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18 Dollars An Hour Is How Much As A Yearly Salary (Budget, taxes, jobs, & more)
Have you recently been offered a job that pays $18 an hour? Or are you wondering if $18 an hour is enough to live on? If so, you might be wondering, “18 dollars an hour is how much a year?”
You’ll want to calculate your annual earnings so you can create a financial plan for your money. You can also figure out income taxes on your gross earnings to decide if an $18 hourly wage can cover your cost of living.
In addition, here are other common questions about $18 per hour:
- How much is $18 an hour full-time? Part-time?
- How much is $18 an hour after income taxes?
- How much is $18 an hour per month? Biweekly? Per week? Per Day?
- How can I live on $18 an hour? If not, how do I increase my wage?
- How do I budget $18 an hour?
- Is $18 an hour good pay?
Keep reading this complete guide to learn the answers to these questions and a lot more about making $18 an hour. Find out how you can support yourself, see a sample budget, and find jobs that pay this hourly salary.
Let’s get started!
18 dollars an hour is how much a year?
$18 an hour comes out to $37,440 a year.
However, this total relies on several factors. If this annual salary is something you want to make, you’ll need to work 40 hours per week, for 52 weeks out of the year:
$18 x 40 hours x 52 weeks = $37,440
Keep in mind that this total is your personal income before taxes and assumes paid sick leave and vacation time. I’ll go over what this average salary would look like considering taxes and unpaid time off a little later.
But first, let’s talk about how your earnings will differ between full-time and part-time work.
An $18 hourly wage is how much as a full-time annual salary?
The IRS identifies a full-time employee as someone who works between a 30 and 40 hour work week. So, what if you don’t get a full 40 hours per week?
If you make $18 an hour, you can expect your pre-tax income to be $28,080 working 30 hours every week:
$18 x 30 hours x 52 weeks = $28,080
So, if you maintain your full-time status (working between 30-40 hours every week), you can bring in between $28,080 and $37,440 a year (not including overtime hours).
Again, these are pre-tax numbers that include paid benefits such as vacation and sick leave. But what if you don’t get those benefits?
Most people take at least a week of vacation time every year, and many will take two and even up to three. If you don’t get paid for this time off, your income will obviously be reduced.
Also, if you get sick and need to take a day or two off, or have to go into the hospital for even longer, you’ll lose out on some income.
Later, we’ll look at both scenarios to see how much your income would be reduced. Now, let’s consider how part-time hours would affect your income.
$18 hourly is how much annual income if I work a part-time job (20 hours per week)?
Maybe you’re just looking for a part-time job to make a little extra money. If so, we can figure out your earnings based on fewer hours.
For the purposes of this example, let’s assume you work an average of 20 hours per week. We’ll also maintain that you’re working 52 weeks out of the year.
$18 x 20 hours x 52 weeks = $18,720
Again, these earnings are before any taxes, insurance, and 401(k) contributions are taken out.
As you can see, you can simply plug in the exact number of hours you work to the equation. So, whether your part-time job gives you a consistent 24 or 18 or 10 hours a week, it’s easy to figure out your annual earnings. If your weekly hours change, you can take the average and get a ballpark amount.
What if I don’t get paid for vacation or sick days?
If you’re an hourly employee, it’s possible that any time off won’t be paid by your employer. So, how would unpaid vacation time and sick days affect your earnings?
This, of course, would depend on if you’re working full-time or part-time hours, and how much time you take off. Working on an hourly basis, you would simply multiply $18 dollars times the number of hours and weeks you work.
Let’s look at a few different scenarios.
