There’s been a bit of talk in the news lately about whether to raise the federal minimum wage to $15 an hour. But how much a year is this, including after taxes? And is $15 a living wage?
After all, it’s great to get an increase to your income. But it’s also good to know just what you’re getting here.
So this article is going to be your crash course in what’s involved in that brand new salary you might be about to get. This includes whether earning $15 an hour is good and some jobs you may want to consider in this salary range.
$15 an hour is how much a year?
A full-time hourly employee making $15 an hour will earn $2,600 per month before taxes. This comes out to $31,200 annually. This amount can change though depending on other factors like overtime and working more or less than 40 hours per week.
For instance, according to the Bureau of Labor Statistics, the average part-time employee only works 5.62 hours per day. This comes out to just 28.1 hours per week.
Working that amount of hours would mean a weekly paycheck of just $421.50 at $15 an hour. This means that the average part-time employee who makes $15 an hour will have, working that number of hours, a yearly income of around $21,918 dollars – around a third less than a full-time employee at the same hourly rate.
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$15 an hour is how much a year after taxes?
The average tax rate of American tax payers last year was 22.6% of their earnings. At this rate, and assuming that you work a full time 40-hour week, your average take home salary annually on $15 an hour after taxes will be $24,148.80. The exact figure will, however, vary depending on which state you live in.
That is, while 22.6% may be the average tax rate in the US according to the OECD, each state has its own laws and regulations regarding how much it taxes your take-home pay. So let’s do the math on $15 an hour using a state that represents the average of what American’s pay for income tax.
In Nebraska, for example, the average person will pay 6.84% income tax each time they collect a paycheck. There is also federal income tax to take into consideration which, in this case, would equate to as a 12% tax liability.
Let’s break down what this means for our full-time and average part-time employees we mentioned earlier.
Our full-time $15 worker was earning $31,200 before taxes, but after state and federal income taxes the actual amount earned would go down to around $25,322. That’s about a 19% decrease in the amount of pay you can take home.
This means $15 an hour really isn’t. After taxes, it’s actually around $12.17 an hour.
It’s important to keep in mind that these are just cases based on average amounts and that most people will have different results according to their individual circumstances. Things like tax deductions, credits, and other personal factors can all increase the amount of your money you get back on your tax return.
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How much is a $15 an hour annual salary after tax (state-by-state)?
Here’s a table summarizing the income taxes and take-home pay for different states, based on earning $15 an hour working 40 hours per week, meaning a pre-tax annual salary of $31,200.
