$25 an hour may seem like a lot if you have just received a promotion. Alternatively, it may appear insufficient if you have previously earned more.
Well, in this blog post, I will show you the calculations for all salary options for different time frames. How much you will earn per day, week, year, before and after taxes and also how to budget, supplemented by the best tips for living on this salary.
In general, if you earn $25 an hour and work in a full time position and average 40 hours per week, you will earn up to 52,000 dollars per year. This calculation includes all your vacation and holidays are paid. As always, your effective salary is determined by taxes in your location.
Let’s dive in the calculation to see how much you earn per different time periods.
$25 an Hour is How Much a Year?
Generally, $25 an hour while working 40 hours a week will earn you $1000 per week, minus taxes. There are 52 weeks a year, and some work all of them. If you fall in that category, you will make an average of $52,000 annually, with other deductibles still inclusive.
Some of the other things that dictate your net pay, which is the amount you are truly earning for that month or year, include:
- Federal Taxes or the Federal Tax Rate
- State Taxes
- Social Security
- Payroll Taxes
- 401 (k)
- Union Dues
- Insurance or Health Plans
- Medicare
You will often find these deductibles at the back of your paycheck. However, you are not obligated to consent to all these deductions.
For this reason, you may have less than $52,000 to spend annually if you make 25 dollars an hour. Taxes typically take up to one-third or one-fourth of your aggregate earnings, and you may have other mandatory financial obligations that are non-personal.
Your gross income, however, will be $52,000. And your net pay, which is the money you will have in hand, will be determined by subtracting all your obligatory expenses from $52,000.
Annual Breakdown of $25 per Hour for Y2022
So you know that you should make a ballpark of $52,000 annually. Now, let me break it down so that you know how much you make daily, weekly, and monthly:
How Much is $25/h Per Day?
Peradventure, you have to go to work five days a week, working eight hours a day. To calculate the amount you make daily, you could divide your gross income, $52,000, by the number of days you work, which is 260 days.
The easy way out would be to multiply the number of hours you work daily by $25: 8 hours x 25 = $200.
You’d make $200 a day if you work eight hours, which is pretty decent. Let’s move on to the amount you will make weekly.
How Much is $25/h Per Week?
Unless you are a part-time worker, you will work an average of forty hours a week for five out of seven days. To determine how much $25/h is every week, multiply the number of hours, which is forty, by $25.
That gives you $1000 every week.
How Much is $25/h per Month?
How many hours do you work in a month? Given that the number of days varies, it can be between 160 hours, if you work 8 hours per day in a month with 28 days. A month like January with 31 days would result in 184 hours.
Therefore, I will calculate the amount you make monthly by dividing the gross pay, which is $52,000, by twelve, which is the number of months in a year. That estimates $4,333, but those months with extra days will come with heftier paychecks.
To be exact, a month like January could result in a $4,600 salary and February with 28 days would bring you 4,000 dollars.
All of these estimates are before taxes. And they certainly do not include the amount that may not be included when you take a sick day off or family leave.
In the same vein, if you work extra hard and take extra shifts, your gross income will be higher than $52,000.
What is $25 an Hour Annually After Taxes?
I will reveal the annual gross income of someone who earns $25 an hour annually after taxes shortly:
| States | Federal Income Tax | State Income Tax | FICA | Total Income Taxes | Take-Home Pay |
| Alabama | 7.90% ($3,287) | 4.09% ($1,701) | 7.65% ($3,182) | 19.64% ($8,170) | $33,430 |
| Alaska | 7.90% ($3,287) | 0.00%($0) | 7.65% ($3,182) | 15.55% ($6,469) | $35,131 |
| California | 7.90% ($3,287) | 2.32% ($967) | 7.65% ($3,182) | 17.88% ($7,436) | $34,164 |
| Florida | 7.90% ($3,287) | 0.00%($0) | 7.65% ($3,182) | 15.55% ($6,469) | $35,131 |
| Iowa | 7.90% ($3,287) | 3.72% ($1,546) | 7.65% ($3,182) | 19.44% ($8,087) | $33,513 |
| Massachusetts | 7.90% ($3,287) | 4.47% ($1,860) | 7.65% ($3,182) | 20.02% ($8,329) | $33,271 |
| Missouri | 7.90% ($3,287) | 2.89% ($1,202) | 7.65% ($3,182) | 18.44% ($7,672) | $33,706 |
| Nevada | 7.90% ($3,287) | 0.00%($0) | 7.65% ($3,182) | 15.55% ($6,469) | $35,131 |
| New Jersey | 7.90% ($3,287) | 1.80%($751) | 7.65% ($3,182) | 17.36% ($7,220) | $34,380 |
| New York | 7.90% ($3,287) | 4.26% ($1,770) | 7.65% ($3,182) | 19.81% ($8,240) | $33,360 |
$25 per Hour Part Time Salary
Working at a part-time job is blissful if you have other things to focus on. Or, it may just be an additional source of income while working elsewhere or schooling.
