$50,000 a year sounds great but how much is it an hour? Let’s dig into what that salary actually gets you.

Getting a new job can be one of the most exciting things in your life, especially if it pays well! Congrats! This is your first job that pays a salary; no more working for $13.78 an hour for you! Nope, you’re making a fantastic salary!

But then you start to wonder, and you break out your phone’s calculator. You try and remember all your bills, and you wonder; $50,000 a year is how much an hour? It’s got to be more than my last job… hopefully.

Don’t worry; today we’re going to break down that $50,000 salary to hourly pay and see precisely what it can buy with different budgeting methods.

$50,000 a year is how much an hour

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$50,000 a year is how much an hour?

Okay, let’s cut to the chase; you want the numbers so let’s get right to it!

  • Let’s say you work the traditional 40 hr workweek:
    • $50,000 / 52 weeks a year = $961.54 a week / 40 hours = $24.03 an hour 
  • If you work 50 hrs a week (which would be more typical for a salaried worker):
    • $50,000 / 52 weeks a year = $961.54 a week / 50 hrs = $19.23 an hour

How much is $50,000 a month?

  • $50,000 / 12 months = $4166.67 gross pay

How much is $50,000 bi-weekly?

  • $50,000 / 26 pay periods = $1,923.07 gross pay

$50,000 is how much a day?

If you work 40 hours a week, then that’s 8 hours a day = $192.24 a day when you’re working. BUT, remember you are salaried! That means you get paid essentially every single hour of every single day (kind of fun to think of it this way). So that means…

  • $50,000 / 8760 hours in a year = $5.71 an hour, which is a lot less impressive than when you say $50K annual salary. Oh well.

Now just because you make a $50,000 annual salary, you don’t take that amount home! You still have to pay taxes. Let’s look at how that impacts your take-home (after-tax) pay.

If you make $50,000 a year how much is that after state and federal taxes?

Figuring out your tax burden is such a vital part of understanding your pay. If you do the math and base your bills on before-tax income, you’re in for a nasty shock! So always consider how much you’ll pay in taxes.

For example, let’s assume you’re a single filer with one exemption:

  • If you live in CA, which has a very high state income tax rate…
    • You’ll pay $9,675 in FICA, federal and state taxes (roughly)
    • You’ll take home $40,325
  • If you live in FL, which doesn’t have state income tax, then…
    • You’ll pay $8,140 in FICA and federal taxes
    • You’ll take home $41,861

You can go here to give you a rough idea of how much you’ll pay. Remember, this is just a reasonable rough estimate, not a guarantee! Or, if you want a super quick calculation, taking 30% off your gross is a good and safe estimate.

Don’t get so busy making a living that you forget to make a life.

Dolly Parton

What about retirement contributions?

I am so glad you asked! Putting money into your employer-sponsored retirement plan is one of the smartest things that you do for long-term financial planning! So yes, you absolutely want to do this!

Companies usually match a specific amount (as a percentage) of the pay that you put in. So if you put in 5% of your gross income into a traditional 401k, they will also match that 5%. Usually, companies have a max amount that they will contribute; 5% is a general figure. 

So, if you make $50,000 a year and get paid monthly, that means your gross pay is $4166.67 a paycheck; you then contribute 5% of that to a 401k, which is $208.33. You then get taxed on the remainder, which is $3,958.34. So essentially, you’re losing $2,500 from your annual pay, but it’s well worth it as now you have contributed approximately $5,000 into your tax-advantaged retirement account!

How much does medical insurance take from my $50,000 annual salary?

Sorry to say that we’re not done with your paycheck deductions. According to the US Bureau of Labor, “Health care is typically one of the most expensive benefits for employers to provide, constituting 8.2 percent of total compensation for civilian workers in March 2020.”

It’s important to note the precedence of what get’s taken out of your paycheck and when. Here’s the order according to the US Office of Human Resources

  • Retirement contributions come out first, followed by
  • Social Security tax
  • Medicare tax
  • Federal income tax
  • Health insurance
  • Life insurance
  • State income tax
  • Local income tax
  • Collections to the US government (if applicable)
  • Collections to Court ordered rulings (if applicable)
  • *Everything below here is optional*
  • Health Care/Limited-Expense Health Care Flexible Spending Accounts 
  • Dental 
  • Vision 
  • Health Savings Account 
  • Optional Life Insurance Premiums 
  • Long-Term Care Insurance Programs
  • Dependent-Care Flexible Spending Accounts 
  • Thrift Savings Plan (TSP) 

