$20 an Hour is How Much a Year? (Plus Sample Budgets)

THIS POST MAY CONTAIN AFFILIATE LINKS. PLEASE SEE MY DISCLOSURES. FOR MORE INFORMATION.

How much do you make a year at 20 dollars an hour?

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

Assuming you work 40 hours a week, earning $20 an hour means you earn $41,600 a year.

But this answer isn’t absolutely correct.

There are other factors at play.

If you want to answer $20 an hour is how much a year for you personal situation, keep reading for a detailed guide to help you figure this out.

Below is a quick answer to how much is 20 dollars an hour annually, monthly, biweekly, and more.

Conversion	Salary
Annual Salary	$41,600
Monthly Salary	$3,840
Biweekly Salary	$1,600
Weekly Salary	$800
Daily Salary	$160

$20 Dollars an Hour is How Much a Year?

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 per week?

What if you work overtime?

Maybe you don’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.

Turning Hourly Wage 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.

It’s important to understand this formula because we use parts of it for all the other situations.

How Much Is $20 An Hour Part Time?

To figure out the answer to the question, “20 an hour is how much a year” when working part time, you need to take the number of hours per week you work and multiply that by 52.

Let’s say you complete 30 work hours per week.

Take 30 times 52 and you get 1,560 hours worked.

Multiply this by $20 and your yearly salary is $31,200.

The only variable in this equation is how many hours you work.

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 don’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 annual salary.

For example, let’s say you work 5 hours per week of overtime.

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

Let’s assume you don’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 hourly rate 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 salary, 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 40 hours per week.

A SIMPLE ESTIMATE OF ANNUAL INCOME

If you are strapped for time and don’t have access to a salary calculator, you can do some simple math to get a rough idea of your annual salary based on $20 dollars an hour.

Take $20 and double it, then add three zeros.

In this case, $20 becomes $40 and adding three zeros gets you $40,000.

As you can see, this isn’t exactly correct, but it will get you in the ballpark of what $20 an hour annually is.

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 and state income taxes, 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.

$20 an Hour is How Much a Year 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 based on your individual circumstances, meaning that everyone pays a different amount based on their gross income, dependents, deductions, and more.

And then there are state taxes on your hourly rate 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 salary.

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

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

If you are married and file jointly, you can expect your earnings after taxes 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 $20 per hour 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 earnings.

$20 Dollars an Hour Biweekly

To figure out your biweekly salary, you do the same calculation as above, but increase the number of hours worked.

So take 80 hours times $20 and you get $1,600.

$20 An Hour Is How Much Per Month

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

In other words, you can’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 an hour.

But since the number of works days per month varies, this makes figuring out your monthly salary more difficult.

Hourly Wage to Annual Wage Calculator

If you don’t want to do the math, below is a calculator for you to use.

Simply enter in your numbers to see how much money you make in a year.

$20 An Hour Sample Budget

Now that we have a good idea about take home pay, let’s look at an example $20 an hour budget so you can get an idea for how to get by on this income.

The example below shows your income broken down into main categories based in ideal 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 budget for single tax filers.

It 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

Here is a 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

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 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

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

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.

This is higher than the current minimum wage of $7.25 per hour.

It is also higher than the average hourly wage of $14.48 per hour.

Can You Live On $20 An Hour?

As you can see from the budgets 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.

If you can increase your income to $30 an hour, this will give you some more breathing room, allowing you to save money or pay down any debt you have.

In any event, it will help if you take steps to improve your financial situation so that you are struggling to put food on the table or 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 spending plan is helpful no matter your yearly income, or if you are an hourly employee or not.

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

The hardest part is figuring out which one 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.

It’s a tool that uses a spreadsheet and most of it is automated.

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

#2. Save Every Month

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

The amount you save isn’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 aren’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.

#3. Start A Side Hustle

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

You don’t have to commit to a job working 25 hours per 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.

Other side hustles to earn extra money include:

• Virtual assistant
• Working in graphic design
• Food delivery
• Pet sitting
• Freelance writing

#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?

When it comes to additional education, don’t think this means getting a degree.

You can take online courses that teach you a skill you use to increase productivity.

For example, if you work with spreadsheets, learn how to use Excel more efficiently.

Whatever you do, don’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

If you’ve ever asked the question, $20 dollars an hour is how much a year, now you know.

As you can see, there isn’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.