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Do you want to know how much money $20 dollars an hour is annually?

While you could seek out a salary calculator, the math is simple and can be done easily.

**Assuming you work 40 hours a week, you earn $41,600 a year.**

But this answer isnâ€™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.

**KEY POINTS**

Table of Contents

## 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 donâ€™t get time paid off and you have to take unpaid vacation?

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**Read now:**Find out how much $10 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.**

Itâ€™s important to understand this formula because we use parts of it for all the other situations.

### $20 An Hour Is How Much 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.

Letâ€™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 donâ€™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, letâ€™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

Letâ€™s assume you donâ€™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.**

If you do get paid vacation, you don’t have to worry about this, since you earn your income even when not working.

### 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 2023 there are 260 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 260 work days to get $41,600.

This assumes you work full-time hours.

### Gross Income vs. Net Income

Understand that all of these answers are gross pay, not net.

Your gross annual salary 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

### How Much Money Is $20 After Taxes?

It is important to know what your take home pay is so you can properly set up a budget.

The problem is that taxes are a personal thing, meaning that everyone pays a different amount based on their gross income, dependents, deductions, and more.

And then there are state income taxes as well.

The bottom line is it is difficult to determine the precise net income for your situation.

But I can offer rough estimates.

To get these numbers I used the Tax Calculator, which applies your tax filing status, Federal Income Tax and Social Security to your gross annual income.

You can enter in dependents and other deductions to get a more accurate number.

If you are a single filer, you can expect net income of roughly $36,852 before you pay any state income tax.

If you are married and file jointly, you can expect net income to be roughly $38,515. Again, this does not account for any income tax you pay to your state.

### Earning $20 An Hour For Other Time Periods

#### $20 An Hour Is How Much Per Day

To figure out your daily salary, you take your hourly pay of $20 and multiply it by your daily working hours.

**If you have 8 work hours, then you made a salary of $160 per day.**

#### $20 An Hour Is How Much 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 Is How Much Per Month

This calculation can get you in trouble because there are different number of work days per month.

In other words, you canâ€™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.

### $20 An Hour Sample Budget

Now that we have a good idea about take home pay, letâ€™s look at an example budget for how you can get by on this income.

The budget below shows your income broken down into main categories based in ideal budget percentages.

For example, utilities should make up around 10% of your monthly budget.

You can break this down into electric, cable, water, and sewer.

Here is a sample budget for single tax filers.

The budget is based off an annual take home pay of $36,852 or $3,071 per month.

Budget Category | Ideal Percentage | Budget Amount |
---|---|---|

Housing | 25% | $769 |

Utilities | 10% | $307 |

Groceries | 10% | $307 |

Insurance | 10% | $307 |

Transportation | 10% | $307 |

Medical | 5% | $153 |

Entertainment | 5% | $153 |

Personal | 5% | $153 |

Savings/Debt | 10% | $307 |

Giving | 10% | $307 |

TOTAL | 100% | $3,071 |

*Sample budget for singles*Here is a sample budget for couples and those filing their taxes as married, filing jointly.

It is based off an annual take home pay of $38,515 or $3,210 monthly.

Budget Category | Ideal Percentage | Budget Amount |
---|---|---|

Housing | 25% | $802 |

Utilities | 10% | $321 |

Groceries | 10% | $321 |

Insurance | 10% | $321 |

Transportation | 10% | $321 |

Medical | 5% | $160 |

Entertainment | 5% | $160 |

Personal | 5% | $160 |

Savings/Debt | 10% | $321 |

Giving | 10% | $321 |

TOTAL | 100% | $3,210 |

*Sample budget for couples filing jointly*The reason for the difference in income is that married couples tend to get a tax break, and as a result, pay lower taxes.

This isn’t always the case, as each situation is different.

But on average, this tends to be the case.

If you would rather follow the 50/30/20 rule of budgeting, here are the percentage breakdowns based on this budget.

First up is an example budget for single filers, again using the net annual income of $36,852.

Budget Category | Ideal Percentage | Budget Amount |
---|---|---|

Needs | 50% | $1,536 |

Wants | 30% | $921 |

Savings/Debt | 20% | $614 |

TOTAL | 100% | $3,071 |

*Sample 50/30/20 rule for single filers*And here is the 50/30/20 rule for couples and those married filing jointly.

It is based on the net yearly income of $38,515.

