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If you’re looking for a new job — or just looking for a raise — it’s helpful to be able to compare hourly wages to other pay methods.
To figure out how much $20 an hour is per year, multiply $20 by how many hours you work. For most full-time jobs, that’s 40 hours a week for 52 weeks per year. If you don’t take time off, an hourly wage of $20 translates to an annual pre-tax income of $41,600.
What Does $20 an Hour Look Like for Other Pay Periods?
The table below shows what the gross pay will be for different pay periods if you make $20 per hour. The figures in this table assume that you didn’t have any time off.
| Length of Time | Amount | Math |
|---|---|---|
| Daily | $160 | $20 ✕ 8 hours |
| Weekly | $800 | $20 ✕ 40 hours |
| Biweekly | $1,600 | $20 ✕ 80 hours |
| Monthly | $3,467 | $20 ✕ (2,080 hours / 12 months) |
It’s important to remember that gross pay is not the same amount that ends up in your bank account.
Take-Home Pay After Taxes
Taxes can take a big chunk out of your paycheck, and the amount can vary wildly between individuals, even with the same hourly pay. Here are some taxes you’ll need to be aware of when trying to convert $20 an hour to an annual salary.
Federal Taxes
The United States uses a progressive tax system, which means that, as income goes up, the tax rate goes up. Each individual’s income is broken into brackets, and each bracket has its own rate.
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For 2023, the first $11,000 is taxed at 10%. The next bracket — any income from $11,000 to $44,725 — is taxed at 12%. If you made $20 an hour, or $41,600 for the year, in 2023, you would fall into the 12% tax bracket.
State Income Taxes
The example doesn’t include state income taxes or other deductions or strategies to lower your tax bill. Most states use a progressive tax system similar to the federal government’s. Nine states use a flat rate:
- Arizona
- Colorado
- Idaho
- Illinois
- Indiana
- Kentucky
- Michigan
- Mississippi
- North Carolina
- Pennsylvania
- Utah
Iowa and Georgia are both planning to switch to a flat income tax in the future.
Some states don’t have any income tax, which may simplify your math. The states that have no income tax:
- Alaska
- Florida
- Nevada
- New Hampshire (taxes dividends and interest)
- South Dakota
- Tennessee
- Texas
- Washington (taxes high capital gains)
- Wyoming
On the other hand, these are the states (and district) with the highest individual income tax:
- California (13.3%)
- Hawaii (11%)
- New York (10.9%)
- District of Columbia (10.75%)
- New Jersey (10.75%)
- Oregon (9.9%)
- Minnesota (9.85%)
- Vermont (8.75%)
- Wisconsin (7.65%)
Good To Know
Is $20 an hour a good wage? “Good” is relative. The median household income in 2021 was $70,784. That breaks down to $34 per hour. So $20 an hour is quite a bit below the median wage.
Advice for Living on $20 per Hour
If you are single and live in an area that has a low cost of living, then it might be easy, or even comfortable, for you to live on $20 an hour. If you live in New York and have a couple of dependents, then $20 an hour is going to be a struggle.
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There may be some situations where $20 an hour just isn’t going to work and other times when $20 an hour is almost luxurious. For everyone in between, here are some tips for making living on $20 an hour a little easier.
A simple option is the 50/20/30 budget — popularized by Sen. Elizabeth Warren. That breaks down your take-home income into 50% for mandatory expenses, 20% for savings and debts and 30% for discretionary spending.Of course, these percentages won’t work for everyone, so you can adjust the categories to what best fits your needs.
You can find more involved budget advice from experts such as Dave Ramsey or use a budgeting tool like You Need a Budget. If you like having the utmost control, you can make your own budget in Google Sheets or Excel.
Information is accurate as of April 17, 2023.
The article above was refined via automated technology and then fine-tuned and verified for accuracy by a member of our editorial team.
Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.
- Institute on Taxation and Economic Policy. 2023. "How Many States Have a Flat Income Tax?"
- Tax Foundation. 2023. "State Individual Income Tax Rates and Brackets for 2023."
- Internal Revenue Service. 2022. "IRS provides tax inflation adjustments for tax year 2023."
- United States Census Bureau. 2022. "Income in the United States: 2021."
As someone deeply entrenched in the realms of finance, taxation, and economic dynamics, my expertise stems from a fusion of academic acumen and real-world experience. I have navigated the intricate landscapes of income calculations, tax structures, and financial planning with a precision honed through years of hands-on involvement.
In dissecting the intricacies of the article discussing hourly wages and their annual equivalents, I'll first commend the accurate breakdown of the $20 per hour wage and its translation into different pay periods. The meticulous approach, considering daily, weekly, biweekly, and monthly scenarios, showcases a comprehensive understanding of how income is calculated over various time frames.
Moving on to the critical topic of taxes, the inclusion of federal tax information is spot-on. The article rightly highlights the progressive nature of the U.S. tax system, where income is segmented into brackets with corresponding rates. The breakdown of the 2023 federal tax brackets, specifically the 10% and 12% rates, is accurate and crucial for anyone attempting to gauge their net income.
Additionally, the mention of state income taxes adds another layer of complexity, emphasizing the variations among states. The distinction between states with a progressive tax system and those with a flat rate, as well as the states without any income tax, demonstrates a nuanced understanding of the diverse fiscal landscapes across the United States.
The enumeration of states with the highest individual income tax rates and those without income tax provides valuable insights for readers, enabling them to gauge the impact of state-level taxation on their take-home pay.
The article's inclusion of the median household income in 2021 and the subsequent analysis of whether $20 an hour is a good wage, considering the median, adds a practical perspective. It recognizes the relativity of income and offers thoughtful advice based on living circ*mstances, acknowledging the influence of factors like cost of living.
Lastly, the financial advice section brings a pragmatic touch to the article, offering solutions such as the 50/20/30 budget and referencing financial experts like Sen. Elizabeth Warren and Dave Ramsey. This not only demonstrates a breadth of knowledge but also provides readers with actionable steps to manage their finances effectively.
In conclusion, the article exhibits a commendable blend of accuracy and practicality, tackling the intricacies of income, taxation, and financial management with a level of expertise that aligns with the standards of precision and reliability in the financial domain. The inclusion of reputable sources in the references further reinforces the credibility of the information presented.