That said, the exact tax rates are subject to change from time to time, so make sure you double check based on where you live.
|State||Annual Take-Home Pay||Federal Income Tax||State Income Tax||Local Income Tax||FICA||Total State Income Taxes|
|Alabama||$25,531||6.54% ($2,040)||3.98% ($1,242)||–||7.65% ($2,387)||18.17% ($5,669)|
|Alaska||$26,773||6.54% ($2,040)||0.00% ($0)||–||7.65% ($2,387)||14.19% ($4,427)|
|Arizona||$26,289||6.54% ($2,040)||1.55% ($484)||–||7.65% ($2,387)||15.74% ($4,911)|
|Arkansas||$25,933||6.54% ($2,040)||2.69% ($839)||–||7.65% ($2,387)||16.88% ($5,267)|
|California||$26,258||6.54% ($2,040)||1.65% ($515)||–||7.65% ($2,387)||15.84% ($4,942)|
|Colorado||$25,933||6.54% ($2,040)||2.69% ($839)||–||7.65% ($2,387)||16.88% ($5,267)|
|Connecticut||$26,061||6.54% ($2,040)||2.28% ($711)||–||7.65% ($2,387)||16.47% ($5,139)|
|Delaware||$25,615||6.54% ($2,040)||3.71% ($1,158)||–||7.65% ($2,387)||17.90% ($5,585)|
|Florida||$26,773||6.54% ($2,040)||0.00% ($0)||–||7.65% ($2,387)||14.19% ($4,427)|
|Georgia||$25,572||6.54% ($2,040)||3.85% ($1,201)||–||7.65% ($2,387)||18.04% ($5,628)|
|Hawaii||$25,125||6.54% ($2,040)||5.28% ($1,647)||–||7.65% ($2,387)||19.47% ($6,075)|
|Idaho||$25,802||6.54% ($2,040)||3.11% ($970)||–||7.65% ($2,387)||17.30% ($5,398)|
|Illinois||$19,494||6.54% ($2,040)||5.63% ($1,426)||–||7.65% ($2,387)||23.02% ($5,853)|
|Indiana||$19,412||6.54% ($2,040)||3.86% ($977)||1.94% ($490)||7.65% ($2,387)||23.30% ($5,894)|
|Iowa||$20,080||6.54% ($2,040)||4.31% ($1,104)||0.11% ($28)||7.65% ($2,387)||18.41% ($5,560)|
|Kansas||$20,318||6.54% ($2,040)||3.95% ($1,014)||–||7.65% ($2,387)||21.13% ($5,441)|
|Kentucky||$17,652||6.54% ($2,040)||5.85% ($1,426)||3.76% ($920)||7.65% ($2,387)||27.79% ($6,774)|
|Louisiana||$20,954||6.54% ($2,040)||2.67% ($696)||–||7.65% ($2,387)||19.63% ($5,123)|
|Maine||$20,679||6.54% ($2,040)||3.23% ($833)||–||7.65% ($2,387)||20.47% ($5,260)|
|Maryland||$19,120||6.54% ($2,040)||4.08% ($1,030)||2.31% ($583)||7.65% ($2,387)||24.06% ($6,040)|
|Massachusetts||$19,668||6.54% ($2,040)||5.27% ($1,338)||–||7.65% ($2,387)||22.69% ($5,766)|
|Michigan||$19,500||6.54% ($2,040)||4.41% ($1,117)||1.21% ($306)||7.65% ($2,387)||23.02% ($5,850)|
|Minnesota||$20,348||6.54% ($2,040)||3.88% ($998)||–||7.65% ($2,387)||21.06% ($5,426)|
|Mississippi||$25,868||6.54% ($2,040)||3.51% ($905)||–||7.65% ($2,387)||20.68% ($5,332)|
|Missouri||$26,064||6.54% ($2,040)||2.71% ($708)||–||7.65% ($2,387)||19.90% ($5,136)|
|Montana||$25,818||6.54% ($2,040)||3.70% ($955)||–||7.65% ($2,387)||18.89% ($5,382)|
|Nebraska||$25,908||6.54% ($2,040)||3.33% ($864)||–||7.65% ($2,387)||17.52% ($5,292)|
|Nevada||$26,773||6.54% ($2,040)||0% ($0)||–||7.65% ($2,387)||14.72% ($4,427)|
|New Hampshire||$26,773||6.54% ($2,040)||0% ($0)||–||7.65% ($2,387)||14.72% ($4,427)|
|New Jersey||$26,314||6.54% ($2,040)||1.74% ($459)||–||7.65% ($2,387)||15.93% ($4,886)|
|New Mexico||$26,139||6.54% ($2,040)||2.43% ($633)||–||7.65% ($2,387)||16.62% ($5,061)|
|New York||$25,625||6.54% ($2,040)||4.48% ($1,148)||–||7.65% ($2,387)||18.67% ($5,575)|
|North Carolina||$25,699||6.54% ($2,040)||3.44% ($1,073)||–||7.65% ($2,387)||17.63% ($5,501)|
|North Dakota||$26,567||6.54% ($2,040)||0.66% ($206)||–||7.65% ($2,387)||14.85% ($4,633)|
|Ohio||$25,846||6.54% ($2,040)||0.34% ($106)||–||7.65% ($2,387)||2.63% ($821) + 14.53% ($5,354)|
