When you are on the lookout for a new job, you have to take a lot of things into consideration. One of the most important is how much you’ll be making!
Is it better than what you were getting at your previous position and the same amount of hours? $42,000 A Year Is How Much An Hour?
Let’s take a look at what this looks like as an hourly rate and weekly rate, and if it’s enough for you to comfortably live on after taxes. Otherwise, you might need to negotiate for better rates during the all-important interview process.
So, let’s take an in-depth look at…
- $42k A Year Is How Much An Hour?
- Along Comes The Tax Man
- Is $42,000 A Year A Good Wage?
- Tax Breakdowns
- Monthly Budgets Of $42K Per Year Earnings
- Going For Your All Important Interview?
- Final Thoughts
$42k A Year Is How Much An Hour?
Traditionally, American business hours across the board are 9:00 a.m. to 5:00 p.m., Monday to Friday. This is representative of a standard 40 hours working week, which includes 5 x eight-hour working days. So if you are looking for a new position that includes 40-hour work weeks, that’s 2080 hours a year. Divide 42,000 by 2080, and you end up with $20.19 per hour.
Let’s break that down a bit further, with what that looks like monthly and weekly as well, again, before taxes. You are making: $42,000 per year, that’s $3,500 per month, $807 per week, and then $20.19 per hour. Not bad at all, it’s way above minimum wage, but remember, this is before taxes.
Along Comes The Tax Man
Now, of course, these totals are before taxes are taken out. Are you aware that there a quite a few that are taken from your paycheck before you receive it each month? Typically, you will have several different types of taxes embellished from your check. This includes Federal Income Tax, State Tax, Social Security Tax, and also Medicare Tax.
However, it all depends on where you are located, as some states incur more taxes than others; meanwhile, there are a few states that do not tax wages.
Who has the least taxes?
According to Wikipedia, if you are lucky enough to live in Alaska, Florida, South Dakota, Nevada, New Hampshire, Tennessee, Texas, Washington, and Wyoming, then you will receive most of your monthly income as it won’t be lessened by a lot of these different taxes!
Let’s take a look at your monthly take-home pay if you are based in New York. Before taxes, you are due to receive $3,500 for your 40-hour working week. Here, just like in most states, taxes typically equate to these types of figures:
- $402.50 – For Federal Income Tax – is around 11.5% of your paycheck.
- $147 – State Income Tax – Then you have a State Tax, which is representative of 4.2%.
- $98 – Local Tax – Which is usually around 2.8%.
- $217 – For Social Security Tax – Meanwhile, your social security is 6.2% from you and the same from your employer, so a total of 12.4%.
- $50.75 – For Medicare Tax – equals 1.45%, which, again, both you and your employer pay the same rate, so a combined total of 2.9%.
After these taxes, from $3,500, you’ll be left with around $2,584.75 each month. That’s almost $1,000 garnished from your wages to the tax men and all the subsidiaries, or a whopping 26.15%. Of course, this depends on which state you live in, as the amount varies in accordance with this.
So what does $42K a year look like per hour after taxes? Instead of $20.19, it drops by almost $5 to $14.91 an hour.
Broken down again, after taxes, on a $42K a year, you are due to receive the following:
- $14.91 – Per Hour
- $596.40 – Per Week
- $2,584.40 Per Month
- $31,012.8 – Per Year
Is $42,000 A Year A Good Wage?
If you are making $42K a year, you aren’t doing too badly for yourself, especially if you are just beginning to climb your career ladder. You are making more than minimum wage, which currently stands at $14.20 an hour or $29,536 per year in the greater New York region, before taxes. So $42,000 is around one and a half times the minimum wage.
What If I Wanted To Take Home $42,000 A Year After Taxes?
If you wanted to ensure you were bringing home a certain amount each year (let’s stick with $42K in your hand after taxes), then let’s figure out the maths. We know that we get $3500 a month before taxes, so if we add the tax total of 26.15% to our $3,500, then we end up needing to earn approximately $4,415.25 a month.
However, it’s important to note that this is not completely accurate as you’ll be pushed up into a higher tax bracket. So, instead of paying a 26.15% total tax fee, it goes up closer to 30%. So broken down into yearly, monthly, weekly, and hourly, to earn $42,000 net (what you take home after taxes), you’ll need to earn the following:
- $61,000 – Per Year
- $5,083.33 Per Month (61,000 ÷ 12 months of the year)
- $1,173 – Per Week (61,000 ÷ 52 weeks of the year)
- $29.32 – Per Hour (61,000 ÷ 2080 working hours each year)
Let’s break it down as we did previously. Again, we are based in the greater New York area when calculating these tax percentages. $61k per year works out to be $5,083 per month, and these are the approximate level of taxes that will be garnished from your monthly paycheck.
