Last Updated: October 6, 2022
Job seeking is a stressful affair. You apply for a position and start wondering: will they contact me, will I be called in for an interview, will they give me a job or a counteroffer?
They finally call you and offer you a $27/hour job. Having expected a fixed salary, you ask: “how much is 27 dollars an hour annually?”
The person on the other end of the line tells you that working a regular eight-hour shift, or 40 hours per week, would bring you $56,160 per year. But is this the gross or net amount? What about weekly and monthly payments?
Save your prospective employer time and let them focus on other important questions.
We’ve got you covered. Just read on!
$27 an Hour Is How Much a Year After Taxes?
Hourly wages are a great way for companies to assess new talent or offer entry-level positions. They’re also common in seasonal work, project-based assignments, and positions where the worker may not be guaranteed a certain number of hours per week. If you get paid on an hourly basis, you should understand how to compute your annual pay from your hourly compensation and how much you’ll lose on taxes.
Never forget that when they give you a job and tell you how much you’ll make, they’re talking about gross income, not net income. So, after all deductibles, how much will you genuinely bring home on an annual basis?
One year has 365 days, which is 52 weeks and one day. Every four years, we have a leap year with one extra day. For our calculations, we’ll use only 52 weeks. We assume your working week is 40 hours (5 days x 8 hours) without overtime.
52 x 40 = 2,080 work hours per year
We’ll then multiply that number by $27 to get your total annual income of $56,160.
Now come the deductibles and taxes. For our calculation, we’ll consider that you aren’t married and don’t have any deductibles like child care, which only leaves us with taxes.
So, how much do you earn a year when everything is taken out? With $27 per hour, your annual salary would be around $44,000. To understand how we got to this rough number, we first need to explain how we calculate taxes.
We first need to estimate your taxable income by subtracting the standard deduction of $12,950 for 2022 from your total annual salary. In our case, that would be:
$56,160 – $12,950 = $43,210
We then need to calculate the federal income tax for each bracket. The first bracket is taxed at 10%, and the amount we need to multiply it by is $10,275. So 10% of $10,275 is $1,027.50. The next bracket is taxed at 12%, and the amount we need to multiply it by is $31,500. So 12% of $31,500 is $3,780. And lastly, the final bracket, where the rest of our taxable income falls, is taxed at 22%. So 22% of $1,435 is $315.7. This means that, with our 27 dollars an hour salary, the annual federal income tax would be $5,123.20 (the sum of all brackets).
We also have to consider the Federal Insurance Contributions Act (FICA) tax paid by your employee and you. The FICA tax (7.65%) is made up of the Medicare tax (1.45%) and the Social Security tax (6.2%). The FICA tax, in our case, is $4,296.24. When you sum up all the taxes, you get $9,419.44. To calculate your annual net income, we just need to take your annual gross income of $56,160 and subtract all the taxes, which is $9,419.44, and you get $46.740.56.
If you live in one of the nine states that don’t impose an additional income tax, then that’s the amount you’ll take home at the end of the year. These states are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. The rest, though, have either a fixed rate or a progressive taxing system in place. Thus, state income taxes vary greatly, with California, the most expensive US state to live in, having the highest maximum rate at 13.3%.
So, if we take a 5% state income tax rate as an example, we get a final net amount of $43,932. But, once again, this is just an example and rough estimate. For a more precise figure, use an online take-home paycheck calculator.
$27 an Hour Is How Much a Month?
Now that we have your annual net and gross salary, it’s easy to calculate how much you earn monthly. Your gross monthly income will be $4,680. After taxes, your net monthly income will be around $3,715.
Our estimates assume you work full-time, but let’s suppose you work 20 hours weekly. Your compensation will be half of your monthly income, which is also your bi-weekly salary if you work full-time. Your part-time $27 per hour monthly salary and full-time bi-weekly salary will be $2,340 before taxes and around $1,715 after taxes.
$27 an Hour Is How Much Weekly?
To get your weekly gross and net salary, we just need to divide your annual salary by the number of weeks in a year, which is 52.
$56,160 / 52 = $1,080 (before taxes)
$44,00 / 52 = $857 (after taxes)
Is $27 an Hour Good Money?
If you asked this question in 2019, we would say yes, but the current average hourly salary is just above $32, which is $5 more than you would be making. Even your yearly salary of $56,160 is less than the lowest state average annual salary, which is $65,156 in Mississippi.
So, we can’t say that $27 an hour is good money, as there is room for improvement. Statistics are, well, statistics. We adore them, but they are flawed because they do not give us a complete picture.
When we look at the cost of living in different parts of the country, $27 an hour might be a livable wage. According to the MIT Living Wage Calculator, the hourly wage needed to support a single adult with no children in New York City is $22.71. The same person would need to make $16.39 in Houston, $25,55 in San Francisco, and $16.20 in Detroit.
So, $27 an hour is how much a year?
Gross – $56,160
Net – around $44,000
While it’s not a lot of money in general, it might be enough to get by until you get a promotion or find a new job. Don’t forget, the best time to search for a new job is when you already have one.