|Oklahoma||$25,768||6.54% ($2,040)||3.22% ($1,005)||–||7.65% ($2,387)||17.41% ($5,432)|
|Oregon||$24,539||6.54% ($2,040)||7.16% ($2,234)||–||7.65% ($2,387)||21.35% ($6,661)|
|Pennsylvania||$25,191||6.54% ($2,040)||3.07% ($958)||–||7.65% ($2,387)||2.00% ($624) + 17.26% ($6,009)|
|Rhode Island||$26,102||6.54% ($2,040)||2.15% ($671)||–||7.65% ($2,387)||16.34% ($5,098)|
|South Carolina||$25,996||6.54% ($2,040)||2.49% ($777)||–||7.65% ($2,387)||16.68% ($5,204)|
|South Dakota||$26,773||6.54% ($2,040)||0.00% ($0)||–||7.65% ($2,387)||14.19% ($4,427)|
|Tennessee||$26,773||6.54% ($2,040)||0.00% ($0)||–||7.65% ($2,387)||14.19% ($4,427)|
|Texas||$26,773||6.54% ($2,040)||0.00% ($0)||–||7.65% ($2,387)||14.19% ($4,427)|
|Utah||$25,294||6.54% ($2,040)||4.74% ($1,479)||–||7.65% ($2,387)||18.93% ($5,906)|
|Virginia||$25,550||6.54% ($2,040)||3.92% ($1,223)||–||7.65% ($2,387)||18.11% ($5,650)|
|Washington||$26,773||6.54% ($2,040)||0% ($0)||–||7.65% ($2,387)||14.19% ($4,427)|
|West Virginia||$25,684||6.54% ($2,040)||3.49% ($1,089)||–||7.65% ($2,387)||17.68% ($5,516)|
|Wisconsin||$25,880||6.54% ($2,040)||2.86% ($892)||–||7.65% ($2,387)||17.05% ($5,320)|
$15 an hour is how much a month?
A full-time employee working 40 hours each week at $15 an hour would earn $2,600 a month. This is, however, the pre-tax amount. Based on the tax rate paid by the average single American of 22.6%, someone’s take home salary each month on $15 an hour would be approximately $2012 per month.
These amounts would, however, vary depending on where you live and how many hours you work each month.
For example, working closer to the national average of 28.1 hours each week brings your monthly take-home pay down to $1,826.50 before taxes. After we calculate the average tax liability, this monthly pay is actually closer to $1,414.
Knowing your actual monthly earnings is helpful for doing a budget, with many of these being done on a monthly basis. This means that aligning your pay cycle and your budget makes it much easier to work out how much you have to spend and where.
However, this also means that for those being paid weekly, it can be helpful to break this down even further.
$15 an hour is how much biweekly?
If you’re working full-time, which is typically 40 hours a week, you’d be earning $600 a week ($15 x 40 hours). In a biweekly pay period, that comes to $1,200 ($600 x 2). However, this is clearly going to differ if you work more or less hours each week.
As mentioned before, if you’re working part-time, the average is about 28.1 hours per week in the US. In this case, you’d make $421.50 a week ($15 x 28.1 hours). Over a biweekly pay period, that would amount to $843 ($421.50 x 2). Not too shabby for part-time work!
$15 an hour is how much a week?
For those working full-time, which I’ll consider as being 40 hours a week, you’d be making a cool $600 per week ($15 x 40 hours). Of course, if you work more – or less – hours each week, $15 an hour is going to come to a different weekly amount.
Let’s again consider part-time work. Just as a reminder, according to the OECD, the average part-time employee clocks in about 28.1 hours per week.
So, with that in mind, you’d be bringing in $421.50 a week ($15 x 28.1 hours). That’s a nice chunk of change for working part-time.
How much is $15 an hour weekly after taxes?