Budget Category | Ideal Percentage | |
---|---|---|

Needs | 50% | $1,605 |

Wants | 30% | $963 |

Savings/Debt | 20% | $642 |

TOTAL | 100% | $3,210 |

*Sample 50/30/20 rule for couples filing jointly*### Is $20 An Hour Good?

According to the Federal Reserve Bank of St. Louis, the national average hourly earnings as of December 2022 is $32.82.

The median hourly wage as of 2019 is $19.33, according to the Economic Policy Institute.

While the average is much higher, remember that it can be skewed by a few people earning a very high salary.

It could also be skewed by many people making minimum wage as well.

Because of this, it is best to use the median.

In this case, $20 an hour is slightly better than the median.

### Can You Live On $20 An Hour?

As you can see from the sample budget above, living on a yearly salary where you make $20 in hourly pay is not easy, but it can be done.

If you are single, getting by on this hourly wage is easier than if you have a family you are supporting.

Also, it helps to live in a low cost of living area as opposed to an area that costs a lot to live as your money will go further.

In any event, it will help if you take steps to improve your financial situation so that you are struggling to pay your bills each month.

### Tools And Tips To Help You Live On $20 An Hour

As mentioned, living on this wage is not easy, and because of this, you need to put some effort into improving your finances.

Here are some tips and tools to help you do just that.

#### #1. Set Up A Budget

A budget is helpful no matter your yearly income.

It will help you to prioritize the bills you have to pay as well as saving something each month.

The hardest part is figuring out which budget to use.

If you never budgeted before, here is a great list of various budgeting methods to consider.

Another option that many people love is using Tiller Money.

Itâ€™s a tool that uses a Google Sheet to budget for you and most of it is automated.

As a bonus, it sends you emails so you always know where you stand financially.

Tiller Money makes spreadsheet budgeting simple and fast. Use their pre-made budget and let Tiller automatically import your transactions. All you do is categorize them and you are done. **No risk 30 day free trial.**

#### #2. Save Every Month

It is critical you get into the habit of saving money every month.

The amount you save isnâ€™t as important as creating the habit.

By creating a habit, when you begin to make more money, you will automatically want to save some of it since it is what you do.

In the case of making $20 an hour, try to save $5-$10 a month.

Make sure you put this money into a savings account so you arenâ€™t tempted to spend it.

Work to build up your emergency fund so you can cover any unexpected bills that might come up.

While you could open up a savings account at your local bank, I prefer to use an online bank, specifically CIT Bank.

The reason why is because they pay a higher rate of interest than most other banks.

This means the money you save grows into larger amounts.

With one of the highest paying interest rates in the U.S. CIT Bank stands out as the best high yield savings account. Add in ease of use and great customer service, and you have a clear winner.

#### #3. Start A Side Hustle

Take a little time to figure out how you can start earning some extra cash on the side.

You donâ€™t have to commit to a job working 25 hours a week, rather something simple that earns you some cash.

This could be dog walking or getting paid to chat online.

The money you earn can go towards building up your savings more quickly.

#### #4. Pay Off Debt

If you have debt, specifically high interest credit card debt, you need to work on paying it off.

The sooner you can rid yourself of the debt, the sooner you will free up cash to put towards living expenses or savings.

When you find a side hustle, consider putting all, or the majority of the money you earn towards debt to pay it off quickly.

#### #5. Get A Raise At Work

Finally, you want to figure out how you can start earning more money at your job.

Schedule a meeting with your manager and ask what the best options are for you to increase your pay.

Is it taking on more responsibility? Getting more education?

Donâ€™t go into the meeting and ask for more money. Ask what you need to do to earn it.

Once you have a plan, set up another meeting for six months to review your progress.

It will be at this meeting you will ask for a raise, assuming you are doing what was needed to earn more money.

When you do get your raise, try to keep living on $20 an hour and take the extra money you earn and put it towards your debt or savings.

### Final Thoughts

**There is how much $20 dollars an hour is annually.**

As you can see, there isnâ€™t a simple answer to knowing your yearly salary.

But all are good estimates that will allow you to not only budget your money better, but also live on $40K annually.

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

I have over 15 years experience in the financial services industry and 20 years investing in the stock market. I have both my undergrad and graduate degrees in Finance, and am FINRA Series 65 licensed and have a Certificate in Financial Planning.

Visit my About Me page to learn more about me and why I am your trusted personal finance expert.