A part-time worker in the United States works for five to thirty-five hours weekly. If you make $25 an hour, working five hours a week will earn you $125 weekly, while the maximum duration, which is 35 hours, will earn you $875.
In a month, we will follow the same calculations. Let’s assume the average month has four weeks – multiply $125 or $875 per week, and you will arrive at $500 and $3,500, respectively.
Alternatively, we can multiply the amount you earn every week by 52 weeks, assuming you don’t take any sick days off.
Working five hours a week, you will earn $6,500 a year. Meanwhile, if you work up to thirty-five hours, you can earn $45,500 annually.
Note that these calculations are your pre-tax gross income. When you have been taxed an average of 22.6 percent, you will be left with $5,031 annually.
On the other hand, your employer will subtract $10,283 from your salary if you work thirty-five hours weekly, leaving you with $35,217.
Is 25 Dollars an Hour Good?
This is not a yes or no question, but I will answer it sufficiently.
Mostly, it depends on what you do with money—your values, priorities, lifestyle, goals, and most importantly, how you can discipline yourself.
According to the U.S. Bureau of Labor Statistics, the median salary in the U.S. during the second quarter of 2022 was $1,041 / week for full-time salary workers (before taxes). So the median yearly salary will be around $54,132 per year.
So if we consider a $52,000 annual salary you can earn with $25/hour rate, you can still live a comfortable life.
I am not saying it is easy because it isn’t. But you will have to close your eyes to distractions or keep your eyes planted firmly on your financial goals.
You will also need to cut out unnecessary spending, such as delegating house chores like mowing the lawn or doing your laundry. I will provide more tips later in this article.
However, you may be unable to live on a 25-dollar-an-hour annual salary if you have a large household of about four to five people.
Yearly, it costs $14,800 to raise a child. After taxes and other expenditures, you will be left with a little close to or above $40,000 annually. Again, this may be enough for comfort and survival, but it mostly depends on your spending habits, wants, and needs.
Of course, the size of your household also matters. It is doable, but running a family on a net pay of $40,000 annually may be tricky.
Statistics show that managing a household of four costs an average of $85,139. So, if it is just you and your spouse or child or sibling, you may be able to manage on a salary of 25 dollars an hour.
How to Budget with $25/hour Yearly Salary?
The average tax rate in the United States is 22.6 percent, so we will work with that. 22.6 percent of $52,000 is $11,752. That means your employer will subtract an average of $11,752 from your annual income.
Therefore, you will be left with $40,248.
| Living Expenses | Budget Allocation | Percentage of Total Salary |
| Housing Expenses | $14,086 | 35 percent |
| Food and Groceries | $3,260 | 8.1 percent |
| Transportation | $6,439 | 16 percent |
| Healthcare Cost | $3,380 | 8.4 percent |
| Clothing | $1920 | 4.7 percent |
A solid twenty percent should always be reserved for your future needs., i.e., savings.
To budget with a $25/hour yearly salary, let us explore these areas which are common sources of expenditure among households of single and married people:
Housing Expenses
According to the BLS research In the United States, an average of 35 percent of income goes to housing – rent, mortgage, and other expenditures that are housing related.
Thirty-five percent will go to housing. 35% of $40,248 = $14,086. If you remove that amount from your salary, you will have $26,162 for other expenses. And remember, your needs should take up 50 percent of your income to follow the 50-30-20 rule (I’ll talk about this later too).
As such, you will have about fifteen percent left from this aspect, and you will spend it on the next few points I’ll explore.
But before then, I believe you can reduce your housing expenditure because every dollar counts when living on a 25-dollar-an-hour salary. This is even more important if you have people depending on you. Cut unnecessary costs and utilities if needed.
Food and Groceries
With 8.1 percent is Groceries, the next item on the list of basic needs.
After we reduce our salary by the average amount spend on Groceries in US, we will be at $22’902.
You can reduce your food bills by cooking at home instead of eating out. Meal prepping and shopping in bulk can also help save money.
Transportation
If you don’t live near your workplace, you may spend up to 17 percent of your income on transportation, according to the Bureau of Economic Analysis.
In our budget table, I have used the average 16 percent people spend on transportation, so we’ll come to the $16,463 left in our account.
Transportation may vary extremely. The distance, your car and other factors are impacting the cost of transportation.
There are many alternatives nowadays how to avoid high transportation coast. All the cities around the world start to be bike and roller “friendly”, which can help you save a lot if you live outside the city.
Another fact is the pandemic effect, which caused that lot of companies are considering switching to the home office model.
If you are one of those (or can become one) lucky folks, you can save not only your transportation costs, but also the most valuable commodity we all have – time.
Healthcare Cost
Health insurance, drugs, and other medical services are taking on average 8.4 percent per year from our port monies.
This would be 13,083 dollars after we reduce $16,463 by $3380.