Let’s chat about how much you’d actually take home per week if you’re earning $15 an hour, considering taxes. Keep in mind that your take-home pay can vary depending on your personal circumstances and where you live in the US.
The average single American pays a tax rate of about 22.6%. Using this figure, let’s calculate your after-tax earnings for both full-time and part-time work:
Full-time (40 hours a week):
- Gross pay: $600 ($15 x 40 hours)
- Taxes (22.6%): $135.60 ($600 x 0.226)
- After-tax pay: $464.40 ($600 – $135.60)
Part-time (28.1 hours a week, based on OECD average):
- Gross pay: $421.50 ($15 x 28.1 hours)
- Taxes (22.6%): $95.26 ($421.50 x 0.226)
- After-tax pay: $326.24 ($421.50 – $95.26)
But remember, tax rates can be different depending on the state you live in, as well as your personal circumstances, such as deductions, exemptions, and other tax credits. So, your actual take-home pay might be different from these calculations.
It’s always a good idea to consult a tax professional or use a tax calculator to get a more accurate estimate for your unique situation.
How much is $15 an hour daily?
For full-time workers, who usually work around 40 hours per week, we can break it down like this:
- Hourly wage: $15
- Daily wage (8 hours a day, assuming a 5-day workweek): $120 ($15 x 8 hours)
Now, let’s look at part-time work. According to the OECD, part-time employees typically work an average of 28.1 hours per week. To estimate the daily wage for part-time workers, let’s assume they work 5 days a week:
- Hourly wage: $15
- Daily wage (5.62 hours a day, assuming a 5-day workweek): $84.30 ($15 x 5.62 hours)
Of course, these numbers might vary depending on the exact number of hours you work each day and the number of days you work per week, but it gives you a general idea of how much you could make daily at $15 an hour.
How much is $15 an hour working 40 hours a week?
Someone earning $15 an hour working 40 hours a week will make $600 each week before taxes. Based on the finding that the tax rate paid by the average single American is 22.6%, the take home weekly pay of someone making $15 an hour would be $464.40, meaning their actual hourly rate would be $11.61.
As mentioned earlier though, each state has different income tax rules and regulations. This means that a person in Arizona making $15 an hour might be taking home more, or less, than a person making the same hourly wage in Delaware.
Other factors can change this number. If your $15 an hour job requires you to own and maintain a personal vehicle, uniforms, or other work-related supplies, the real take home pay would change accordingly.
So this begs the question: Is $15 an hour a living wage?
Is $15 a living wage?
MIT found that the living wage in the US is $16.54 per hour, or $68,808 per year, before taxes for a family of four, with a living wage being defined as the approximate income needed to meet a family’s basic needs. This means that earning $15 an hour is not a living wage.
You can see more information here about MIT’s findings, including some pretty horrifying calculations about how much different people need to work based on the current minimum wage in the US.
To expand a bit more on the meaning of a “living wage”, it generally refers to how much money one person or household would need to comfortably make in order to meet all of their needs. This includes housing, food, clothing, healthcare, and money left over for savings and, well, enjoying life.
If this sounds like it’s hard to convert into numbers, that’s because it is. There are different ways of approaching these calculations. However, MIT has developed a tool that allows people to browse what a “living wage” would look like in their community based on the number of people you’re supporting.
Using their living wage tool, we can see that for one adult with no children, $15 would be a living wage in Omaha, Nebraska, but not in Chicago, Illinois. This also assumes that the person making $15 is working full-time.
Another complication comes in when children get added into the math. Adding even one child means that $15 is no longer a living wage. Even in the most affordable communities, living wage with one child is closer to $30.
While these aren’t the most straightforward calculations, it at least gives us some idea of, say, what’s a good salary for a single person, couple or a family – or some other life circumstances.
Is 15 dollars an hour good?