#1 As a full-time employee working 40 hours a week:
If you take one week off of unpaid vacation or sick leave, you can expect your yearly base salary to be $36,720 per year:
$18 hour x 40 hours x 51 weeks = $36,720
If you take off two weeks unpaid vacation or sick leave, you can expect your yearly base salary to be $36,000 per year:
$18 hour x 40 hours x 50 weeks = $36,000
#2 As a full-time employee working 30 hours a week:
If you take one week off of work without getting paid, you can expect your yearly base salary to be $27,540 per year:
$18 hour x 30 hours x 51 weeks = $27,540
If you take two weeks off without getting paid, you can expect your yearly base salary to be $27,000 per year:
$18 hour x 30 hours x 50 weeks = $27,000
#3 As a part-time employee working 20 hours a week:
If you take one week off of work without getting paid, you can expect your yearly base salary to be $18,360 per year:
$18 hour x 20 hours x 51 weeks = $18,360
If you take two weeks off without getting paid, you can expect your yearly base salary to be $18,000 per year:
$18 hour x 20 hours x 50 weeks = $18,000
What about sick days?
For every day of sick leave, you can expect your gross earnings to reduce by $144 a day:
$18 x 8 hours per day = $144
Taking time off from work to spend time with family and get refreshed is important. Just make sure your annual expenses can be covered by any reduction in income.
So far, all calculations for an $18 hourly salary have been before tax is taken out. That’s because taxes can vary widely, depending on your circumstances.
Next, let’s look at what your take-home pay would be, based on standard tax rates.
How much money is an $18 hourly wage annually after taxes?
Everyone knows that your taxes can take a big bite of your gross salary. Because your tax bill will depend on a variety of factors, it’s impossible to give you an exact income after taxes are taken out.
However, you can get a general idea if we assume three things:
- You are filing as a single person
- You are taking the standard deduction
- Your gross income is $37,440 (40 hours a week, 52 weeks a year)
In 2022, the standard deduction for a single person (or married filing separately) is $12,950. With a gross income of $37,440, you would stay within the 12% tax bracket (see current tax table).
For all taxpayers (regardless of income), the first $10,275 of taxable income is taxed at a rate of 10%. After that, you would be taxed 12% up to your annual gross earnings of $37,440.
You also need to consider FICA, which are Social Security and Medicare taxes. Social Security would take 6.2% out of your annual gross income, and Medicare taxes 1.45%. (FICA taxes are reduced from gross income and do not affect Adjusted Gross Income.)
Putting all of these taxes together, let’s calculate what your net income would be.
Gross annual salary
Minus Standard Deduction
Equals Taxable Income
Subtract 10% of $10,275 from gross income
Subtract 12% of ($24,490 - $10,275) from gross income
Subtract FICA Taxes (7.65% of gross income) from gross income
After using the standard deduction, then taking out Federal and FICA taxes, the net income for an $18/hour annual gross salary would be $31,843/year.
But what about state taxes? Obviously, what you pay in state income tax will depend on where you live.
For those states that tax income, you could pay between 1.10% (North Dakota) and 7.9% (Hawaii) for a $37,440 income.
If you want to cut your tax bill, consider living in one of the nine states that don’t collect income tax. These include Alaska, Florida, Nevada, South Dakota, Texas, Washington, Wyoming, Tennessee, and New Hampshire. Otherwise, check out these 2021 State Income Tax Rates to find your state’s percentage.
Of course, this is a general example and your bottom line will look different. Once you consider your state tax rate and other deduction factors, you will have a more accurate idea of what you’ll pay in taxes.
How much earnings is an $18 hourly wage per month?
It’s a good idea to know your monthly income if you’re making $18 an hour. This can help you you create a monthly budget to determine how much of your income will go towards housing, transportation, food, and other monthly expenses.
Working 40 hours a week, you can expect to make $3,120 per month:
$37,440 ÷ 12 months = $3,120 a month (before tax)
This calculation assumes you are getting paid for 52 weeks of the year. However, some months have fewer days than others. So, this number is an average.
If you take any unpaid time off, you’ll need to adjust the total. Remember to also account for other paycheck and tax deductions, and any retirement contributions, when determining your monthly budget.
