Last Updated: October 5, 2022
You’ve been offered a job that pays $10 per hour, or maybe you’re a freelancer considering setting their rate at $10. Either way, a natural question arises:
10 dollars an hour is how much a year?
If we assume that you work for a whole year without taking a vacation or a break for holidays, the formula is:
- $10 per hour x 40 hours per week x 52 weeks = $20,800 annually
What can you expect in terms of taxes? What is your monthly budget with a job paying $10 per hour? Keep reading, as our guide will make planning your expenses a bit easier.
10 Dollars an Hour Is How Much a Year After Taxes?
Your wage, after taxes, is your net wage, and the gross wage is the total amount without deductions. When looking for a job, pay attention to whether the wage is a net or gross wage.
Now that we know your gross annual salary for 10 dollars an hour, let’s see how much you will actually take home.
Federal Income Tax
The federal income tax is a progressive tax rate, which means it increases in accordance with the taxable amount. Bear in mind that there are deductions that can lower your taxable amount, thus your tax liability. For our calculation, we will use the Standard Deduction for single taxpayers, which is $12,950 in 2022. Subtracting this amount from your total annual income of $20,800, we get $7,850.
The taxable income of $7,850 falls into the first tax bracket determined by the IRS, as you can see from the tax rates table for 2022.
|Tax Rate||Annual income||For married couples filing jointly|
|10%||up to $10,275||up to $20,550|
|12%||from $10,275 to $41,775||from $20,550 to $83,550|
|22%||from $41,775 to $89,075||from $83,550 to $178,150|
|24%||from $89,075 to $170,050||from $178,150 to $340,100|
|32%||from $170,050 to $215,950||from $340,100 to $431,900|
|35%||over $215,950||over $431,900|
So, here is how much federal tax you have to pay per year:
$7,850 (taxable amount) x 10% = $785
After paying your due to the IRS, you are left with $20,015. However, there are other tax obligations you also need to consider.
The FICA (Federal Insurance Contributions Act) tax funds social security and Medicare programs. Your employer deducts from your gross wage 6.2% for the social security tax and 1.45% for the Medicare tax. This will set you another $1,591.20 per year.
So, 10 dollars an hour is how much a year after including the FICA taxes? You can expect a wage of $18,423.20. This is your annual net salary if you don’t have to pay the state income tax.
Can you live on $10 an hour? It will directly depend on the state you live in. Living costs vary greatly, and so do state taxes.
There are nine states without an additional tax on your income: Tennessee, Alaska, Florida, Texas, Sought Dakota, Nevada, Wyoming, and Washington. The rest impose either fixed or progressive state income taxes. The highest ones are in New York at 14.71% and Oregon at 14.69%.
Due to the lack of universal formula, we won’t include state income taxes in our calculation, but we will point out the importance of considering them when it comes to your net pay. For more comprehensive and detailed calculations, use one of the many online tools available.
10 Dollars an Hour Is How Much a Week?
If you work full-time, making $10 per hour, your weekly gross income will be $400. Here’s the calculation:
40 (8 x 5 hours per week) x $10 (hourly rate) = $400
And the net pay will amount to $354.30, without state taxes considered.
$10 an Hour Is How Much a Month?
Per month we usually have anywhere between 19 to 22 business days or 4.33 weeks per month. This is an average value, as some months have non-working holidays and fewer working days than others. Therefore, we’ll use the 19 to 22 business day range to calculate how much your net and gross wage per month.
With a full-time 10 dollars an hour job and depending on the number of business days, your gross monthly wage is between $1,520 and $1,760 per month. The net salary is from $1,346.15 to 1,558.70 per month.
Living on 10 Dollars an Hour
According to the Bureau of Labor Statistics (BLS), the median weekly wage for full-time workers in the US is currently $1,041, or $26 per hour.
With $10 per hour, or only $354.30 per week after taxes, you will have a hard time making the best out of your budget. If you are thinking of a 50/30/20 budget approach, the average of $1,410 per month will leave you with $705 for necessities, $423 for wants, and $282 for savings and debt repayment. This will be hard for most people to keep up with, and renting an apartment will only be possible with roommates.
To sum up, the 10/hr yearly salary is far below the average in the US. But for anyone considering a side gig, the $10/hr wage may be a good complementary income and a way of covering some monthly bills.
Anyone working 40 hours a week can expect a gross weekly income of $400. If you work the same hours throughout the year, your net wage, meaning wage after taxes, will be $354.30.
If you compare it with the average US hourly wage of $26, it still has plenty of room for improvement. However, it’s a step up from the federal minimum wage for nonexempt employees at $7.25 per hour.
Assuming you work 40 hours per week, you can expect a gross biweekly wage of $800. If your hourly rate stays the same throughout the year, the biweekly wage will be $650.70 after federal and FICO taxes. Check if your place of residence levies a state income tax, which will further influence your net wage.