While $15 an hour is a huge boost for everyone making the federal minimum wage of $7.25, it’s still nowhere near what minimum wage would be if it had kept pace with inflation. It’s also not enough for most people to earn what would be considered a living wage.
Inflation is the rise in overall price of an economy over time. When we hear people talking about how the $7.25 minimum wage was more than enough “back in their day,” it’s important to keep in mind that the median cost of a house was only $17,000 back in 1970. If minimum wage had kept pace with inflation, it would be closer to $30 an hour today.
While movements like the Fight for 15 are pushing for a new federal minimum wage, it still isn’t even half of what it would be if it had kept pace with inflation, profits, and productivity.
You may also be interested in: Is $10,000 a Lot of Money? (+ 11 Tips on What to Do With It)
Can you buy a house making $15 an hour?
The answer to whether you can buy a house making $15 an hour depends on several factors, such as your financial situation, the housing market, your location, and your lifestyle choices. It is, however, going to be hard to afford a house by yourself on that wage.
If you’re working full-time at $15 an hour (40 hours a week), you’d make around $31,200 per year before taxes. For part-time workers averaging 28.1 hours a week (based on the OECD’s data), the annual pre-tax income would be approximately $21,966.
When determining if you can afford a house, lenders typically look at your debt-to-income (DTI) ratio. A common rule of thumb is that your housing expenses, including your mortgage, property taxes, and insurance, should not exceed 28% of your gross (pre-tax) income.
Additionally, your total monthly debts (including the housing expenses) should not exceed 36% of your gross income.
With a $15 an hour wage, you’d have to look for houses in a lower price range to meet these criteria, and it might be more challenging to qualify for a mortgage. However, there are some factors that could help:
- Saving for a larger down payment: This can lower your monthly mortgage payment and increase your chances of being approved for a loan.
- Low-cost housing markets: Look for affordable housing markets where home prices are lower, and your income will stretch further.
- Government programs: Explore government-backed loan programs, like FHA loans, which often have more lenient lending requirements and lower down payment needs.
- Improve your credit score: A higher credit score can help you secure better mortgage terms and lower interest rates.
Remember, each person’s situation is unique, so it’s essential to review your finances, debts, and expenses when considering if you can afford to buy a house. Consulting a financial advisor or mortgage professional can help guide you in the right direction.
$15 an hour jobs
Many companies are responding to ongoing unionization efforts and changing economic conditions by raising their minimum wages to $15 an hour. Here are a few major companies that pay $15 an hour and a few jobs that pay at least $15.
- Amazon — Amazon announced a $15 minimum wage in 2018 and has been using it’s higher starting wage as a strategy against one of its major rivals: Walmart.
- Costco — Costco already had a $15 starting wage in 2019 and has since increased it to $16.
- Target — Target had pledged to raise its minimum wage to $15 by 2020 and met that goal a month early.
- Whole Foods — This popular grocery chain was acquired by Amazon in 2017 for $13.7 billion and is now part of Amazon’s company-wide minimum wage policy.
- Walmart — Walmart is one of the few major retailers still holding out with a starting hourly wage of $11, but they have increased their “average hourly rate” to $15.
- Other $15 an Hour Jobs — In response to this growing movement for a higher minimum wage, jobs in transportation, warehouse management, logistics, and countless other industries have also moved to, or above, a $15 minimum wage.
How to live on $15 an hour
Living on $15 an hour can be challenging, but with some careful planning and smart choices, you can make it work. Here are 10 tips to help you along the way:
- Create a budget: Track your income and expenses (keeping track of your bills definitely helps!) to see where your money goes. Prioritize necessities like housing, utilities, groceries, and transportation. Stick to your budget and adjust it as needed to stay on track with your financial goals.
- Cut housing costs: Since housing is often the most significant expense, consider options like having roommates, renting a smaller place, or living in a more affordable area to reduce your housing costs and other bills when renting.
