$40,000 a Year is How Much an Hour

By Forrest McCall | Last Updated: April 13, 2022

Exploring new job opportunities? Want to know how much you make per hour if your annual salary is $40,000?

I'll explore if it's a livable wage, a budget breakdown, and much more.

Keep reading to find out $40,000 a year is how much per hour.

Want Quick Money? Try These Methods! 👇

When weighing the costs and benefits of a potential job or side hustle, it's a good idea to convert your pay into an hourly rate. This will help you to know if the job is worth your time based on the opportunity cost.

If you assume 2,080 hours in the work year, your hourly income would amount to roughly $19.23 per hour.

In the figure above, this assumes a 40 hour work week for 52 weeks. Do you get vacation or personal time off of work? Then you'll actually be making more per hour. Below are a few examples.

  • For those with 2 weeks of paid time off (PTO) per year, your true hourly rate would be $20 per hour.
  • For those with 3 weeks of paid time off (PTO) per year, your true hourly rate would be $20.41 per hour.

However, this can also work in the opposite direction. Do you find yourself consistently working 50 hours per week?

If so, your hourly pay would amount to $15.38. This is significantly less per hour.

$40,000 Salary After Taxes

Unfortunately, Uncle Sam always takes his cut when it comes to your pay.

With this income, your federal tax rate would be 12%.

So your $40,000 salary would be reduced to around $35,200 after federal taxes.

You might be wondering about state and city taxes, also. These will reduce your income even further depending on the state and city you live in.

Alternatively, if you live in a state with no income taxes, this number could be pretty accurate.

$40,000 a Year is How Much Per Paycheck?

Now that you know your hourly rate, you might be wondering how much that would be per paycheck. We've calculated it for you!

  • For those paid monthly (12 times per year), your pay would be $3,333.33 each month before any deductions
  • For those paid biweekly (every 2 weeks), your pay would be $1,538.40 before any deductions
  • For those lucky enough to be paid weekly, your pay would be $769.20 each week before any deductions.

Is $40,000 a Good Salary?

$40,000 can be a good salary in some areas, and barely a livable wage in others. It all depends on the cost of living in your area.

For states and cities with a high cost of living, this salary can be very difficult to live off of.

For states and cities with a low cost of living, this salary is manageable. 

How Much is a $40,000 Salary?

The average household income is roughly $56,000 in the United States making a $40,000 salary slightly above average assuming a dual income.

Is $19.23 a Good Hourly Rate?

If you're making $40,000 a year, or $19.23 per hour, you're probably wondering how that compares to others. To put things in perspective, the minimum wage is currently $7.25 per hour, meaning you make more than twice (almost 3 times!) the minimum wage.

  • If you make $40,000 per year, you will make $153.84 per day (assuming a normal work week)

$40,000 Salary Monthly Budget Breakdown

Below is an example of how you can construct your monthly budget with a $40,000 salary or around $32,500 after taxes.

  • Rent/ Mortgage= $900
  • Utilities= $200
  • Car Insurance= $100
  • Internet= $60
  • Health Insurance= $200
  • Cellphone= $50
  • Gas= $65
  • Groceries= $150
  • Personal & Misc= $250
  • Entertainment= $100

With this budget, you'll be left with $633.33 that you can save or invest for the future.

As you can see, it can be possible to live off of a $40,000 salary in some locations. But it might be more difficult in others.

Simple Tips to Manage Your Money

Now that we've discussed how much a $40,000 salary really is, here are some tips to help you make the most of your income.

  • Live below your means. Trying to stay under budget is critical to building long-term wealth. By using an app like Truebill you can have your bills negotiated for you to save you money each month.
  • Work to increase your income. Making more money can help you get ahead financially, so try to find ways you can make more money.
  • Save money automatically. Having a set amount of money transferred from your checking account to your savings account each month can help you reach your financial goals.
  • Pay off debt. Carrying high-interest debt can make it difficult to save money and reach your financial goals.
  • Make investing a priority. Investing early and often can help you build wealth over time. Use an app like Acorns and get $10 free to invest!

Want to Make More than $40,000?

If $40,000 isn't enough for your lifestyle, there are many ways you can make more money. Below are some of the best ways you can make more money if you have a $40,000 salary. Some jobs pay $30 an hour or more!

Start Freelancing

Freelancing can be one of the quickest ways to increase your income and boost your $40,000 annual salary.

Depending on the type of freelancing you do, it's possible to make anywhere from $20 to over $50 per hour for your time.

Plus, freelancing gives you the opportunity to work from home, which can save you money on childcare, commuting, and other expenses.

Drive for a Ride-Hailing Service

While this might not be the most sexy option to make money, it does work and is quite simple to get started. You can register on various ride-hailing service websites and can get approved in less than one week.

You can make as much as $20 per hour for your time driving, but you'll need to deduct some common expenses like fuel and car maintenance.

Driving for a ride hailing service is a great way to make money doing nothing if you're already driving around the city. While you won't get rich, it's a great side hustle to boost your income.

With Doordash you can set your own schedule and work when you want. Earn over $20 per hour today!
Sign Up Now!
Disclosure: This link is an affiliate link, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.

Ask for a Raise

Many people overlook this option of making more money out of fear of being rejected. It's important to realize that there are only two potential outcomes of asking for a raise, yes or no. Every additional dollar you could end up making could go towards paying off debt or saving for retirement.

Pick Up a Part-Time Job

If you work a normal desk job from 8-5, you'll probably have some time available on week nights and weekends. You can use this time to work a part-time job giving you a boost to your income. Even if it doesn't pay as well as your day job, it's still an excellent way to knock out debt and take control of your finances.

Flip Furniture (or Anything!)

The market for flipping furniture, electronics, sneakers, and many other items has exploded over recent years. When it comes to furniture, consumers looks the unique character that antique pieces may relish and are willing to shell out a sizable amount for them.

Electronics can be considered more easy and quicker to flip in some cases. While you might not make as much per piece as you would furniture, you can increase the quantity of sales because of the lower time requirements.

There are many ways you can flip money, you just have to get started!

Grow Your Money

One of the best ways to increase your income is by letting your money work for you. This can be through investing in appreciating assets or growing various types of income

Investing is essential on your journey towards financial freedom and independent wealth.

Can I Invest Making $40,000 a Year?

No matter the amount of money you make, you should always try to save some of it for investing. Between retirement accounts and other investment accounts, try to invest as much as you can to maximize the effects of compound interest.

Acorns 5 · Stock Market · $10 Min.
Get $20 in free stocks when you open a new Acorns account. Join millions of happy customers building wealth today and get $20 completely free to invest!
Risk Level
Avg. Return
7% - 15%
Claim $20 in Free Stocks!

Conclusion: Making $40,000 Annually

A $40,000 annual salary is certainly more than many American's make. However, if you do not feel as if it is enough, there are many methods you can use to make more money.

Between flipping furniture, or driving for a ride-hailing service, your options are endless.