How Much Does a $25/Hour Worker Really Earn In a Year? (2024)

Knowing how much you may make in a year is essential when considering a job offer. For those earning $25 an hour, it’s necessary to understand how much a year of work at that rate of pay will bring in.

If you were to earn $25 an hour, what would your annual salary be? Most hourly wage earners don’t know how much they make each year.

Let’s talk about the annual salary of $25 an hour and whether it’s enough to live on.

How Much Is $25 an Hour in a Year’s Salary?

To convert an hourly rate to a yearly salary, you need to know the number of hours you work each week. The year has 52 weeks. Here’s an example of calculating a salary using a 40-hour work week.

Let’s Begin to Calculate:

If an employee works 40 hours a week, multiply 40 by 52 weeks to get the number of hours worked per year:

40 x 52 = 2,080 hours

Now, multiply your hourly rate of $25 by 2,080 hours, and we’ll get the gross annual salary:

$25 x 2,080 hours = $52,000/year.

How Much Is $25 an Hour If I’m a Part-Time Employee?

You need to adjust the weekly hours if you make $25 per hour working part-time. An example would look like the following:

For employees working part-time, there are 1,040 working hours in one year (i.e., 20 hours per 52 weeks). If you get paid $25 per hour, you will earn $26,000 per year.

How Much Is $25 an Hour After Taxes?

It’s important to remember that your hourly wage is affected by income taxes. Obviously, every situation is different, and you should do some research on what you may owe or be exempt from. But for the sake of demonstration, let’s assume you have to pay the standard income tax on your gross pay that most others do.

What Does the Average US Worker Earn per Hour?

According to the recently released Usual Weekly Earnings of Wage and Salary Workers from the US Bureau of Labor Statistics, the average paycheck has gotten a bit plumper. Workers are taking home a median earning of $1,118 per week, which is $58,136 annually.

That’s a 4.5% jump from the previous year, outpacing the 3.5% rise in the Consumer Price Index for All Urban Consumers. In simpler terms, wages are climbing faster than the cost of living.

Can You Live on $25 an Hour?

We need to consider several factors before answering this question, including the cost of living in your area and the lifestyle you desire. We can, however, compare this hourly rate to the national poverty level.

As of 2023, a single-person household’s federal poverty level is $14,580 per year. This figure is adjusted for inflation each year. Every additional person in the household adds $5,140 to the total. For example, the poverty guideline is $30,000 annually for a family of four.

Earning $25 per hour puts you well above the poverty line, especially if you’re single.

With careful budgeting and financial planning, $25 is still a viable hourly wage. Even though it’s not a particularly high hourly rate, it’s still well above the minimum wage rate in most areas. Keep in mind that your take-home pay will also be affected by things like benefits, overtime pay, and possible bonuses.

Compared to Others, How Much Do You Earn Each Year?

A full-time employee earning $25 an hour makes around $52,000 annually. But how does this compare to the average US income?

It’s a little lower than the national average income per worker of $53,490 (in 2023) and much lower than the median income of $74,738.

Paid Time Off for Hourly Employees Who Earn $25 per Hour

Whether your employer offers paid time off (PTO) can significantly affect your income, and it’s considered different from any sick leave you might accrue. Using a 40-hour work week as an example, let’s look at two scenarios: one with PTO and one with no PTO.

With PTO: As in the above example, your annual income would remain steady at $52,000. All employees often automatically receive two weeks of paid vacation whenever they start a new job.

Without PTO: If we follow the example above, taking two weeks off without pay will result in you working only 50 weeks of the year instead of 52. This translates to 2,000 working hours (i.e., 40 hours x 50 weeks). 2,000 hours x $25 per hour would reduce your income to $50,000. This is more typical for part-time work, as only a few employers offer PTO for non-salaried employees.

Three Tips for Budgeting on a $25 per Hour Wage

Check on Your Budget Regularly

Budgets should be reviewed regularly because most people’s expenses and income change over time. Maintain your budget according to your current financial situation and make changes as necessary.

Stay on Top of Your Expenses

Check your bank statement to see how and where you spend your money each month. Double-check your fixed expenses, including rent or mortgage, and track your variable costs, like groceries and gas, which can vary from month to month.

Reduce Your Debt

Paying off any outstanding debt should always be a part of your budget. Paying off high-interest debts (e.g., credit card balances) is usually recommended as the best place to start. In addition to that, consider negotiating a lower interest rate with your lender.

Steering Toward Stability

Navigating the financial seas with $52,000 a year, or $25 an hour, can mean smooth sailing, provided we’re equipped with the compass of smart budgeting and prudent financial planning. While this income holds the potential for a comfortable journey above the poverty line, the key lies in how we manage it.

By aligning our spending, saving, and lifestyle habits with our budget, we can turn this income into an effective tool for navigating our current economic landscape. In the end, it’s about steering wisely—not just earning.

This article was originally produced and syndicated by Financially Well Off.