Using the same assumptions used above to calculate taxes, you could expect to bring in $2,654 every month after taxes are taken out:
$31,842 (net income) ÷ 12 months = $2,653.55
If you’re a part-time worker, getting 20 hours a week, you can expect to make an average of $1,560 a month:
$18,720 ÷ 12 months = $1,560 a month (pre-tax)
This would be reduced to $1,327 after taxes. This is determined by dividing the net income for a 40-hour work week in half, and then by 12 months:
$31,842.54 ÷ 2 = $15,921.27/year after tax
$15,921.27 ÷ 12 months = $1,326.78 net each month
How much is an $18 hourly rate per week?
If you prefer following a weekly budget, you’ll need to know what $18 will make you every 7 days.
This is simple to calculate. If you work 40 hours a week, your weekly paychecks will be $720 before taxes or any deductions:
$18/hour x 40 hours = $720/a week
This would be reduced to $612/week after taxes
$31,842.54 (net annual wages) ÷ 52 weeks = $612.36/week
If you only work 30 hours a week, your weekly salary would be $540 every week:
$18/hour x 30 hours = $540/weekly
To figure out your net income for less than 40 hours a week, we can calculate what $18 is per hour after taxes, and then multiply by the number of hours you work. We start by dividing the 40-hour net income by 52 weeks:
$31,842.54 (net annual wages) ÷ 52 weeks = $612.36/week
$612.36 ÷ 40 hours = $15.31/hour
$15.31/hour x 30 hours/week = $459.27/week
So, after taxes, you can expect to bring in a weekly net income of $459 if you work 30 hours.
If your part-time hours total 20 hours a week, your weekly salary would be $360 every week:
$18/hour x 20 hours = $360/weekly
This would be reduced to $306 a week after tax deductions.
$15.31/hour x 20 hours/week = $306.20/week
How much is $18 an hour biweekly? Bimonthly?
Many people (like my husband) get paid twice a month, usually on the 1st and 15th. Some get their paycheck every other week. These sound like they could be the same situation, but they’re not. Let’s look at the math (again, we’re going to assume you work 40 hours/week, 52 weeks/year):
Getting paid twice a month (bimonthly) would mean you receive 24 paychecks a year:
2 paychecks a month x 12 months = 24 paychecks a year
However, if you get paid every two weeks (biweekly) , you would receive 26 bi-weekly paychecks a year:
52 weeks ÷ 2 weeks = 26 paychecks a year
Now let’s look at what income you can expect to bring in if your employer uses either of these paycheck schedules.
If you get paid on bi-monthly basis, your paycheck will be approximately $1,560 pre-tax:
$37,440 ÷ 24 weeks = $1,560 paycheck twice a month (gross)
After taxes, you can expect a twice-monthly paycheck of $1,327.
If you get paid every two weeks, your bi-weekly paychecks will be close to $1,440 pre-tax:
$37,440 ÷ 26 weeks = $1,440 paycheck every two weeks (gross)
After taxes, this will be reduced to approximately $1,225.
How much is $18 an hour per day?
Though most people don’t get paid on a daily basis, it can be helpful to know how much you’re pulling in for every full-time shift you work.
Full-time workers typically work an 8 hour work day, but you can easily adjust this calculation if you work four 10-hour days.
For an average full-time 8 hour workday, you will make $144 before taxes are taken out:
8-hour day x $18/hour= $144 a day
Your salary will be closer to $122 a day after taxes.
For a 10-hour shift, you will make $180 gross:
10-hour day x $18/hour = $180 a day
After taxes, your daily income will be around $153.
Lastly, knowing the daily net income, you can easily calculate the net hourly income by dividing by 8 hours:
$122/day ÷ 8 hours = $15.25/hour net pay
$18 an hour comparison chart
Is your head swimming with all these numbers? It can be difficult to keep it all straight!
To make things a little more organized, I’ve created a comparison chart of the various circumstances I outlined above when you’re making $18 an hour.
Tips to help you live on $18 an hour
Making $18 an hour may or may not sound like a good wage to you. It depends on the income you’re used to, what you feel your time is worth, and how much you need to cover your living expenses.
The good news is, it’s very possible to live on $18 an hour if you keep your expenses low and minimize or eliminate debt.
