per day.
$20 An Hour Per Week
Simply take $20 and multiply it by the number of hours you worked for the week.
If you worked 40 hours, take $20 times 40 and you get $800.
Another way to figure out your weekly salary is to take what you earn per day from above and multiply this by the number of days per week you worked.
For example, if you worked 5 days this week, take $160 times 5 to see you earned an $800 weekly income.
$20 An Hour Per Month
This calculation can get you in trouble because there are different number of work days per month.
In other words, you can’t have a set formula for each month.
The easiest way to figure out your monthly income is to count the number of days you will work for the given month and multiply this number by your daily income of $160 per day.
If you counted 24 work days for the month, 24 times $160 has you earn $3,840 per month.
A more complicated option is to count the number of hours per month you work and multiply this by $20.
But since the number of works days per month varies, this makes figuring out your monthly salary more difficult.
There is how much $20 dollars an hour is annually.
As you can see, there isn’t a simple answer to knowing your yearly salary.
But all are good estimates that will allow you to budget your money better.
The key though is to remember these numbers assume gross income.
Your paycheck will be less when you take into account taxes and other deductions.
If you are earning $20 an hour, I encourage you to read the below posts to help you get ahead financially.
- Read now: Find 115 ways to save money today
- Read now: Learn how to slash your monthly bills and save $7,000 this year
- Read now: Click here for 41 money saving challenges
- Read now: Discover 15 tips to building wealth