There’s a job going in your local area that pays $38 per hour!
If you’re curious about your gross annual earnings and the net amount, you will be taking home post-tax, read on, and all will be revealed.
I’m going to provide you with all the necessary mathematical tools to transform any hourly wage into an annual total. Furthermore, I will also do the math to calculate the amount you will accrue on a daily, weekly, and monthly basis, and assess the standard of living this income level will provide.
Once that’s done, I will also work out how much federal and state taxes you will have to pay and assess the standard of living this income level can provide you.
So, calculators at the ready, as we find out…
- $38 An Hour Is How Much a Year?
- $38 Per Hour – Monthly Total
- $38 Per Hour – Weekly Total
- $38 Per Hour – Daily Income
- Here comes the Taxman
- Net Annual Income After Tax
- What Sort of Lifestyle Can You Afford Earning $38 Per Hour?
- Got More Salary Questions?
- Final Thoughts
$38 An Hour Is How Much a Year?
First and foremost, we need to total up the number of hours worked in a year. For this, we will presume a standard working day of eight hours with five days worked per week. We will also assume you are working all 52 weeks of the year.
To work out our total hours worked in a year, we simply multiply those three figures together:
- 8 hours’ x 5 days x 52 weeks – 8 x 5 x 52 = 2,080 total hours worked.
Now all we have to do to get our annual income is to multiply the total hours by whatever your hourly rate is, in this case, $38 per hour:
- 2,080 hours’ x $38 = $79,040 per year.
So there you have it. If you are prepared to put in 40 hour weeks all year round, you will earn a gross annual income of $79,040.
Only true workaholics don’t take any time off throughout the year, maybe those who adore their job and don’t have family commitments too. For the rest of us, a couple of weeks away from the grind is a necessity we can’t do without. So for a more honest appraisal of your annual income, let’s deduct 80 hours (2 weeks work) from our total hours worked and recalculate:
- 2,080 – 80 = 2,000 total hours worked.
- 2,000 hours x $38 = $76,000 per year.
$38 Per Hour – Monthly Total
Presuming that most workers receive payment every four weeks, we will adopt this as our monthly benchmark. Given a 40-hour workweek, the overall number of hours worked over the course of four weeks would be:
- 40 x 4 = 160 total hours worked.
Now we take our hourly rate again and to the necessary multiplication:
- 160 hours x $38 = $6,080 per month.
$38 Per Hour – Weekly Total
Things get more straightforward here. As we have presumed a standard 40-hour work week, we just need to multiply this by our hourly rate once more:
- 40 hours x $38 = $1,520 per week.
$38 Per Hour – Daily Income
As we’re putting in 8 hour shifts, let’s multiply by our hourly rate again:
- 8 hours x $38 = $304 per day.
Here comes the Taxman
It’s all well and good working out our gross annual earnings, but you will only see a percentage of this amount thanks to the wonders of the modern tax system. Federal Income tax is the big one but FICA taxes and state income tax (if you have to pay it), will also eat away at your once glorious grand total.
So it makes sense to work out exactly how much that’s going to be and exactly what you will have left to play with. I’ll start with the big one…
Federal Income Tax
For our calculations, we are going to use the gross yearly income figure that assumes you work every week of the year, which is $79,040. Federal Income tax is paid at different rates on a sliding scale as your income increases. For example, you only pay 10% tax on the first $11,000 you earn. The rate increases in brackets which the following table displays, along with how much you will owe in each bracket:
|2023 Federal Income
|$0 to $11,000||10%||$0 – $11,000 = $11,000
$11,000 x 0.1
|$11,001 to $44,725||12%||$44,725 – $11,001 = $33,724
$33,724 x 0.12
|$44,726 to $95,375||22%||$79,040 – $44,726 = $34,314 $34,314 x 0.22
Now we know the amount owed in each bracket, all we have to do is add them up:
- $1,100 + $4,046.88 + $7,549.08 = $12,695.96 owed in Federal Income Tax.
And it doesn’t stop there. Your forced contributions towards Medicare and Social Security programs will see you kissing goodbye to another 7.65% of your hard-earned cash. The easiest way to work this one out is to express 7.65% as a decimal of 1 rather than 100. To do this, we simply shift the decimal point two places to the left:
- 7.65, therefore, becomes 0.0765.
We now take our yearly total and multiply it by 0.0765 to get the amount owed which is 7.65%:
- $79,040 x 0.0765 = $6,046.56 owed in FICA taxes.
State Income Tax
Figuring out your state income tax level can be somewhat tricky. If you’re lucky enough to live in any of the following seven states, you won’t have to pay a bean
- South Dakota
It’s safe to assume they will make it back in some other way, though, so don’t feel too smug.
The other states have different tax rates. Some have a fixed rate that is not based on your income, while others have several tax brackets with varying rates based on your income level. Having examined the rates across the country for this income level, if you reside in a state that imposes income tax, you will pay an average of around 4.5% of your income. Let us now calculate that:
- $79,040 x 0.045 = $3,556.80 owed in state income tax.
Overall Tax Owed
|Federal Income Tax||$12,695.96|
|State Income Tax||$3,556.80|
Net Annual Income After Tax
Now we have calculated our total tax bill of $22,299.32, all we have to do is deduct this from your gross annual pay to work out what you’ll be left with:
- $79,040 – $22,299.32 = $56,740.68 net income after tax.
To work out how much we have just paid in tax as a percentage, we simply divide the total tax bill by our gross annual income and multiply the result by 100:
- $22,299.32 / $79,040 x 100 = 28.21% paid in tax.
Let’s see how that 28.21% tax rate affects your monthly, weekly, daily, and hourly earnings:
|Time Period||Pretax rate||After-tax income
|Monthly rate (4 Weeks)||$6,080||$4,364.67|
As we have presumed a full-time work week of 40 hours for all 52 weeks of the year, your yearly income before taxes of $79,040 would position you at roughly the 75th percentile of American income earners. This is roughly 20% higher than the average individual income in 2022, which is $66,755. $38 an hour is, therefore, a very respectable income when compared nationally.
What Sort of Lifestyle Can You Afford Earning $38 Per Hour?
Obviously, everyone’s circumstances are different. A single person with no other mouths to feed should be able to live very comfortably on this level of income, especially if they live in a less expensive part of the country. America’s more expensive cities will push this income to the limits, especially if you live in an expensive part of town.
For those trying to raise a family on a single income, life won’t be so sweet at $38 an hour. Although well above the national average, you will be far more limited as to where you can live and the level of luxury you can afford. It’s still doable, although who knows for how much longer.
Combine this income level with a partner who is earning similarly, and you’ll have enough to raise a family comfortably.
Got More Salary Questions?
If so, take a look at our informative guides on How Do I Convert Salary To Hourly To Calculate A Part Time Rate, or the difference in Gross Pay vs Net Pay, as well as How To Get A Pay Stub in 2023?
Or maybe you need to know the difference between Part Time And Full Time Hours, or between Salary vs Hourly Pay or are trying to find the very best Flexible Jobs That Let You Set Your Own Hours.
Or, if you’ve got that all-important interview coming up, then you might be wondering How To Counteroffer Your Salary After A Job Offer, as well as how to answer What Are Your Salary Expectations and How To Answer Desired Salary?
So there you have it. If you are prepared to chain yourself to the job every weekday of the year, you can earn a gross income of $79,040 annually, which is about 20% higher than that of the average American.
Once a not-inconsiderable part of your gross income has been spirited away and frittered by the government, you will be left with $56,740.68 to support yourself throughout the year. That is still a comparatively good income that will allow you to enjoy a comfortable standard of living as long as you aren’t a reckless spender.