Here are a few tips to lower your expenses and live on $18 an hour:
- Create a budget planner that categorizes every dollar of income
- Keep your housing costs to 25% or less of your net income
- Try to get rid of any high-interest credit card debt
- Eliminate your car loan by paying it off, or trading in your car for one you can pay cash for
- Transfer all remaining debt to a lower-interest option
- Buy used items (clothing, housewares, electronics, etc) when you can
- Save money on food by using a meal plan and online grocery shopping
- Eliminate monthly subscriptions or memberships you don’t really need or use often
- Shop around for lower insurance premiums
- Reduce your cell phone bill with a no-contract carrier that only charges you for what you use
- Reduce household expenses wherever possible
The best way to find expenses that can be eliminated or reduced is to get on a budget. Whether you budget your monthly or weekly income, tracking your spending will reveal opportunities that can maximize your annual income.
Jobs that earn $18 an hour
According to the Bureau of Labor Statistics, the list of jobs below earned a 2020 median income of approximately $18 an hour. Many of those listed do not require previous experience or a college degree.
- Animal Control Worker – $18.48
- Bill Collector – $18.32
- Construction Laborer – $17.83
- Paramedic – $17.62
- File clerk – $17.75
- Healthcare Support – $19.00
- Machine Operator – $18.01
- Administrative Assistant – $19.71
- Optician – $18.53
- Motorcycle Mechanic – $18.76
- Painting Worker – $18.63
- Pest Control Worker – $18.18
- Rehabilitation Counselor – $18.05
- Shipping Clerk – $18.50
- Vet Tech – $17.43
- Amazon Warehouse worker – $18.55
Cities with a minimum wage of $18 per hour
One easy way to guarantee an $18/hour job is live in a city that has an $18/hour minimum wage. The Federal Government has set a minimum wage of $7.25/hour, but many states have their own minimum wage laws.
As of the date of this writing, there are no cities in the U.S. that pay a minimum wage of $18/hour. However, there are a few that come pretty close.
Here are the 5 U.S. cities with the highest minimum wages in the country:
#1 Seatac, Washington: $17.54/hr
(This is the highest minimum wage in the U.S. However, it only applies to employees working in the city’s hospitality and transportation industries. All other jobs make a minimum wage of $14.49/hr.)
#2 Seattle, Washington: $17.27/hr
#3 Emeryville, California: $17.13/hr
#4 Mountain View, California: $17.10/hr
#5 Sunnyvale, California: $17.10/hr
Keep in mind that a higher minimum wage indicates a higher cost of living area. You shouldn’t expect your living expenses to be the same as a city that provides a lower minimum wage.
Monthly sample budget for $18 an hour
Having a budget for any income level is important, but especially for those who are living on very limited funds. A yearly income of $37,440 will not stretch that far (especially after taxes and deductions), but you can make it work if you commit to a spending plan, adopt smart money habits, and live within your means.
Following Dave Ramsey’s budget percentage guidelines , I’ve devised a sample $18/hour budget. This monthly sample budget is based on an after-tax yearly salary of $31,788 (calculated in the tax section above), which we’ll round up to $2,650 a month.
|MONTHLY NET INCOME:||$2,650|
There are many ways to create a budget, and this is just one example. You could make it as simple as 3 categories with a 50/30/20 percentage split. The important thing is to create one you can stick to and that reflects your financial values.
Once you see a budget breakdown using net income, you may think that making $18/hour is not enough to cover your living expenses. Next, I’ll cover how this wage compares to other incomes, if you can live comfortably on this hourly salary, and how to buy a house if you’re making $18 an hour.
Is $18 an hour good pay?
To answer this question, it’s a good idea to look at how $18 an hour compares to other incomes in the U.S.
First, the Bureau of Labor Statistics 2021 4th Quarter report states that the median U.S. weekly earnings of all full-time wage and salary workers was $1,010. This would result in annual earnings of $52,520 for a 52-week paid year, and a $25.25 hourly rate for a 40-hour work week.
