Federal and state politicians regularly talk about raising the federal minimum wage to $15 per hour. But how much is $15 per hour in a year?
More importantly, is it a livable wage? Can small businesses afford to pay employees that much?
While the answers to those questions are up for debate, we can tell you how much $15 per hour is in a year. Plus, we can give you tips on how to survive and thrive on $15 per hour.
In This Article
How Much Does $15 per Hour Equate to Each Year?
If you work 40 hours per week every week, you would work 2080 hours in one year. If you make $15 per hour, you will earn $31,200 annually.
However, if you only work 20 hours per week for 52 weeks out of the year, you’ll earn $15,600.
You can get a more precise estimate of your pre-tax earnings using this formula:
$15 per hour x hours worked per week x weeks worked per year = annual earnings
For example, if you work 30 hours per week for 50 weeks out of the year, your calculation will look like this:
$15 per hour x 30 hours per week x 50 weeks per year = $22,500
Keep in mind that this calculation doesn’t include the value of any benefits you receive from your employer.
How Much is $15 per Hour After Taxes?
You might be wondering how much $15 per hour is after taxes. The answer to that question varies based on the state you live in. This is because each state has different tax rates.
For instance, California has a state income tax rate of 12.3% (13.3% if you earn over $1 million per year).
However, nine U.S. states have no income tax at all:
- Alaska
- Florida
- Nevada
- New Hampshire
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
Every other state falls somewhere in between. North Carolina’s rate is 5.25%, while Minnesota’s can go up to 9.85% depending on your income.
For the purposes of this article, we’ll estimate federal, FICA and state tax withholding at an average of 19%.
This means that your $15 per hour wage comes out to $12.15 per hour after taxes. Annually, if you work 40 hours per week, this comes out to $25,272.
This amount could be higher or lower based on your state’s tax rate.
Other $15 per Hour Calculations
Let’s break down what $15 per hour adds up to daily, weekly, bi-weekly, bi-monthly and monthly if you’re working a full-time, 40-hour per week job.
Here are the pre-tax and post-tax potential earnings for different time periods:
| Wage and time period | Pre-tax earnings | Post-tax earnings (estimated) |
| $15/hr. per day | $120 | $97.20 |
| $15/hr. per week | $600 | $486 |
| $15/hr. every two weeks | $1,200 | $972 |
| $15/hr. bi-monthy | $1,300 | $1,053 |
| $15/hr. monthly | $2,600 | $2,106 |
Note that these numbers will be even lower if you’re having other expenses deducted from your paycheck, such as 401k contributions, health insurance, etc.
Can You Live Off of $15 per Hour?
The numerical information listed here begs the question: Can you live off of $15 per hour?
It depends on several factors. For instance, where you live is an important consideration.
If you live in a state or city where expenses are high, such as California, living off of $15 per hour could be extremely difficult.
However, living in a lower-cost state such as Mississippi could be much more manageable on $15 per hour.
No matter where you live, it’s safe to say that living on $15 per hour will take some diligent money management tactics.
How to Live Off of $15 per Hour
It is possible to stretch your earnings further and make it more feasible to live off of $15 per hour. Here are some ideas to help make ends meet on this wage.
Make a Budget
Making a monthly budget is important no matter how much you earn. However, it’s even more critical if you’re earning a lower salary.
This sample budget can help you create your own budget for living off of $15 per hour:
| Expense Category | Monthly Budget Amount |
| Rent | $900 |
| Utilities | $100 |
| Groceries | $200 |
| Transportation | $175 |
| Charitable Contributions | $100 |
| Savings/Retirement | $200 |
| Clothing | $75 |
| Personal Care | $50 |
| Entertainment | $75 |
| Health Care/Medical | $200 |
| Miscellaneous | $31 |
| TOTAL | $2,106 |
Of course, these numbers might be different for you depending on where you live and other factors. This is just an example you can use to help determine your own personal budget.
Pay Off Debt
Living on a $15 per hour budget will be easier if you don’t have debt payments.
If you do have debt that you need to eliminate, take some money out of your savings category and put it toward paying off debt.
Additionally, if you need to, get a good side hustle to help you bring in extra income in order to pay your debts down faster.
Live Within Your Means
Living within your means is extremely important if you earn a lower wage. This means that you may have to do life differently than some of your higher-earning friends and family members.
Here are some ideas for living life well while living within your means:
- Make your favorite restaurant knock-off meals at home instead of dining out
- Use popular money-saving tips wherever you can
- Have friends over for a game night or movie night instead of going out
- Work out at home instead of paying for a gym membership
- Get cheap clothes online when you need to add to your wardrobe
- Use strategies to save money on groceries
- Shop around to save money on auto insurance
- Find fun things to do for free at night
It takes some work, but you can live within your means and still have fun in the process.
Save Windfalls
Another tip for surviving on a lower wage is to save financial windfalls that come your way.
Some examples of windfalls could include:
- A raise or a bonus at work
- Tax refunds
- Financial gifts you receive
- Money you earn from selling stuff online
- Income you get from working a side hustle
Saving these unexpected cash windfalls can help you beef up your emergency fund so that money isn’t quite so tight.
Jobs That Earn $15 per Hour
Independent of the potential changes to the federal minimum wage, there are currently job opportunities that pay $15 per hour. The Bureau of Labor and Statistics lists many jobs near you with current pay rates.
Here are some of the most popular options:
| Job Title | Avg. hourly wage | Job Description |
| Retail cashier | $15.00 | Customer checkout |
| Front desk clerk | $15.13 | Assist customers |
| Mail handler | $15.30 | Sort and distribute mail |
| Cleaning staff | $15.46 | Clean offices and homes |
| Medical transcriber | $15.50 | Transcribe medical records |
| Medical assistant | $15.59 | Assist in patient exam/treatment |
| Administrative assistant | $15.69 | Office support for businesses |
| Grill cook | $15.75 | Cook for restaurants |
| Server (including tips) | $15.80 | Serve food to patrons |
| Home Health Aide | $15.96 | Caregiver to home residents |
These are nationwide average wages for the job titles listed. They were pulled from the popular job search site Indeed. Your actual pay may vary based on the company you work for, where you live and other factors.
Summary
$15 per hour sounds like a great wage to some people. To others, it could seem barely livable.
If you reside in a low-cost state, $15 per hour could be an acceptable living wage. However, if you’re living in a high-cost state, $15 per hour might not cut it.
No matter what your hourly wage is, living below your means and managing your money well can help you become more financially stable.