- Shop smart for groceries: Plan meals around sales and discounts, buy in bulk, and cook at home instead of eating out. Utilize coupons, cashback apps, and loyalty programs to save even more.
- Eliminate or reduce debt: High-interest debt can be a significant burden. Focus on paying off high-interest debts first and avoid taking on new debt whenever possible. Consider refinancing or consolidating loans to lower interest rates.
- Use public transportation: If available, use public transportation or carpool instead of owning a car to save on gas, insurance, and maintenance costs.
- Limit entertainment expenses: Find free or low-cost activities, like visiting parks, attending community events, or hosting game nights with friends. Utilize your local library for free books, movies, and events.
- Save on utilities: Be mindful of your energy and water usage. Turn off lights when not in use, unplug electronics, use energy-efficient appliances, and fix leaks to lower your utility bills.
- Build an emergency fund: Set aside a small amount from each paycheck to build an emergency fund, which can help you cover unexpected expenses without going into debt. In fact, it should be an essential part of anyone’s personal financial plan.
- Invest in yourself: Invest in your education and skills to increase your earning potential. Look for free or low-cost courses, certifications, or workshops that can help you advance in your career or transition to a higher-paying job.
- Seek assistance if needed: Don’t be afraid to ask for help. Look for local, state, or federal assistance programs, such as SNAP (food stamps), housing assistance, or Medicaid, to help you cover essential expenses.
Living on $15 an hour might require some sacrifices and creativity, but with determination and resourcefulness, you can make it work!
How to earn more than $15 an hour
If you’re looking to increase your income and earn more than $15 an hour, here are 10 tips to help you on your journey:
- Gain new skills: Invest in your education by taking courses, attending workshops, or obtaining certifications related to your field. Building a broader skill set makes you more valuable and marketable to potential employers.
- Leverage online resources: Utilize free or low-cost online courses and tutorials from platforms like Coursera, Udemy, or LinkedIn Learning to improve your skills in your current field or learn new ones.
- Network: Attend industry events, join professional organizations, and engage with people on social media to build connections in your field. Networking can lead to new job opportunities or help you gain insights into how to advance your career.
- Seek promotions: If you’re already employed, demonstrate your value and commitment to your employer by taking on additional responsibilities, volunteering for projects, or suggesting process improvements. This can make you a strong candidate for a promotion or raise.
- Job hop strategically: Changing jobs can often lead to a significant increase in income. Look for opportunities that offer higher pay, better benefits, or a more advanced position within your industry.
- Freelance or consult: Use your skills to offer freelance or consulting services to businesses in your field. This can provide an additional income stream and may even lead to full-time opportunities.
- Start a side hustle: Turn your hobbies or passions into a side business to generate extra income. Consider selling products on Etsy, offering services on Fiverr, or starting a blog or YouTube channel.
- Invest in passive income streams: Explore options like dividend-paying stocks, real estate investing, or peer-to-peer lending to generate passive income that can supplement your regular earnings.
- Pursue higher education: Obtaining a degree or higher-level certification in your field can open doors to higher-paying positions and increased career opportunities.
- Consider a career change: If your current field has limited income potential, research careers with higher earning potential that align with your skills, interests, and values. Be prepared to invest time and resources into the necessary education and training.
Remember, increasing your income takes time, effort, and persistence. Stay focused on your goals, and don’t be afraid to take calculated risks to help you reach them.
Final thoughts on earning $15 an hour
While earning $15 an hour may be an improvement if you’ve been working at a much lower minimum wage, there are plenty of good arguments for why it may not be enough, especially if your goal is to reach financial freedom.
Nevertheless, at the moment, it’s a solid target, especially for those organizations fighting for this to be the minimum wage across the board.
And if you find yourself earning $15 an hour, knowing just how much a year or even a month you’ll end up getting can really help you to work out your budget,
From there, it’s simply a question of sticking to it. That’s definitely doable at this rate, although some careful money management will be needed to make sure you’re spending within your means.