When it comes to considering a job opportunity, it’s important to think about the hourly rate it offers. But that’s not the only thing worth examining. How that works out as an annual salary is pretty significant too.
The number of hours worked can vary drastically from job to job. So, what sounds like a high hourly wage might not result in a good annual income.
So, I decided to take a closer look at $16 an hour is how much a year.
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$16 Per hour Annual Salary
To work out how much $16 an hour is per year is simple. Just look at the number of hours worked in a year. However, this depends on the job requirement and on whether you work full-time or part-time.
Full-time employees
Generally speaking, full-time employees work 40 hours a week. They also usually have two weeks’ holiday per year. Take those 40 hours, multiply them by the 50 weeks of work, and you get a total of 2,000 working hours each year.
Now you know that working out your yearly salary is easy. Multiply $16 an hour by 2,000 hours. That works out to an annual income of $32,000.
Part-time workers
Things are a little different for part-time staff. After all, part-time can mean as little as three hours a week or as much as 30! But the majority of part-time employees work between 20-29 hours a week.
To figure out what this means in a year, just use the same formula. 20-29 hours multiplied by 50 weeks gives you 1,000-1,450 working hours. Multiply that by $16, and that’s a yearly salary of $16,000 – $23,200.
But don’t forget…
Some groups of people are limited by the number of hours they can legally work each week. Minors, for example, can only work a certain amount of time and in certain industries. To find out more, check out the US Department of Labor website.
$16 an Hour is How Much a Year without Holidays
Working for an hourly wage can be awesome. That’s because it can come with unlimited earning potential! Of course, this depends on your employer, but the more hours you work, the more of that cold, hard cash you can earn.
If you don’t take those two weeks of holiday, that means you’ll be working 52 weeks a year. So, for full-time employees, 52 weeks x 40 hours is 2,080 hours. $16 multiplied by 2,080 is $33,280 a year.
However…
Working 40 hours a week, 52 weeks a year, isn’t always possible. Public holidays mean that most businesses are not open 365 days a year. Take a peek at this list of US public holidays to get a better idea of the days you will have to take off.
Is $16 an Hour a Good Rate?
Whether $16 an hour is a good rate or not depends on several things. Factors such as job type, experience, location, and cost of living all come into play. While it might be decent in some areas, that money doesn’t go as far in others.
Location
Location is probably one of the most significant factors to consider when determining is $16 an hour is a good hourly rate of pay. It’s easily sufficient for someone living in a small town or rural area. For those living in big cities, though, it probably won’t be enough to make ends meet.
Where is the cheapest place to live?
Places like San Francisco, New York, and Los Angeles are out. These are some of the most expensive cities in The USA. If you’re looking to live more cheaply, cities in rural states are the way to go. Kansas, Mississippi, and Oklahoma are the most affordable places to live.
Job type
The next factor to consider is the kind of job it is. $16 an hour is good for entry-level positions or part-time jobs. But for skilled labor or professional positions, it’s pretty low.
Someone working in retail, for example, or in food service, would find this a reasonable rate. But for a job such as a nurse, which requires a degree and specialist training, it’s not very much. It all depends on what the role requires.
Experience
Another crucial point to think about is experience. A person with little to no experience could be happy with $16 an hour. But, as they gain more skills over time, they can start to expect a higher rate.
A graduate fresh out of college can be happy with $16 an hour. However, once they start to climb the corporate ladder, they should start making more money. So, take this into account when considering if $16 an hour is fair or not.
Benefits
Many jobs come with company benefits. Health insurance, retirement plans, maternity, and paternity leave are just some of the possible perks some employers provide. They vary by job, though, so check out what’s an offer before taking the job.
Great benefits can save you a lot of money. That means they can help determine if $16 an hour is a good wage. While it might seem low for some positions, the benefits can make it all worth it.
$16 an Hour is How Much after Tax?
Unfortunately, $16 an hour is not the total you take home at the end of the day. Taxes are unavoidable. And they affect your pay differently depending on where you live.
The Tax Foundation has plenty of information about how much tax you should be paying. You can search by state to get a better idea of the rate in your area. You can also compare each state to see how living elsewhere could save you money.
How to Live on $16 an Hour?
Living on $16 an hour can be difficult, especially living in a big city. But, with a little effort and discipline, it is possible. Here are a few tips and tricks for making your cash go that little bit further.
Make a budget
One of the best ways to save money is to create a budget. Open up Excel and make a spreadsheet that lists all your outgoings. This should include rent, groceries, utility bills, transport, and any other necessities.
Be sure to include all expenses, matter how small they may seem. This creates a clear picture of where your money is going. This makes it easier to plan your finances.
Cut back
That budget can help when it comes to cutting back. It may help you realize that you’re spending too much on unnecessary items. A Starbucks on the way to work every morning can soon add up to a lot of money.
Instead of buying coffee, why not make a flask at home or take it in with you? Or bike to work instead of paying for parking? Every little helps when it comes to saving money.
Shop sensibly
It’s tempting to always go for name brands when shopping. But sticking to generic saves some serious moolah. Shop around, and compare prices before buying.
Using coupons works, too, as does buying in bulk. And don’t forget about discount stores. Plus, it’s wise to make a plan and avoid impulse buys.
Expect the unexpected
A surprise bill is no one’s friend. But they can happen at any time. It could be an accident that brings an unexpected medical bill or sudden damage to your home. Either way, it’s an expense you don’t want.
You need to plan for emergencies. Set aside a little money each month, and don’t touch it, no matter how tempting it might be. That way, you’ve always got a fund for emergencies.
Looking for a Side Hustle to Boost that $16 an Hour?
Then take a look at our guides to 15 Part-Time Jobs That Pay more than $40 an Hour, or how about 20 Part-Time Jobs That Pay more than $20 an Hour? Or, find out How to Make Money Without a Job and find some Legit Online Side Jobs to maximize your earnings.
Or, how about knowing How to Buy Amazon Returns, the Best Remote Jobs That Pay Well, the 10 Best Places to Sell Concert Tickets, How to Get Paid to Read Books, as well as How to make Money on Instacart in 2023?
Conclusion
Working out what $16 an hour is a year is a simple process. It all depends on how many hours you work; once you know that, simply times it by 16 to work out your annual salary.
But whether it’s a good rate or not is another issue. The federal minimum wage is just $7.25 an hour, so in comparison, it’s great! But for many cities and jobs, it’s just not enough.
Ultimately, the best way to work it out is to create a budget. Compare your funds going out to that $16 an hour coming in. From there; you can work out whether it’s enough.
Happy earning!