Did your jaw just drop? Mine too; that’s a lot of deductions.   Let’s focus on the medical deductions and what that does to your paycheck. Same scenario as above, a single filer with one deduction, living in California…

  • $50,000 / 12 months = $4,166.67
  • Minus 5% in retirement contributions $208.33
  • Minus FICA taxes = $317.41
  • Totals $3,640.93
  • Minus 8.2% average medical insurance costs
  • That takes out $298.55 leaving you with $3,342.38
  • Minus federal income tax of $332.50
  • Minus state income tax of $114.41, leaving you with $2,895.47
  • Minus misc small deduction averaging $75 ( a total guess)
  • Net income $2,820.47

What does my monthly budget look like on a $50,000 annual salary?

Okay, let’s take the figures from above and figure out your budget. So we’re using a take-home pay of $2,820.47.

The 50/30/21 budgeting method

  • 50% Needs: $1410 for housing and utilities
  • 30% Wants: $846 for wants
  • 20% Savings: $564 for saving 

Dave Ramsey recommended budget percentages

I am a fan of Dave’s budget percentages, but I realize that it can be too detailed and constraining for some. But let’s just see what everything comes to…

  • Housing 25%: $705
  • Insurance 10 – 25%: $282 – $705
  • Food 10-15%: $282 – $423
  • Giving 10%: 282
  • Saving 10%: $282
  • Transportation 10%: $282
  • Utilities 5-10%: $141 – $282
  • Health 5-10%: $141 – $282
  • Recreation 5-10%: $141 – $282
  • Personal Spending 5-10%: $141 – $282
  • Misc 5-10%: $141 – $282
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Is $50,000 a year good?

Depending on where you live, these figures may not be a suitable living wage. Such as in a high cost of living area. Your housing and food could cost considerably more than the allotted amount. That’s okay; these are just suggested starting points, so adjust as needed.

According to the Bureau of Labor Statistics for May 2020, the average annual wage for a US worker across all occupations is $56,310. So a $50K a year job is less than the average. HOWEVER, where you live plays a significant impact on if it’s considered a good wage. For example, the BLS states that in NYC, the average yearly salary is $71,050. While in Idaho, the average salary is $46,800. But remember, for these BLS averages, there are a few people that totally skew the numbers.

A better number is the median wage, that’s the halfway point of the number of people. The BLS site shares info on the national median hourly wage being $20.07. Remember, with a 40 hr work week that makes your $50,000 salary at being $24 an hour, so well over the median wage.

Another factor is your household income (as a whole) not just your income. So The US Census says that in 2019 (the most recent data), that the median household income is $62,843. So if you make $50,000 and your spouse makes $50,000 then you two are doing great!

Let’s go ahead and take a look at a few other typical salaries.

$30,000 a year is how much an hour?

  • Let’s say you work the traditional 40 hr workweek:
    • $30,000 / 52 weeks a year = $576.92 a week / 40 hours = $14.42 an hour 
  • If you work 50 hrs a week (which would be more typical for a salaried worker)
    • $30,000 / 52 weeks a year = $576.92 a week / 50 hrs = $11.54 an hour

How much is $30,000 a year in monthly pay?

  • $30,000 / 12 months = $2,500 gross pay

How much is $30,000 a year in bi-weekly pay?

  • $30,000 / 26 pay periods = $1,153.84 gross pay 

$40,000 a year is how much an hour?

  • Let’s say you work the traditional 40 hr workweek:
    • $40,000 / 52 weeks a year = $769.23 a week / 40 hours = $19.23 an hour 
  • If you work 50 hrs a week (which would be more typical for a salaried worker)
    • $50,000 / 52 weeks a year = $769.23 a week / 50 hrs = $15.38 an hour

How much is $40,000 a year in monthly pay?

  • $40,000 / 12 months = $3,333.33 gross pay

How much is $40,000 a year in bi-weekly pay?

  • $40,000 / 26 pay periods = $1,538.46 gross pay 

$60,000 a year is how much an hour?

  • Let’s say you work the traditional 40 hr workweek:
    • $60,000 / 52 weeks a year = $1,153.85 a week / 40 hours = $28.85 an hour 
  • If you work 50 hrs a week (which would be more typical for a salaried worker):
    • $60,000 / 52 weeks a year = $1,153.85 a week / 50 hrs = $23.08 an hour

How much is $60,000 a year in monthly pay?

