# \$18 an Hour is How Much a Year: Is This Salary Enough?

When considering a new job opportunity, the difference between salaried pay and hourly wages can be a significant decision point. Say you’re offered a job paying \$18 an hour. Exactly how much is \$18 an hour per year? Keep reading to find out.

## \$18 an Hour Is How Much a Year?

If you’re working full time, \$18 an hour equals \$37,440 per year. Here’s a look at the math:

• 40 hours per week X 52 weeks in a year = 2,080 hours
• 2,080 total hours worked X \$18 = \$37,440

At a glance, \$18 might seem sufficient, particularly when compared to minimum wage rates. However, understanding the actual yearly take-home amount post-tax is vital to determine if this wage meets your financial requirements.

## What Does \$18 an Hour Look Like for Other Pay Periods?

Here’s what \$18 an hour equals for other pay periods:

### Annual Income After Taxes

The amount you pay in taxes depends on the state you work in. Some states do not charge income tax, while others do. Even if you do not have to pay income tax in your state, you will be charged federal taxes, Medicare and Social Security tax.

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The federal income tax for individuals has multiple brackets, depending on your filing status and income. The overall rates range from 10% to 37%. The federal tax system is based on a progressive tax code, meaning the higher your income, the greater the percentage of your income you pay in taxes.

## Is \$18 an Hour a Good Wage?

If you earn \$18 an hour, your annual income would be roughly \$37,000. But how does this wage compare to the average household income?

In 2022, the real median household income in the U.S. was \$74,580. To compare, in 2021, it was \$79,900.

Given this data, an income of \$37,000 from a single earner is notably below the national median for households. Yet, if a household has two earners each making this amount, their combined income approaches the national median. For individuals living frugally, especially without dependents, \$18 an hour might be adequate.

### Is \$18 an Hour Enough To Live On?

Here are some factors that determine if your current income is enough to sustain you:

• The number of dependents in your family
• The cost of living in your state
• Your lifestyle, such as where you shop, how often you eat out, etc.
• Transportation costs
• Savings
• Loan repayments

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Keeping all these factors in mind, \$18 an hour might be sufficient for some and meager for others. For instance, if you have to repay an installment on personal or student loans every month, that will eat up a chunk of your income, reducing the portion of your budget you can actually use at home.

Similarly, if you eat out frequently, you would have to keep a fraction of your money aside for dining out. More importantly, more dependents in the family mean higher bills, more groceries, more school supplies and a generally higher cost of living, especially for a family with only one working member.

If you have all these responsibilities, \$18 an hour might not be a livable wage for you. But if you live alone and have a modest lifestyle, you may be able to live fairly comfortably on \$18 an hour.

## How To Budget on \$37,440 a Year

These calculations are ideal for people who do not have any debt. If you are paying off any loans or mortgages, you need to designate a fraction of your income for that.

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Having said that, if you earn \$37,440 a year, you can budget it as such:

• 50% on basic expenses
• 20% savings
• 20% on fun, entertainment, subscriptions, eating out, shopping, etc.
• 10% on miscellaneous, e.g., repairs and maintenance around the house, insurance, etc.

This method is similar to the 50/30/20 method and may be challenging for some. If you have different needs, you may need to cut down spending in some areas and put it to use elsewhere.

If your basic expenses take up more than 50% of your income, for example, setting aside 20% for fun may not be realistic.

At the end of the day, the important thing is to make sure you allocate a certain percentage to each expenditure and avoid overspending. If you underspend a particular month, put that extra money into your piggy bank.

## Tips To Live on \$18 an Hour

Living on \$18 an hour might not be the easiest thing to pull off, depending on your individual circumstances. But if you take some careful steps or make changes to your lifestyle, you will not have to worry every time you check your bank balance.

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### 3 Things You Can Do Now:

• Stick to your budget. Many people make the mistake of deviating from their budget, which becomes a habit. Do not fall down this rabbit hole. If you saved 5% of your basic expenses a specific month, that does not mean you ought to eat out an extra night. Put that money into savings for a rainy day.
• Side hustles help. It is not always possible to start a side hustle if you are working a full-time job. However, you can always try to look for less time-consuming ways to earn passive income.
• Keep an eye out for discounts. Whether it is groceries, clothes or any other item, shop smart. Try to shop for new clothes on sale or consider thrifting. You might be surprised at what you can find at Dollar Tree or in the aisles of Walmart, to start. As for groceries, many stores offer coupons and discounts. You can also get cash-back rewards from grocery shopping on your credit cards. More importantly, opt for free grocery pickup, since that means you will not enter the store and risk making impulse purchases.

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## Final Take

If you live alone in a state with a low cost of living, \$18 an hour should be sufficient for you. However, if you have more dependents in the family or live in a high-cost state like California or New York, living on \$18 an hour would be tough.

Knowing how much money you’ll bring home in a year can help you make informed decisions about your employment opportunities and long-term budget.

### FAQ

Here are the answers to some of the most frequently asked questions about getting paid \$18 an hour.
• Is \$18 an hour a livable wage?
• This depends on various factors including the cost of living in the area, personal expenses and financial obligations. In some areas, \$18 an hour might be sufficient, especially for individuals living frugally or in areas with a lower cost of living. However, in cities or regions with a high cost of living, it might not go as far.
• How much is \$18 an hour for 40 hours a week?
• For a 40-hour work week, the weekly salary would be:
• \$18 X 40 = \$720
• How much would you earn biweekly at \$18 an hour for 40 hours a week?
• For a biweekly period, the salary would be:
• \$18 X 80 hours = \$1,440
• How much is \$18 an hour annually?
• Assuming a full-time job and 52 weeks a year, the annual salary would be:
• 40 hours per week X 52 weeks in a year = 2,080 hours
• 2,080 total hours worked X \$18 = \$37,440

Information is accurate as of Oct. 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.