$40,000 a Year Is How Much an Hour? (2024)

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Some employers looking for new hires post an expected annual salary along with a job description. You might see an open job listing with a $40,000 annual salary, for example, and find yourself wondering how much you’d be earning daily or weekly if you’re hired.

This article will break down that salary amount for you, explain why location matters and give some pointers on budgeting so you can maximize your earnings.

How Much Is $40,000 a Year?

With a yearly income of $40,000, the hourly wage, assuming you work 40 hours a week, comes out to $19.23. When calculating annual home pay it is better to base your take home on 52 weeks and not 12 months to get a more accurate reading. Here is how much that amount would look like when calculated per hour, workday, week and month based on the yearly salary of $40,000.

$40,000 a Year: $19.23 Per Hour

If you have a 40-hour workweek, that means you work a total of 2,080 hours per year. This equates to 40 hours per week times 52 weeks a year (40 x 52), and about 173 hours per month. Therefore, with those numbers in mind, to calculate how much making $40,000 a year gives you per hour you simply divide $40,000 by 2,080 hours to give you $19.23 per hour.

$40,000 a Year: $153.85 Per Workday

If you know you make $19.23 an hour and the standard workday is eight hours, to figure out your workday pay you would multiply the hourly rate by the hours worked per day. For a salary of $40,000, this would mean you would make $153.85 per workday

$40,000 a Year: $769.23 Per Week

To properly budget out your finances, it’s good to know how and when you get your paycheck. Commonly, you will be either paid weekly or biweekly. If you make $40,000 a year your weekly pay would be $769.23.

Getting paid every two weeks means you’ll need to know $40,000 a year is how much biweekly.To figure out your biweekly pay you would double your weekly pay which would come out to about $1,538.46.

$40,000 a Year: $3,326.79 Per Month

To calculate how much you’ll make a month take your hourly rate of $19.23 and multiply it by the 173 hours you work per month which gives you about $3,326.79. What you make per month is usually a good foundation to build your budget around and allocate which funds go to expenses and which to savings.

Pay Breakdown Summary

PTO and Days Off: Quick Take

The federal holidays you get off, paid vacation days and your personal time off, or PTO, should also be considered when you are calculating your hourly, weekly or monthly income. Here are some key takeaways:

• If your job gives you two weeks of PTO per year, that means you are actually making more per hours worked as vacation time is factored into the total.
• Federal holidays such as Christmas, Independence Day, Memorial Day and more, are also calculated into hours worked.
• For example, if you total your PTO and Federal holiday hours off, and find you have about three weeks of paid vacation time all in, you could postulate that you receive more than $19.23 an hour. Simply take $40,000 and divide it by 49 weeks, which would break down to about $20.41 for the hourly rate for hours worked.

Where You Live Matters

No matter how many side hustles you have your cost of living plays a huge factor as to whether or not what you make a year lands on the side of good or bad. Many states in the U.S. also collect state income tax in addition to federal income taxes. The amount taxed varies by state. Here’s a sample:

• New York: 4% to 8.82%
• Colorado: 4.40%
• Georgia: 1% to 5.75%
• California: 1% to 12.3%

So, if you’re earning $40,000 and you live in California, you’ll pay an additional $888.02 per year in state income taxes.

Nine states in the U.S. don’t have income taxes. Those states are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. If you’re trying to maximize your take-home income, it pays to live in one of those states.

Ways To Budget Your Income

Budgeting is the best way to track and control your finances. Budgeting can sound scary, but it doesn’t mean you can’t have fun or enjoy life. It just means you understand where your money goes each month. Budgeting lets you prioritize your spending on what matters most to you.

Here are two popular ways to budget:

• 50/30/20 method: 50% goes to needs, 30% to wants and 20% to saving or paying off debt.
• Envelope method: You create an envelope for every spending category and split your cash into each envelope.

Ultimately, how you decide to budget is up to you, but it’s good practice.

Final Take To GO: Is $40,000 a Good Salary?

The minimum wage in the U.S. is $7.25. If you work 40 hours per week, that adds up to $15,080. For a family of four in 2023, the poverty guideline is $30,000. For a single individual, the poverty guideline is $14,580.

So a $40,000 salary is a lot higher than the minimum wage and poverty guidelines. But is it enough? The short answer is, it depends. Do you have debts you are currently paying down? What are your expenses like? Everyone has different circ*mstances and financial needs and goals.

Scott Jeffries contributed to the reporting for this article.