Comparing this median income to a full-time salary based on $18/hour ($37,440), we find that $18/hour would produce an income that’s 29% less than the national median.
(*A median statistic is different than an average statistic. The median indicates a halfway point, where 50% of the data fall below the middle point, and 50% fall above. In contrast, the average is the sum of all data points, divided by the number of data points. This means that outliers (extremely high or low data points that are atypical) can skew the result.
Also, these statistics reflect individual wages, and not a median household income that combines multiple salaries.)
Keep in mind that these numbers don’t differentiate between gender, job type, education levels, cities, and other social and economic factors.
In addition, $18 per hour is more than any minimum wage in the U.S. In fact, the average of the top 5 minimum wages in the country (listed previously) comes out to $17.23/hour. This puts an $18 per hour wage 4.5% above this average.
Does this mean that $18 an hour is good pay? It depends.
If you live in a low cost of living area, like a small town in Oklahoma, you might think so. If you live in a coastal city in California – like San Francisco or San Diego – probably not so much. It all depends on the lifestyle you want
Next, let’s talk about how you can live on $18 an hour.
Is $18 an hour enough to live on?
Overall, making $18/hour will limit your options considerably. Because it is significantly less than the median national wage, this level of income could make it very difficult for you to save enough for a comfortable retirement or a college education, especially if you have significant debt.
To determine if $18 an hour is a livable wage for yourself, consider the following factors:
- The number of people you need to support
- The cost of living in your area
- How much debt you currently have
- The bank balance of your savings/emergency fund
- Your money values and financial priorities
If you have a lot of debt, live in a high-cost city, or have no savings in the bank, then $18/hour probably won’t be a sufficient income to support you. Even if you are a very frugal person, you will have much difficulty covering all of your expenses.
Probably the most important factor is where you live. If you can reside in a state with a cost of living lower than the national average, you’ll find it easier to cover your basic expenses with $18 an hour.
The three states with the lowest cost of living index are Mississippi (86.1% of the national average), Arkansas (86.9%), and Oklahoma (87%).
If you’re not in a position to move to a different city or state, there are ways to get creative with increasing your income. For example, you could cut your living expenses by getting a roommate, or generate additional income with a second job.
Later, we’ll cover some possibilities for making more money. Next, let’s talk about homeownership with an $18/hour income.
Is $18/hour enough to buy a house?
Buying a home with an $18/hour income will depend on several factors, such as:
- Sale price of the house
- The amount of your down payment
- Property taxes
- How much debt you have
- Cost of living
Most banks will determine your ability to pay back a mortgage based on the 28/36 rule. These two numbers represent maximum percentages for two different ratios.
The first is the front-end ratio, which is your total monthly housing expenses divided by your gross monthly income. Housing expenses include principal and interest, PMI, property taxes, and homeowner’s insurance.
Most banks want to see your front-end ratio at 28% or less.
The second is the back-end ratio, which is also known as your debt-to-income ratio (DTI). This is your total minimum monthly debt payments divided by your gross monthly income.
Banks typically prefer your debt-to-income ratio not to exceed 36%.
Knowing this information, you can estimate how much house you can afford.
Working a full-time 40 hours per week schedule at $18 per hour, your annual gross income would be $37,440. This is an $18/hour monthly income of $3,120 before taxes. Therefore, your total monthly house payment should not exceed 28%, which is $874.
In addition, your total monthly debt payments should not exceed 36% of your monthly wage, which is $1,123. This means that your minimum monthly debt payments, besides your mortgage payment of $874, should not be more than $249.
The bottom line is, it mainly comes down to your ability to make the monthly payment. The more money you can put down, the lower your payment will be, and the greater your chances of being approved for a mortgage loan.
But, what if you’re living paycheck to paycheck on $18/hour?
Well, it might be time to make more money. Keep reading to learn a few smart ways you could increase your income.
5 ways to make more than $18/hour
If you’ve decided that $18 per hour is not enough to support the lifestyle you desire, then you should take the steps to make some extra money.
