Your hourly rate depends on your skill set. If you have little to no work experience, most companies will likely offer entry-level jobs paying around $15 per hour.
We understand how nerve-racking job hunting can get. However, if you want to maximize your earnings and achieve financial freedom, you must start your career with a decent living wage.
If you don’t know salary negotiation yet, don’t worry. We consulted financial experts and read official government resources discussing entry-level jobs that only pay around $15 per hour.
By the end of this piece, you’ll know how much $15 adds up to a year, plus if it covers your living expenses.
Please read without skipping. We’ll explain a common yet dangerous misconception about job security, which often hampers employees from reaching their full potential. Otherwise, you might get stuck with the same low-paying job for years.
So, $15 an hour is how much a year? Let’s find out!
$15 An Hour Is How Much A Year?
At a glance, $15 hourly rates might seem fair. If you’re still studying or just want extra cash, you’ll even earn more than your peers.
“Good” wages are subjective. To reach an objective decision on accepting jobs paying $15 per hour, calculate the taxes, compute your annual compensation, and assess whether the numbers justify your duties.
Here’s a calculator you can use.
What $15 an hour looks like
Before moving forward, let’s assess what your hourly rate adds up to every pay cycle. We’ll set fixed values for variables like your daily hours and bonuses, plus we’ll assume that you’re not working overtime or earning commissions.
How much is $15 an hour per day?
On average, U.S. employees work 40 hours a week. If you make exactly $15 an hour, you’ll accumulate $120 every day.
$70.19 of your daily income would be taxable, so expect a $7.63 deduction. Also, Social Security costs $5.25.
After taxes and deductions, you’ll take home $107.12.
Note: The Department of Labor (DOL) states that overtime pay should equal 150% of your basic pay rate. As such, your $15 hourly rate should spike to $22.50.
How much is $15 an hour for 40 hours a week?
Your gross income adds up to $600, but $350.96 of which is taxable. Expect a $38.16 and $26.23 deduction for federal income taxes and Social Security taxes, respectively.
Assuming you work 40 hours a week, you’ll take home $ 535.61.
How much is $15 an hour per month?
Your gross monthly income would add up to $2,600, and $1,520.83 would be subject to tax deductions. Expect to pay $165.38 in federal income taxes and $113.65 in Social Security dues.
After all the monthly deductions, you should get around $2,320.98. If your rent exceeds 50% of this amount, reconsider your job options—or move to a much cheaper place.
How much is $15 an hour per year?
Per annum, you’ll have a gross income of $31,200. $18,250 would be subject to tax, plus you would pay $1,984.50 and $1,363.80 in federal income taxes and Social Security fees, respectively, over the year.
Average hourly rate of a U.S. worker
Statistics show that the average U.S. employee makes $10.94 an hour. However, we want to emphasize that this data doesn’t justify jobs paying $15 an hour.
Several factors affect surveys computing average hourly wages.
For instance, most middle-class families comprise two parents working full-time jobs. The average U.S. worker cannot build and support a family on a single income source.
Similarly, over 11% of U.S. households fall within the poverty threshold. Unemployment rates and unjust wages significantly drag down the average statistics nationwide—especially since upper-middle-class and wealthy families run businesses.
Good monthly salary in the U.S.
We don’t think you can still call the federal minimum wage fair. The government hasn’t changed its $7.25 minimum hourly wage since 2009, while inflation rates have spiked from 3.27% to 8.20% in the same time frame.
You’d do well to reference the U.S. poverty thresholds instead.
For instance, middle-class families often earn 200% to 400% of the poverty threshold. So, if you have a partner and two kinds, your combined household income should be somewhere between $53,000 to $106,000.
Is $15 an Hour a Good Wage?
Now that you know how much $15 hourly rates translate to per year, let’s answer whether or not it’s a fair rate.
As you might already know, a “good” wage is subjective. The money you need to live a comfortable life depends on several factors, including your family’s social class, current lifestyle, and future financial goals.
We’ll talk about living off $15 per hour later. For now, we want to help you assess whether you should accept jobs that only pay that much.
Generally, only entry-level jobs pay $15. If you have no work experience or college degree, plus you’re applying for a low-skilled labor job, then $15 an hour might sound fair.
Otherwise, look into other options. Statistics show that graduates typically make $55,000+ during their first year out of college; you can use these figures as your benchmark.
What jobs pay $15 an hour?
Some entry-level jobs that pay around $15 an hour include the following:
- After-school tutor
- Babysitter or nanny
- Billing specialist
- Bookkeeper
- Construction worker
- Delivery driver
As a general rule, any low-skilled job that requires no college degree or previous work experience will likely pay $15 an hour or less.
How can you live off of $15 an hour?
Whether or not you can live off $15 an hour depends on your lifestyle, needs, and financial situation. There’s no universal budgeting plan.
For instance, let’s say you still live with your parents, reside in a state with cheap rent (under $1,000), and have no dependents. In this case, you can probably do just fine with a $15 hourly rate.
However, let’s say you’re the breadwinner of a family of four. Considering the average cost to buy/rent a three-bedroom home, tuition fees, plus inflation rates on basic necessities, $15 an hour isn’t nearly enough for daily expenses.
You’ll even fall under the poverty threshold if your family of four has a combined household income of $28,000 or less.
How do you increase your hourly rate?
There’s no universal solution to getting a salary increase. The best approach is to better yourself and jumpstart your career path by learning new skills and investing in relevant technologies.
For instance, let’s say you’re a copywriter. You can sign up for writing classes, brush up on the basic grammar rules, and consider subscribing to Grammarly premium.
They’ll cost a few bucks. However, once you level up your writing skills, you can proudly justify higher rates per word or hour.
Warning: Most employees see resignation as a gamble. Although job hopping and transitioning to self-employment come with several risks, we can’t say they’re less secure than employment altogether.
If there’s anything the pandemic showed, it’s that job security is a myth. In 2020, more than 9.6 million U.S. employees lost their jobs, proving that employers will lay off even the most tenure workers if push comes to shove.
Don’t get us wrong—we have nothing against employment. We just want you to understand that the idea of employment stability shouldn’t stop you from switching careers or companies.
Also, job hopping gives you opportunities to ask for better pay. A 2021 longitudinal study on 18 million workers shows that job switchers spiked their salaries by 5.8%, while job holders only got a 3.1% increase.
Budgeting your annual salary
Proper budgeting could definitely improve your financial situation. Who knows? You might be overspending on frivolous items that you can easily cut out of your daily budget.
Just note that financial planning only helps you to an extent.
Again, your salary heavily impacts your budget. Tweaking your meals, hobbies, career plans, or even overall lifestyle won’t make much difference if you don’t make a living wage.
A $15 hourly rate puts you way above the poverty line. However, considering the current political and economic climate, it might not cover all your daily expenses—especially if you have kids.
If you make $15 an hour, ask for a raise or get a new job. Otherwise, do some part-time gigs and odd jobs to ensure that you and your loved ones live comfortably.
Aidan has been writing about personal finance for over 6 years. Prior to this, he worked as a Corporate Finance Analyst where he specialized in Due Diligence, Company Valuations and more. He is a CFA charterholder.
