$20 an Hour Is How Much a Year? (2024)

If you’re looking for a new job — or just looking for a raise — it’s helpful to be able to compare hourly wages to other pay methods.

To figure out how much $20 an hour is per year, multiply $20 by how many hours you work. For most full-time jobs, that’s 40 hours a week for 52 weeks per year. If you don’t take time off, an hourly wage of $20 translates to an annual pre-tax income of $41,600.

What Does $20 an Hour Look Like for Other Pay Periods?

The table below shows what the gross pay will be for different pay periods if you make $20 per hour. The figures in this table assume that you didn’t have any time off.

It’s important to remember that gross pay is not the same amount that ends up in your bank account.

Take-Home Pay After Taxes

Taxes can take a big chunk out of your paycheck, and the amount can vary wildly between individuals, even with the same hourly pay. Here are some taxes you’ll need to be aware of when trying to convert $20 an hour to an annual salary.

Federal Taxes

The United States uses a progressive tax system, which means that, as income goes up, the tax rate goes up. Each individual’s income is broken into brackets, and each bracket has its own rate.

For 2023, the first $11,000 is taxed at 10%. The next bracket — any income from $11,000 to $44,725 — is taxed at 12%. If you made $20 an hour, or $41,600 for the year, in 2023, you would fall into the 12% tax bracket.

State Income Taxes

The example doesn’t include state income taxes or other deductions or strategies to lower your tax bill. Most states use a progressive tax system similar to the federal government’s. Nine states use a flat rate:

• Arizona
• Colorado
• Idaho
• Illinois
• Indiana
• Kentucky
• Michigan
• Mississippi
• North Carolina
• Pennsylvania
• Utah

Iowa and Georgia are both planning to switch to a flat income tax in the future.

Some states don’t have any income tax, which may simplify your math. The states that have no income tax:

• Alaska
• Florida
• Nevada
• New Hampshire (taxes dividends and interest)
• South Dakota
• Tennessee
• Texas
• Washington (taxes high capital gains)
• Wyoming

On the other hand, these are the states (and district) with the highest individual income tax:

1. California (13.3%)
2. Hawaii (11%)
3. New York (10.9%)
4. District of Columbia (10.75%)
5. New Jersey (10.75%)
6. Oregon (9.9%)
7. Minnesota (9.85%)
8. Vermont (8.75%)
9. Wisconsin (7.65%)

Good To Know

Is $20 an hour a good wage? “Good” is relative. The median household income in 2021 was $70,784. That breaks down to $34 per hour. So $20 an hour is quite a bit below the median wage.

Advice for Living on $20 per Hour

If you are single and live in an area that has a low cost of living, then it might be easy, or even comfortable, for you to live on $20 an hour. If you live in New York and have a couple of dependents, then $20 an hour is going to be a struggle.

There may be some situations where $20 an hour just isn’t going to work and other times when $20 an hour is almost luxurious. For everyone in between, here are some tips for making living on $20 an hour a little easier.

A simple option is the 50/20/30 budget — popularized by Sen. Elizabeth Warren. That breaks down your take-home income into 50% for mandatory expenses, 20% for savings and debts and 30% for discretionary spending.Of course, these percentages won’t work for everyone, so you can adjust the categories to what best fits your needs.

You can find more involved budget advice from experts such as Dave Ramsey or use a budgeting tool like You Need a Budget. If you like having the utmost control, you can make your own budget in Google Sheets or Excel.

Information is accurate as of April 17, 2023.

The article above was refined via automated technology and then fine-tuned and verified for accuracy by a member of our editorial team.