Can You Survive On $20 An Hour In 2023? (And How Much Is It Annually?)

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In 2023, life may appear particularly depressing and challenging for many people due to the rising cost of living in many parts of the world.

Can You Survive On $20 An Hour In 2023? (And How Much Is It Annually?)

More people are finding themselves needing to cut back on their indulgences and tighten their budgets. Many people’s incomes don’t appear to be keeping up with the rise in inflation.

Countless people are being compelled to change careers or take on second jobs in order to survive.

Taking into account that the US minimum wage is $7.25 an hour, a $20 hourly income doesn’t seem like a bad deal. But in 2023, could someone get by on $20 per hour? How much is $20 an hour a year?

In this article, we will find out whether it is possible to live comfortably off of a wage of $20 per hour, and what $20 an hour is weekly, monthly, and annually.

So, let’s get started.

Table of Contents

How Much is $20 an Hour Per Day?

Before we get to the big money – how much $20 an hour equals per year – let’s start off smaller, working out how much it will cost you per day.

The first thing to take into account here is that your daily working hours will differ from job to job. You may work as little as 5 hours a day, or even up to 13.

The average amount of hours for a person to work per day, whether you’re working a full-time or part-time position, is 8 hours.

So, if we multiply 8 by 20, we get 160; therefore, a person earning $20 an hour would earn $160 a day if they were to work 8 hours before taxes.

A person who works a part-time job of only 5 hours a day would bring home $100 a day, while a person who works a 12-hour day would earn $240.

More reading: How to Save $5,000 in 6 Months

$20 an Hour is How Much Per Week?

Now that we know the basics, let’s take a look at how much you would be taking home each week. Since a working week typically consists of 5 days, we will work it out based on these hours.

Let’s say that you are working a full-time position of 5 days a week, for 8 hours per day. That’s 40 hours a week.

We would multiply the $160 that we worked out earlier by the number of days that you’d be working – which would be 5 – giving us the number 800.

Therefore, a person working 40 hours a week would bring home a weekly salary of around $800 (before taxes).

Additionally, this would mean that your bi-weekly salary at $20 an hour (80 hours) would be $1,600.

The legal requirement for part-time working hours is between 1–39 hours per week.

So, let’s say that you were working 5 days a week, but you only worked 5 hours per day. This would equal to $500 per week, and a $1,000 bi-weekly salary, before taxes.

More Reading: Try the 365 Day Nickel Challenge

How Much is $20 an Hour Bi-weekly?

$20 an hour pay is $1,600 every two weeks before taxes. That is if you are working 40 hours a week.

If you are just working part time, and only 20 hours per week, then you would make $800.

How Much is $20 an Hour Per Month?

This is where the math gets a little tricky. It can be difficult to work out exactly how much you would earn per month on a $20-per-hour salary, as each month has a different amount of days.

For example, January, March, May, July, August, October, and December have 31 days each. However, since the weekends fall on separate dates – and we’re assuming that you’re working 5 days a week – the working days in each month will slightly differ.

The best we can do is give you a rough estimate by picking out a random month, so let’s go with January. This month has 31 days, with 5 weekends in total. This means that there are, in total, 22 working days throughout the entire month.

If we were to take the $160 that you’d earn per 8-hour shift, and multiply it by the amount of days worked per month – 22 – we would end up with 3520. So, your monthly salary before taxes would be $3,520.

However, if we were to use the average amount of hours worked per week – which is 40 hours – and multiplied that number by the average amount of weeks in a month – which would be 4 weeks – you would take home $3,200.

All in all, this is a tricky one to work out accurately, as we are unsure how many hours you would work in a month. As an average, though, it would be somewhere between $3,200 and $3,700 if you worked a 40-hour week.

More reading: What is the 30/30/30/10 Budget Rule?

How Much is $20 an Hour Per Year?

Next, we’re going to answer the question that we have been talking about since the start of this article: how much is $20 an hour per year?

If this was your hourly rate, and you saved up every paycheck, how much money would you expect to have saved by the end of the year?

In order to do this, we would need to know the number of weeks in a year.

Approximately 52 weeks make up a Gregorian year, with a few days often carried over. Therefore, there will be 52 full weeks in each year.

With this information, we can calculate how much money you would make annually if you were paid $20 an hour.

One more thing to take into consideration, before we reveal the final number, is that some companies and professions offer paid holidays and sick days, while others do not. If you do not receive paid holidays/sick days, this number could potentially be a lot lower.

If you were to work 40 hours a week, for 52 weeks straight, you would earn $46,100 a year… at least, before taxes.

How Much is $20 an Hour Per Year After Taxes?

We haven’t actually discussed taxes that much up to this point. Unfortunately, the amount that taxes will deduct from your pay will increase as your salary rises.

In an ideal world, you would receive a $46,100 yearly salary split into 12 parts, but this won’t actually happen. Sections of your wages will be taken away in significant amounts, and you won’t be able to use it.

So, how much is $20 an hour per year after taxes?

There are plenty of websites that you can find online that will help you work out your overall tax income for free, such as the US Income Tax Calculator. The amount of tax you pay will be specific to you and your current circumstances, so keep that in mind.

The sum will include payments for Social Security, Medicare, and Federal income taxes.

If you reside in a state that levies an additional income tax, you will also be required to pay 3.2% in state taxes. 41 out of the 50 states are required to pay this.

So, as a rough estimate, you would be looking at paying around $6,500 annually through taxes, which is just over 15% of your wage. This figure may be less or more, depending on your own personal circumstances.

