$45,000 A Year Is How Much Per Hour?

If you recently interviewed for a position offering $45,000 per year, you might be wondering, “$45,000 a year is how much per hour?”  Let’s take a closer look.

Is $45,000 a Good Salary?

Is $45,000 per year a good salary compared with other employees across the nation? Studies suggest it is.

Research carried out in May 2021 to find average hourly wages for American employees discovered the American average is around $11.30 per hour. The hourly wage of a $45,000/year earner is almost double that at $21.63 – assuming a 40 hour work week 52 weeks a year.

So, is this a good salary? It depends on many factors, such as the cost of living in your state, how much you pay in state taxes and your lifestyle. Budget aside, let’s take a look at what your paycheck looks like with a salary of $45,000 per year.

How Much Do I Make A Week If I Earn $45k A Year?

Before you say “I accept” to a position with an annual wage of $45,000, you should know how many hours the employer expects you to work every week.

The general rule of thumb is 40 hours per week divided into five 8-hour days. That said, this can range between 35 to 40 hours depending on your employer.

Some employers even provide two weeks’ worth of paid time off (PTO). So, assuming you have a typical 40-hour week with earnings that stretch through all 52 weeks, your weekly earnings (before taxes) would be $865.

How Much Do I Make a Month if I Earn $45k A Year?

If you receive monthly paychecks rather than weekly or biweekly, you would only receive 12 paychecks per year but there would be more money in each paycheck.

Your pre-tax monthly earnings on $45,000 per year would be $3,750.

$45,000 a Year Is How Much Biweekly?

$45,000 annually split into biweekly payments calculates how much you earn for every two-week period. There are 52 weeks in a year – divided in half nets 26 bi-weekly paychecks of $1,730.77.

So far, these calculations don’t account for taxes and other common deductions – all of these calculations are of gross pay, not net pay.

Taxes and other common deductions include:

• Federal income tax
• State income tax
• Social Security
• Medicare
• Retirement
• Healthcare
• Flex spend
• Health insurance

How Much Is $22 An Hour Annually?

Now, the typical hourly wage for a $45,000/year employee is $21.63. If your job pays $22 an hour, this comes out to $45,760 each year. This is calculated on the assumption that you work and/or are paid for 2,080 hours of work each year. Breaking this down into an annual salary based on work hours alone:

20 hours a week @ $22/hour = $22,880/year

30 hours a week @ $22/hour = $34,320/year

40 hours a week @ $21.63/hour = $45,000/year but

40 hours a week @ $22/hour = $45,760 – meaning if you can get a $0.37/hour raise, you can earn $760 extra each year before taxes.

Can You Live On $45k A Year?

That depends on where you live, whether you own or rent your home and many other factors. Here are the stats around the nation to review cost of living calculations.

For our purposes here, the average nationwide cost of living is set at 100 so you can see the differences between states compared with the national average.

California

• Overall cost of living in California: 149.1
• Groceries: 105.1
• Housing: 239.1
• Median cost of a home purchase: $684,800*

Michigan

• Overall cost of living in Michigan: 89.6
• Groceries: 93.4
• Housing: 65.5
• Median cost of a home purchase: $207,800*

Texas

• Overall cost of living in Texas: 93.9
• Groceries: 93.7
• Housing: 84.3
• Median cost of a home purchase: $243,600*

Maine

• Overall cost of living in Maine: 96.5
• Groceries: 107.1
• Housing: 99.2
• Median cost of a home purchase: $301,700*

*nationwide average: $291,700

So, can you live on $45,000 annually in these states?

• California: No
• Michigan: Yes

California vs Michigan comparison

• Texas: Yes
• Maine: Maybe…

Texas vs Maine comparison

$45k A Year Is How Much an Hour After Taxes?

In California, $21.63 an hour means you’ll take home $17.39 an hour after taxes.

State income tax on $21.63 is $0.61. Gross annual pay of $45,000 is a net, take-home page of $35,956.

Texans enjoy no state income tax, so $21.63 an hour equates to $18.25 an hour take-home or net pay. Gross annual pay of $45,000 nets $37,863.

How Much Is $45k a Year Compared to All Americans?

According to FRED’s Economic Data, the median annual US income was $35,805 in 2020.

A $45,000 annual salary falls just below what’s considered a good 2021 salary – anything above $51,480. But, there are several factors to consider when deciding what a good salary is.

As shown above, salaries and whether they’re “good” or not depend a lot on factors such as where you live. States differ greatly, as do the cities within them. Your job title, education level achieved and even, unfortunately, gender and race can be deciding factors of salary.

What Types of Jobs Pay $45,000 a Year?

In reviewing the Bureau of Labor’s (BOL) Occupational Outlook Handbook, the following positions tend to provide a median pay between $40,000 and $60,000 annually. Depending on your education level and other factors, you may start a position at a lower pay but you have the opportunity to work your way up to a higher salary as you improve your skills and gain experience.

• Property managers,
• Physical therapist assistants,
• Flight attendants,
• Sales reps and
• Telecom line installation professionals

These are just a few positions that offer salaries at or around $45,000 annually.

How To Make More Than $45k a Year

The calculations offered in this piece take into account that you work full-time employee hours (2,080) every year.

In the real world, many employees take time away from the grind to focus on other activities. And, while your actual hours might stay the same, you might not actually work all of them if your employer offers PTO throughout the year. For instance, if you get two weeks of paid-time-off each year, this actually boosts your hourly wage because you’re not actually performing any work for the PTO hours you receive.

Plus, most employers offer PTO for federal holidays like Independence Day and Christmas. Many salaried team members have between eight and ten federal holidays paid annually in addition to their two weeks of paid time off, which can translate to three or four weeks of leave each year.

In this case, instead of dividing $45,000 by the full 2,080 hours or 52 weeks, you’d divide instead by 48 weeks, effectively boosting your hourly wage to $23.44. This paid time off can be the perfect chance to unwind, train for advanced positions, start a side hustle or learn about investing so your money can work for you.

Make Your Money Work Harder Than You Do By Investing

Really getting ahead – really seeing your dreams come to fruition – means you’ve got to learn how your money can turn into more money, such as making investments in assets that will appreciate over time or provide an additional income source.

Creating a budget can help you see where your money is going, where it ought to be going and make the necessary adjustments. Putting money into an emergency fund is advised.

Gaining control over your finances can help you find the resources to begin investing in such things as stocks, ETFs and even crypto if you’re so inclined.

If your employer offers a 401(k) plan with an impressive matching deposit, that’s a great way to finance your future. This helps you control your investments and offers tax-deferred financial growth – in other words, you can make money later on the money you’re making now.

The most important aspect of investing, however, is not to put all your eggs into the same proverbial basket. Your investments should be diversified enough that if you experience a loss in one “basket”, it doesn’t affect the others.

Invest in Dividend Paying Stocks

You can find several services offering investment insights, such as Financhill. While all advice has some merit, it’s important to invest according to your own personal financial situation.

If you decide to invest in the stock market, research the best stocks offering dividend payments.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.