Making a higher hourly wage will help you get out of debt faster, put more money into savings for retirement, and help you achieve your money goals.
So, if you’re barely getting by on $18/hour, don’t settle! There are many ways to generate more income so you’re not living paycheck to paycheck.
Here are 5 different opportunities to make more than $18 per hour:
1. Ask for a raise
The easiest way to make more money is to increase your hourly wage where you’re at. If you’re a valued employee who goes above and beyond, let your boss know you’re worth more than your current wage.
To improve your chances, do a little research before asking for a raise. Find out the range of salaries for others in a similar position, and use this information to strengthen your case.
You might find out the extra income you want is as close as asking for it.
2. Apply for a promotion
If you feel you’ve hit the pay ceiling for your position, maybe it’s time to shoot for something higher.
Take some classes, get certified, or go through additional training. Start letting other departments know you’re interested in moving up the ladder.
When the right job opens up, you’ll be in a good spot to get the interview and possibly the promotion. Before you apply, just make sure the increased salary is worth the added responsibilities.
3. Find another job
Sometimes the only option to make more money is to move on to another company. Just because your current boss won’t pay you more, doesn’t mean someone else won’t.
Start putting the word out that you’re looking to make a job move. Tell friends, family, and neighbors to keep their ears open for possible opportunities. However, it’s best not to spread this around the office. You don’t want to leave your current employment under negative circumstances.
While you’re waiting for the right door to open up, start polishing up your resume. Make sure you’re presenting your experience and skills in the best light. You might even want to take a workshop that helps you strengthen your interviewing abilities.
4. Start a side hustle
Creating your own side hustle is a great way to make more than $18/hour. You’d be surprised how easy it is to charge $20 an hour or more for a variety of services.
Here are a few ideas to start a money-making side gig:
- Walk people’s dogs
- House sit
- Do yardwork or gardening
- Be a consultant
- Write resumes
- Be a virtual assistant
- Be a freelance writer
- Take pictures at birthday parties
- Bake cupcakes for business events
- Offer simple sewing services
- Clean houses
- Be a personal shopper
And, this is just the tip of the iceberg!
Whether it’s a hobby you’re skilled at, experience you’ve gained, or just a task you enjoy doing – you can charge money for it.
You could also look into opportunities to earn passive income, which is essentially making money while you sleep. Blog posts, YouTube videos, printables, and online courses are all money-making ideas that can keep generating income without added effort.
5. Sell stuff
Selling stuff around the house takes little effort and is a great way to bring in more money. But, eventually, you’ll run out of stuff in the closets.
This is when you scour garage sales and thrift shops to find those hidden treasures people are willing to pay more for. Used books, shoes, clothing, and housewares are just a few things that can be bought at a steep discount and sold for a higher price. When you post items for sale on the internet, your customer base becomes much larger.
You could also try retail arbitrage, which is buying new items that are discounted in one market, then selling them for more in a different market. A popular strategy is finding finding items in the discount section of a local store and then reselling them on Amazon.
Do a little research to see what’s in demand, so you’re not buying stuff that won’t sell. There are phone apps that will help, such as the Amazon Seller app. Simply scan a discounted item to see what it’s going for on Amazon. If you can resell it at a good profit, grab it! It’s an easy way to make some extra cash.
Final thoughts on $18 an hour
In summary, a full-time job making $18 an hour before taxes and paycheck deductions comes out to $37,440 a year. After you account for federal taxes, Medicare and Social Security deductions, you’ll have close to $31,843 in net income.
If you are single with no dependents, or you have a two-income household with very little debt, this hourly wage could be sufficient to cover your basic expenses. However, you may find it difficult to save extra money, give to charity, buy a house, or travel. Committing to a budget and a frugal lifestyle will help you achieve your financial goals, although you may be slower in achieving them.
The good news is that $18/hour jobs are more plentiful than ever before, and most require no formal training. And, just remember, if you get a job that pays $18/hour, it’s only the beginning. As you take advantage of opportunities to move up, your hourly wage will only increase.
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