Therefore, after taxes, a person earning $20 per hour could expect to receive around $35,000 a year overall. Again, it is difficult to provide you with an exact estimate, so this number could be larger or lower.

The Number of Working Days in 2023

The year 2023 has 365 total days, making it a typical year. Next year will actually be an atypical year, with 366 days, due to February having an additional day (29 days instead of 28). This is known as a leap year, and it occurs every four years.

Out of the 365 days that make up 2023, there will be 249 working days, 105 weekends, and 11 federal holidays in the United States.

In comparison, there were 250 working days, 105 weekends, and 11 federal holidays in 2022.

More reading: How Much is $30 an Hour a Year?

Can You Live Off $20 an Hour?

To summarize what we have learned so far, an individual who earns $20 per hour, working a typical 40-hour working week, would earn:

An estimated daily salary of $160.
A weekly salary of $800.
An estimated bi-weekly salary of $1,600.
An estimated monthly salary of $3,200.
An estimated annual salary of $46,100.

The taxes that would be withheld from each of these estimations were not taken into account, but generally, these are the figures you would anticipate to see on your payslip if you were making $20 per hour.

These projections also assume that the person in question is entitled to paid vacation time and sick days. If they are that means they get compensation for every single working day, whether or not they actually physically worked them.

Now, let’s delve into the main question of discussion in this article: would it be possible for a person to survive on $20 an hour? Or, at least, could they live a comfortable life while living off these wages?

The answer, put simply, is ‘maybe’. How well a paycheck of $20 an hour can meet your expenses ultimately depends on your particular living situation.

Depending on what stage of life you are currently at, a wage of $20 an hour may be harder to live off as an older person than, say, a teenager working their first job.

And, you may find saving money on this tight budget impossible.

More reading: The 50/30/20 Budget Rule

Let’s examine the factors that will influence your income, and what you will need to pay for with it.

Earning $20 an Hour as a Teenager

Let’s assume that the average 16 to 18-year-old is still living at home with their parents. This isn’t always the case, but we will assume that they are for this particular example.

It would be reasonable to assume that if the young adult is still residing at home, they would not be responsible for as many living expenses as they would if they were living independently.

Even if they are expected to pay rent, total expenses will be far lower than if they were living alone.

Therefore, for a teenager living at home, $800 could seem like a huge amount of money to take home each week. They could use it to save up for future plans, or they could use it to buy a car, or hang out with friends.

Minimum wage in the US is, currently, $7.25 an hour. Many teenagers will only earn around $58 as a daily salary, which, in comparison to $160, isn’t much at all.

This is why $20 is a fantastic hourly salary for a teenager, especially if they are still living with their parents. This is something that they should take advantage of, and use to save up money for their future, e.g., college.

Surviving as an Adult, Earning $20 an Hour

While $20 an hour may be more than suitable for a teenager, it would be a little more difficult for an adult to live comfortably on this kind of wage. Especially if you have a family to support.

You will need to consider whether you’d be able to afford a house, bills, maintenance, groceries, and many other things. Rent in big cities would make living on this nearly impossible.

If you drive, you’d have to pay for your vehicle. On top of that, your overall living costs will increase greatly if you have your own family to provide for.

Thus, an adult living alone or with a family may not find it ideal to earn $20 per hour.

However, it wouldn’t be impossible if you carefully planned your spending and adhered to a set monthly budget.

Can I buy a House on $20 an Hour?

Depending on where you live, it is possible to buy a house on $20 an hour. But, this would only be sufficient to cover a mortgage on a property that cost less than $200,000. And, not if you had a ton of other debt to pay.

If you live in a smaller town, and don’t have any current debts, buying a house may be possible.

However, a house of this cost will probably require some updates and maintenance. The typical cost of a home in the US, in 2021, was $374,900.

This implies that in order to make the house perfect, you would need to invest significantly more money. And, in most cases it will be challenging to find a house that low in cost.

Additionally, you would need to stick to a very strict budget in order to cover other expenses like bills and groceries. Thrifty living tips like these would be much-needed.

If you are trying to save money for a house, try these tips.

More reading: Learn the Steps to Buying a House

What Jobs Pay $20 an Hour?

You might be wondering which jobs actually pay 20 dollars an hour. Here are some jobs that pay at least that much:

Lyft or Uber driver
Virtual assistant
Social media manager
Massage therapist
Proofreader
Handyman (in Nashville they make as much as $50 an hour!)
Bookkeeper
Freelance writer
Online tutor

Ways to make more money if 20 Dollars an Hour is Not Enough

You many find that you aren’t making it on just $20 an hour of pay. If so, you can supplement your income with some side hustles like these:

Real estate side hustles
Lyft/Uber driving
Driving for DoorDash
Renting out a room in your house
Using AirBnb to rent part of your house
Selling crafts
Teaching online
Selling a service like photography or graphic design

Final Thoughts

For a teenager or young adult who doesn’t have many living expenses and can concentrate only on saving for the future, $20 an hour may be a wonderful pay rate.

The same cannot be true, however, for an adult who supports their family. $3,200 might not be sufficient to pay for all necessary expenses for the month.

That being said, it would not be impossible to survive off of $20 an hour. Providing that you know how to budget your money, and you’re not living a particularly lavish lifestyle, e.g., living in a large penthouse in the middle of the city, you may be able to make it work.

These kinds of circumstances are always unique to each person. It would be up to you to decide if you could make it on $800 a week, $3,200 per month, and $46,100 per year.

We hope you found this article informative and helpful.