$15 an hour is how much a year? If you work 40 hours a week for 8 hours a day, you will earn a yearly income of $31,200. We will analyze a $ 15-an-hour salary to see how you can survive with it.
These days it is common to hear about mass employee layoffs. Many companies, including tech companies like Twitter and Meta, have undertaken mass employee redundancies, affecting thousands of workers and their dependents.
You may have gotten a $ 15-an-hour salary after losing your job. $15 may be not a good income, but you may live on this income if you spend money wisely.
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$15 an hour is how much a year?
The nice thing about annualizing your hourly salary is that the resultant figure looks vast in your sight and gives some psychological satisfaction.
A yearly and monthly salary can be budgeted easily, but it isn’t easy to budget an hourly income.
So imagine you’ve got an offer for a full-time job with a company, and you are being asked to work 8 hours a day and five days a week for a compensation of $15 an hour. As part of your considerations, you might wonder what the hourly rate will amount to in a year.
Indeed, unless you work part-time, 8 hours a day and five days a week are the standard working hours and days in most organizations. This translates into an annual gross (before tax) salary of $31,200.
Let’s go through the maths.
Annual Gross Salary: 8 hours a day x 5 days a week x 52 weeks x $15 = $31,200.
To break it down further;
8 hours x 5 working days = 40 hours (Total working hours in a week)
Number of weeks in the year: 52 weeks
52 weeks x 40 hours per week = 2,080 hours (Total working hours in a year)
Therefore, Annual Gross Salary = 2,080 hours x $15 an hour = $31,200
$15 an hour is how much a month?
If you work 8 hours a day and are paid $15 an hour, you will accumulate $2,600 every month.
The maths is straightforward; divide your annual income of $31,200 by 12 months.
Practically, the day’s wage of $120 will add up to $2,400 ($15 an hour x 8 hours x 5 days x 4 weeks).
However, since some months, like January, have more days than others, the number of working days will be distorted monthly.
As a result, your monthly income will keep changing; it is better to use the average of $2,600 per month.
$18 an hour is how much an hour? After and before taxes
$15 is how much a week?
Let’s say your boss decides to pay you a weekly salary. If you have read up to this point and followed the calculations, I don’t think calculating your weekly wage should be a big deal.
Ok, so the answer is $600 per week. You can determine this figure by dividing the annual salary of $31,200 by 52 weeks in a year or by multiplying $15 an hour by 40 hours a week.
$31,200 per year ÷ 52 weeks = $600 per week.
You can also calculate this amount as
$15 per hour × 8 hours a day × 5 days a week= $600 weekly
Is $15 a good salary?
For the average American citizen, $15 an hour is a lousy salary because it is below the average hourly rate of $32.
In Australia, the average hourly rate as of December 2022 is $37 (according to the Australian Bureau of Statistics).
So $15 an hour is not a good salary. Nevertheless, you can manage it if you are unmarried and intend to live a very frugal lifestyle. But if you have a family, this will be woefully inadequate.
In third-world countries, $120 a day is enough to make you a rich man if managed well. This is to say that your location dramatically affects the value of your salary, which will inadvertently influence your judgment as to whether it is good or bad.
Can you live comfortably on $15 an hour?
In September 2022, the World Bank updated the extreme poverty line from $1.90 per person per day to $2.15. The implication is that anyone living on less than $2.15 a day is considered extremely poor.
With a $ 15-an-hour salary, it is clear that you are not extremely poor by the World Bank’s standard.
After paying income tax and other deductions, your take-home pay (net salary) will be below $2,100 per month. If you live in expensive cities like Hong Kong, New York, Geneva, London, etc., this salary might not even suffice for your monthly rent.
As an individual, if you live in a cottage or a less expensive city, you can afford accommodation, food, and transportation and live a modest lifestyle with this net figure. So you can survive on $15 an hour, but you won’t live a comfortable life.
How much is $15 an hour after tax yearly, weekly and monthly?
$15 an hour after a tax rate of around 19.5 % will be $25,116 per year. This is your take-home salary after paying the taxes.
For the government to get revenue for development, citizens are taxed.
The employer deducts income tax at the source and pays the government. For a gross annual salary of $31,200, the likely tax rate is between 18% and 23%. But this will depend primarily on your country and state.
Some countries like Brunei, Bahamas, United Arab Emirates, and Bermuda, among others, do not charge income tax. Similarly, states like Alaska, Texas, Nevada, and South Dakota, among others in the United States, don’t charge income tax.
If you find yourself in any of these countries or states, you are sure to expect your entire salary in your bank account.
Let’s adopt a flat annual income tax rate of 19.5% and deduce the yearly, monthly, and weekly net salaries for $15 an hour.
Annual Gross Salary: $31,200
Income Tax Rate: 19.5%
Tax Amount: $31,200 x 0.195 = $6,084
Net Annual Salary: $31,200 – $6,084 = $25,116
Net Monthly Salary: $25,116 ÷ 12 months = $2,093
Net Weekly Salary: $25,116 ÷ 52 weeks = $483
How to budget a $ 15-an-hour salary?
Earning a net monthly salary of about $2,093 comes with many calculations and adjustments to one’s lifestyle. It would be best if you were frugal and distinguished between your needs and wants.
Economics 101 teaches about the scale of preference, and this principle needs to be applied here. You cannot do without shelter, food, clothing, and transportation. Therefore, it is essential to allocate funds to cater to these items before anything else.
Let us make a budget $2,093 monthly income.
When you have leftover funds, you can consider other things which add meaning to life, like entertainment and other social events.
It is necessary to cut expenditures to the bare minimum and apply for all tax reliefs available.
Tips for living on a $ 15-an-hour salary
Let’s begin by tackling the four large expenditure items on most workers’ budgets: shelter, food, clothing, and transportation. Then, we shall look at social activities and entertainment issues.
1. Live in an inexpensive house
With a net of $2,093, you cannot afford the expensive rents in the city centers or first-class residential areas. It will be prudent to stay on the outskirts of town, where rents are cheaper, or in smaller, less expensive cities with lower rents.
Sharing an apartment with a colleague or friend won’t be a bad idea either.
2. Spend wisely on food
Issues of food are pretty dicey. Groceries take a big chunk of your monthly paycheck.
To save money, you may cook in bulk and store it in the fridge to be eaten in piecemeal.
You can occasionally eat out, but the rule of thumb is to avoid eating at expensive restaurants as much as possible.
It would be best if you were mindful of the quantity of food you buy or cook. Buy or cook what you can eat, and avoid wastage.
3. Don’t waste your money on expensive clothes
When it comes to clothing, you don’t need to follow the latest fashion to appear decent. Instead, dress modestly, and keep a few clothes, but always wash them and wear them neatly ironed.
It is cheaper to join public transport than to own a car. It is advised to join public buses and trains to cut down the cost of transportation. In addition, it will save you the headache of buying fuel, vehicle maintenance, and insurance.
4. Stop spending on outings and other activities
Instead of going on expensive tours and outings, go for the free ones and enjoy your life without spending money.
Seldomly attend social activities, especially those that involve traveling over long distances.
For example, if you have been invited to a wedding in another state, send a cash donation instead of taking a flight to attend.
$15 an hour is how much an hour?
If you work 40 hours a week for 52 weeks a year, your gross annual salary would be $31,200.
Your weekly income and your monthly salary will be $2,600. This is all gross income, and your take-home income will be less than the gross after paying taxes.
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