How Much Do I Make Per Hour?

how much do I make per hour

When you get your paycheck and it says that your annual salary is $50,000, and it doesn’t feel that way. Do you ever ask yourself How much do I make per hour? Or if you’re already working a wage job and it says you’re making $20/hr. But somehow you’re just scraping by and can barely put food on the table. Everyone has a different rate depending on their living conditions. Additionally, taxes and debt eat up a huge chunk of that.

How Much Do I Make Per Hour?

Let’s take Bobby for example. His annual salary is $100,000 but how much is his real wage per hour:

Tax Dissection

First let’s take a look at how taxes affect his salary. The tax bracket for 2017 for a single filer is:

2017 Tax Brackets

Using this information, Bobby’s salary will be taxed accordingly:

His take home pay post-tax is effectively $78,963.93. This is without accounting for Social Security and Medicaid/Medicare or any other deductibles.

Time Calculation

There are 260 weekdays in 2017. If we follow the Federal Holiday Calendar, then there are 250 working days in 2017. Assuming a normal 8-hour work day, then this brings us to 2,000 work hours this year. However, if I’m trying to calculate how do much I make per hour, my payslip might tell me the real number of workdays I worked that year. Additionally, most companies have a company calendar that tells them specific holidays which they have off.

Base Hourly Wage

The base hourly wage for this year is then

  • $78,963.93 / 2,000 hours = $39,48 / hour

All our future calculations will be using the $39.48 / hour as the reference rate. In other words, how much is Bobby’s time worth? According to the calculations, his time is worth $38.48 per hour. Therefore, anything he does outside of working can be considered to have an opportunity cost of $39,48 / hour.

Lunch Deduction

First let’s account for Bobby’s 30-minute lunch break. Since this is required of most work places, Bobby is forced to stop working for 30 minutes to eat lunch, thus giving up $19.74 every day.

Since Bobby works 8 hours per day and eats a 30-minute lunch, his new hourly wage with lunch included is:

  • [($39.48 * 8) – $19.74] / 8 =  $38.01 / hour, a 6% reduction in hour earnings.
  • Over the course of a year, he’ll have waived ($19.74 per lunch x 250 days where he eats lunch) = $4,935

It’s crazy to think about how much we pay to eat lunch. Not just the monetary costs of purchasing the food items but also the time value cost that we’re foregoing. Of course one can argue that you can’t just not eat. It’s a necessity. But it does take into our workday. And companies are stingy. We work 9-10 hours per day because lunch is not included.

What if Bobby goes out to eat and spends $10 on lunch every day? His new hourly wage becomes:

  • [($39.48 * 8) – ($19.74 + $10.00)] / 8 =  $35.76 / hour, a 9% reduction in hour earnings.

This would “cost” Bobby a total of $7,435 per year. Of course the 30-minute time cost is fixed but the $2,500 is variable and up to Bobby’s personal choices.


What if he buys coffee every morning? Assuming he goes to the local cafeteria or coffee shop and spends $4 a workday on coffee, that amounts to

  • $4 x 250 workdays = $1,000 per year
  • New hourly wage = [($39.48 * 8) – ($19.74 + +$10.00 + $4.00)] = $35.26, a 10.7% reduction in Bobby’s hourly wage!
  • This sums up to $8,435 in the cost of lunches and coffee per year, with the variable costs being $3,500 of that.


Based on these calculations, we deduce many observations. The average pay increase in 2016 was 2.9%. If real inflation rises at an average 2% per year, the differential would be 0.9%. In order to counter the 10.0% reduction in wage resulting in the lunches and coffee, it would take over 10 years!

Other expenses to factor in:

  • Cost of commute (gas, public transportation, and their time cost)
  • Any costs associated with work requirements: dry cleaning, dress clothes, paid-time-off for medical purposes, kids

I try to fight the 30-minute lunch requirement every day. I believe employees should have the option to a 30-minute lunch break, not a requirement. Many people can multitask these days and it’s not difficult to read/type e-mails on a computer while munching down on a sandwich. Bobby takes a 10% hit every year, and the majority of it comes from the lunch requirement. I think corporate policies and laws should change that.

Accounting for Bobby’s figures above, what is your real wage?

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