  • $60,000 / 12 months = $5,000 gross pay

How much is $60,000 a year in bi-weekly pay?

  • $60,000 / 26 pay periods = $2,307.69 gross pay 

Jobs that make $50,000 a year

There are many jobs that make $50,000 a year; let’s look at Indeed’s list…

  • Property manager – $51,903
  • Executive assistant – $51,976
  • Law enforcement officer – $53,567
  • Claims adjuster – $55,002
  • Pipe welder – $55,211
  • Insurance specialist – $55,293
  • Warehouse training manager – $55,752
  • Sales representative – $56,247
  • Sanitation supervisor – $57,673
  • Xray technologist – $58,738

What is a salaried job?

Salaried employees are usually called “exempt” employees. Being salaried means that you get paid the same flat amount every payday, usually once a month. No matter how many hours you do or don’t work, the pay is the same unless you take unpaid time off. people say, “I get paid $50K a year.”  

Pros of being salaried

  • You can better budget because you know exactly how much you’ll get each paycheck
  • You don’t have to punch in/out of a timeclock
  • You can work fewer hours and still get paid the same.
  • These positions usually come with a better benefits package (i.e., higher retirement contributions, etc.)
  • Higher perceived status/position in the company
  • Get paid time off (paid vacation, sick leave, etc.)

Cons of being salaried

  • No overtime pay, so if you work more hours, it’s not reflected in the pay
  • Higher responsibility and more duties to perform
  • Might be expected to take work home with you.

Note: According to the US Dept Labor, “Effective January 1, 2020, employees must earn at least $684 per week ($35,568/year), receive a salary, and perform particular duties (as defined by the FLSA) to be considered exempt from overtime requirements under federal guidelines.”

What is an hourly job?

Hourly rate means you get a set amount per hour of work that you do, usually bi-weekly (every two weeks). People say, “I make $13.50 an hour.”

Pros of being hourly

  • These positions usually have less responsibility.
  • There are federal and state laws (as well as company HR policies that protect the company from working you too much. For example, a company might say, you cannot work over 80 hours in a two-week pay period.
  • You get overtime if you work over either 8 hours a day or over 40 hrs a week (see your company policy regarding OT).

Cons of being hourly

  • Your pay is usually lower than salaried
  • You typically don’t have a set schedule (i.e., Mon-Fri 9-5 pm).
  • In some companies with Unions, you may have to pay union dues whether you like it or not.
  • You get a biweekly paycheck, and if your bills aren’t spread out well during the month that could cause a cash flow problem.

If you’re curious, the federal minimum wage is $7.25 (as of August 2021), and you can find your state’s minimum wage here.

Do you know your real hourly wage?

Okay, so I know I’ve taken you through quite a loop in deductions, but there’s one more aspect to consider. It’s your real hourly wage. Yes, we figured out your take-home pay, but what portion of that pay do you spend on work-related things? Things that you wouldn’t have to pay/buy if it weren’t for your job?  

For example…

  • You pay $50 a month in office worker birthday cards, balloons, etc
  • You take the train to get to work, that’s $70 for a monthly pass
  • You have to wear nice suits, that’s a dry cleaning bill of $60 a month
  • You go out to lunch every day with co-workers; that’s $15 a day (about $315 a month).

Yes, you’d incur other costs with different jobs, but they might be more expensive or less expensive.

Let’s take the $50,000 a year job with the understanding of a 40 hr work week. That’s $24 an hour. We’ll add up the four bullet points above to be $495 a month. Divided by 21 average workdays in a month = $23.57 a day. Since you work 8 hours a day, that’s $2.95 an hour spent on work stuff.

So your hourly pay went from $24 an hour to effectively $21 an hour that you can use for your own spending. That’s your real hourly wage!

So super quickly, your $50,000 a year job went down to $43,680 a year. So you’re spending over $6K a year just to do your job.  

At the end of the day

Getting a salaried job can be a huge boost to your annual income, but be sure you are figuring out all aspects to see if it’s actually worth it and if you can afford it. There are a lot of deductions that come out of your paycheck, which may not make it so attractive, or the number of hours you put in maybe a lot more than you want to do.

Either way, figuring out your pay (i.e., $50,000 is how much an hour) can be a good way to gauge the attractiveness of the job offer. If it’s your dream job, then great! You’re going to love it!

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What do you think, is $50,000 a year a good salary?