- $753 – For Federal Income Tax – That’s 14.8% of your paycheck, an increase of 3.3%.
- $242 – State Income Tax – State Tax increases by 0.47% to 4.76%.
- $159 – Local Tax – Increases to 3.14%, which is a loading of 0.34%
- $315 – For Social Security Tax – Meanwhile, your social security stays steady at 6.2%.
- $74 – For Medicare Tax – As does your medicare tax, 1.45%.
After these taxes are removed, the figures to earn $42,000 net each year look like this:
- $20.37 – Per Hour
- $814.85 – Per Week
- $3,531 Per Month
- $42,372 – Per Year
Monthly Budgets Of $42K Per Year Earnings
As previously calculated, your monthly take-home pay is going to be around $2,584.40 each month if you’re single and living in the Big Apple.
A simple monthly budget, which includes rent or mortgage as ⅓ of your income amount, can look something like this. Feel free to play around with this basic outlook to make it personalized to you, your spending habits, and how you like to live your life!
- $852 – Rent or mortgage at 33% of your wage
- $525 – Average Car Payment in New York City
- $148 – Average Car Insurance
- $200 – Groceries and Eating Out
- $273 – Average Utilities Cost In New York City
- $45 – Cell Phone
- $80 – Gym Membership
- $75 – Clothing/Miscellaneous
- $125 – Health Insurance
- $100 – Savings
- $95 – Entertainment
This totals $2,518 and leaves just $66.40. However, if you live in the city, it’s more than likely you won’t own a car as the public transport system is amazing, and that will, in turn, leave over a huge amount of your paycheck to include other things.
Another option is to opt for a car repayment to the value of 10% of your monthly income (that’s $258 on this budget). That way, it’s far more affordable, and you’ll still have the freedom of owning your own set of wheels.
Alternative Budget breakdown
If you don’t have a car payment or pay car insurance, are a total foodie and enjoy going out on the town several times a week with your friends, and do not step a foot inside the gym. Then your monthly budget might look something like this:
- $852 – Rent or Mortgage at 33% of your wage
- $375 – Groceries and Eating Out
- $300 – Entertainment
- $300 – Savings (10 – 15% each month is amazing)
- $273 – Utilities
- $45 – Cell Phone
- $125 – Health Insurance
- $100 – Clothing/Miscellaneous
- $120 – Transportation
This totals $2,490, leaving $94.40 left over, a nice chunk of change to put in your savings account each month. Budgets are easy to swap and flip around, especially when money might be a little tight.
You can easily save money by lowering your car payment by getting a cheaper car or, if you live in a big city or built-up location where public transport runs great, you can opt out of having one altogether and putting the car payment and insurance to good use elsewhere.
Have fun… but not too much!
You can also save a lot of money by eating out less often, choosing to buy your food at the grocery store, and cooking and preparing meals at home.
Also, entertainment might be costing you a lot, so to help save the pennies choose to have a few booze-free nights and be the designated driver. Get a monthly streaming account instead of weekly trips to the movies, and shop around for the best mobile phone and gym contracts, as well as health insurance policies.
Going For Your All Important Interview?
Well, congratulations! It’s always good to prepare beforehand, and we would recommend you take a look at how to answer What Are Your Salary Expectations, as well as How To Counteroffer Your Salary After A Job Offer in 2023.
You might need better insight into pay and salaries. For that, check out the difference between Part Time And Full Time Hours, Salary Vs Hourly Pay, and Gross Pay Vs Net Pay, or perhaps you’d like to find out How Do I Convert Salary To Hourly To Calculate A Part Time Rate.
Once you have a better understanding, then check out the Top Easy Jobs That Pay Well, the best Flexible Jobs That Let You Set Your Own Hours, along with the top 15 Part Time Jobs That Pay More Than 40 Per Hour, and 20 Part Time Jobs That Pay More Than 20 Per Hour.
$42,000 a year is pretty good in terms of being 1.5 times above the average national minimum wage. It works out to be $20.19 per hour or $3,500 a month before taxes. If you set yourself up with a carefully crafted budget that you can easily stick to, it’s more than enough to live, love, and thrive in a big city and in life!
Happy Budgeting, and Good Luck!