Maybe you’ve just come across a job listing or been offered a job that pays $25 an hour, and it’s time to crunch the numbers. Is $25 an hour good? 25 dollars an hour is how much a year? What about per month, week, and day?
TL;DR: If you just came for the short answer to 25 dollars an hour is how much a year? Short Answer: $52000 before taxes.
How much might you be left with after taxes? Is $25 an hour different if you’re a freelancer vs. a W-2 employee for a company? Let’s dive into these questions and more information about how well you might be doing with a $25/hr job.
$25 An Hour Is How Much A Year?
Let’s assume you’re working full-time, meaning 8 hours a day, 5 days a week, 52 weeks a year (including paid vacation time). We can use some simple multiplication to calculate how $25/hr adds up over each time period:
- Daily: $25 x 8 hours = $200 a day
- Weekly: $200 a day x 5 days = $1,000 a week
- Monthly: $1,000 a week x 4.33 = $4,330 a month
- Yearly: $1000 a week x 52 weeks = $52,000 a year
These are all the gross figures, meaning they’re what you earn before taxes are taken out.
Your specific tax rates will vary depending on where you live, whether you’re filing jointly or singly, what deductions you qualify for, and so on. 25% is generally a good ballpark figure to estimate for federal and state taxes.
Using that 25% number, we can multiply our previous figures by the remaining 75% to figure out about how much take-home pay you can expect after taxes when you earn $25 an hour:
- Daily: $200 x 75% = $150 take home
- Weekly: $1000 x 75% = $750 take home
- Monthly: $4330 x 75% = $ 3,247 a month after taxes
- Yearly: $52000 x 75% = $39,000 a year after taxes
You can use a U.S. tax calculator to more specifically estimate how much to expect in taxes.
Note that if you’re earning $25/hr as a freelancer, you’ll pay even more, since you’re responsible for all your FICA taxes instead of having those covered by an employer. Personally, I usually set aside more like 1/3 of my income because of this.
Is $25 an Hour Good?
In the 2023s, is $25 an hour a decent, livable wage? The answer here is both simple and complicated: it depends.
Since the federal poverty level for individuals in 2023 is $14,580, it’s reasonable to expect that earning $25 an hour should enable you to survive financially. However, the question remains whether you can truly live comfortably on that income.
The biggest factor is simply where you live. If you’re a digital nomad living overseas and making $25 US, you can live in luxury in a penthouse apartment.
If you live in Vermont, you can probably afford a mortgage on a decent house. But if you’re in a city like Chicago or Denver, $25 an hour will probably get you a closet with six roommates.
Let’s look at an example monthly budget for someone making $25 an hour. Since housing is one of the biggest expenses, we’ll start there, using the rule of thumb that you shouldn’t spend more than 30% of your gross monthly income on housing.
We’ll also budget in 15% on savings—you can always save more than this if you’re able, but think of saving and investing as a priority, not just “whatever I have left after my spending.” That’s money you’re paying to your future self to make your life better!
Net Monthly Income: $3,247
- Housing: $1300
- Savings: $487
- Car payment: $300
- Utilities: $200
- Insurance: $200
- Food: $200 (try some of these $5 meal prep ideas)
- Phone: $20
- Discretionary: $340 (entertainment, new clothes, personal and household hygiene, extra savings, etc.)
Depending on where you live, this kind of budget might seem extremely doable, or it might feel like there’s not much wiggle room.
Affording everything and managing to save will be a lot easier if you have a dual-income household. Two people who each work full-time and earn $25 dollars an hour have a net take-home of $6,495, which is a pretty solid amount for living well in most places!
What do people who live off $25 an hour say?
In different Reddit threads people have mixed opinions:
“I make around $25/hr. People who make $25/hr are typically on a career track to make 6 figures, which is $50+/hr. The only way to achieve that goal is to be allowed through the gate and beyond the ceiling by people on the other side making 6 figures. Becoming friendly with these.. people is considered all “apart of the game” and you either assimilate entirely or hate yourself. On $25/hr you can live okay if you budget well. But many get locked in on where they want to be and discard their achievements, striving for that Instagram lifestyle. Also, many people lack awareness of the advantages they’ve been afforded despite their efforts (being born into wealth, etc) so, they think anyone who hasn’t reached their level is lazy or unworthy in comparison.” – Killax_ said.
“I make 25 an hour and I feel like I can barely survive. We all deserve way more.” – Fullmetalmycologist.
“$25/hr would be life changing money for me. Like buying the groceries I want instead of buying what I can afford life changing.” – TwoSecondsToMidnight added.
Looking to stretch that $25 an hour wage as far as you can so you can live well and bump up your savings rate? It’s totally possible if you’re determined enough! Check out these money saving challenges to get the ball rolling.
If you can only strip your budget down so far and you can’t find a job paying more than $25 an hour, consider supplementing your work with side gigs on nights or weekends. This can be as simple as doing surveys on Swagbucks while you watch TV, or walking dogs over the weekend mornings, or even starting your own business. Check out 114 side hustle ideas here!
TL;DR: If you just came for the short answer to 25 dollars an hour is how much a year? Answer: $52000 before taxes.