I personally don’t try to save on this item, as I believe that this is one of the most valuable long term investment you can make.
Sure, you can research and find ways to save here some dollars on insurance.
Clothing
The average person in the US spends around 161 dollars per month on clothes. According to the statistics, women spend much more on clothes than men.
Clothes are nice, but this is the item with the highest saving potential on this list.
So, after we have subtracted all the costs of basic needs, you’ll come up with $11,163.
Of course, there are other costs you need to consider while planing your budget for the whole year, like entertainment or educations. But these can vary more than the basic needs.
Not everyone needs to visit the cinema once a week. In this calculation, I’ve tried to consider only those most basic needs we all have.
Tips for living on a $25/hr Yearly Salary
Living on $25 an hour a year can be achieved, and you will have some savings. You can do it with a little bit of discipline, a minimalist lifestyle, and the hacks I will show you:
1. Budget Planning
One of the open secrets about money is that you must tell it where to go, or you will discover it is not enough. By adopting a feasible budget, you can cut out unnecessary expenses and save your excesses.
In 2019, 59 percent of residents in the United States admitted to living from paycheck to paycheck. This survival technique can only work for so long; how do you deal with an emergency? What if you get put out of work?
Living on a $25 an hour salary may not have you flying first class to the Bahamas when you retire, but it will buy you reasonable comfort. And if you have invested in 401(K), retirement will be much more palatable.
However, you need to control your money, or it will flip the script and control you. Create a budget plan that appeals to and works for you.
Despite what many believe, a budget plan that works for them may not be feasible for someone else in similar shoes. Do what works for you, but you can model it after the 50-30-20 rule.
You spend 50 percent of your earnings on needs such as utilities, rent or mortgage, insurance, transportation or gas, and feeding. Thirty percent goes to your wants, which account for clothing, eating out or having fun outdoors, traveling, and entertainment.
Twenty percent would be better off in emergency funds, savings, and investments. If you have some debts to pay off, finance them from this portion of your wage.
2. Keep Housing Expenses Low
Housing expenses include transportation, rent, relocating costs, and taxes; you can find ways to reduce them. Let me examine them one after the other:
- Transportation: Living close to where you work can help you cut costs. You can either walk there, which may be suitable for your health or ride your bike. Alternatively, you can consider carpooling if you don’t live near your workplace.
- Rent: Rent can take up a considerable portion of your paycheck, and you can get around it if you are bent on the minimalist lifestyle. Consider getting a roommate, living in a more affordable neighborhood, and negotiating your rent. But most importantly, consider the tax rate for the location you choose.
- Cost of relocation: Yes, relocating can cost a significant amount, but you should try to beat it down as much as possible. For instance, consider selling items you don’t use, especially if they will take up considerable space in the moving vehicle. One option I particularly solicit is renting a truck and transporting your things yourself.
- Taxes: I touched briefly on taxes earlier; tax rates differ from one state to another, so you need to choose one that’s affordable for you. Furthermore, there are differences in tax rates in neighborhoods ranging from 0.2 percent to 4 percent. If you are on a budget, I guess I don’t need to tell you which one is best for you.
3. Look for Cheap Thrills
My favorite way to spend less. If you earn 25 bucks an hour, you will want to dedicate less of your money to entertainment. And since the best things in life are free, you will pay next to nothing for the next best things.
Cheap thrills create happy memories so long you are with people you love. You can even catch them alone; you only need to know where to look.
To have fun without spending much money, consider your hobbies. They don’t need to be indoors, even.
Outdoor activities like fishing, camping, or trekking through a hiking trail are fun ways to connect with nature and yourself. You can also consider swimming or having a picnic with your family and friends. The bills don’t have to be on you for the latter activity.
Looking for cheap thrills is not only a great way to spend less, but you will genuinely discover yourself in the process.
4. Save and Invest
I don’t think I can stress this enough.
Picture this – your factory suddenly has to let people go. Imagine how your heart would race if you didn’t have an emergency or backup fund.
Even if your factory does not lay you off, think about the financial trauma you put yourself through, albeit temporarily.
In essence, everyone needs a nest egg for emergencies. You don’t need to remove too much money every week or month. Ensure you reserve some for your future self, and you will be thankful for it.
Once you have established a nest egg for emergencies, you can build a concrete savings plan. I already mentioned the 50-30-20 rule, which is pretty popular.
Dave Ramsey recommends saving fifteen percent of your income for investments.
Keep a substantial sum for investments from twenty percent of your monthly or weekly income and reserve the rest in a savings account. When an investment opportunity comes along, please do your research and consider the risks properly before diving into it.
Regarding investments, get a grasp of yourself so that the Fear of Missing Out or FOMO does not get to you and cost you your hard-earned money.
Conclusion
Suppose you are a new wage earner, congratulations on landing a job that pays $25 an hour. And if you just got a raise, congratulations are also in order.
You can survive on your earnings, but you need discipline and diligence. You also need a budget!
