$40,000 A Year Is How Much an Hour? And Why That’s A Good Salary

When looking for a new job, it’s typical to try to figure out if it will be a good salary or wage. So you see one that will pay $40,000 per year? But how much is that an hour? And is that even a livable wage?

Well, keep reading to find out! You’ll get the whole breakdown and a monthly budget example.

40,000 per year breakdown and budget

How much is $40000 an hour?

$40,000 a year is $19.23 an hour based on working 40 hours per week for the 52 weeks in a year (2080 hours). After taxes, your salary would be a few thousand dollars less. If you make $40,000 per year, you would pay about $6k to $9k in taxes.

To make $40,000 per year after taxes are taken out, you would need a salary of about $50,000 per year (or $24.04 per hour).

$40,000 per year breaks down to:

  • $19.23 per hour (Annual ÷ 2080 hours)
  • $153.84 per day (Hourly x 8 hours)
  • $769.23 per week (Annual ÷ 52 weeks)
  • $1,538.46 biweekly (Weekly x 2)
  • $3,333.33 per month (Annual ÷ 12 months)

However, after taxes, $40000 would be reduced to $31,100 – $33,800 per year depending on the state you live in. Your total take-home paycheck would be:

  • Weekly paycheck= $598.08 to $650
  • Biweekly paycheck= $1,196.15 to $1,300
  • Monthly paycheck= $2,591.67 to $2,816.67

Whoa! That’s a $225/month difference between the highest and lowest taxed state. Meaning, one person could be paying $2,700 extra per year in taxes. To make the most of your salary, you might want to live in a state that does not tax your income.

States that don’t tax wages: Alaska, Florida, Nevada, South Dakota, Texas, Washington, Wyoming, New Hampshire, and Tennessee (per Investopedia)

Similar Wages

$20 an hour is how much a year? If you make $20 per hour, your yearly salary would be $41,600 before taxes. After taxes, that amount would be reduced to about $31,900 to $35,100 per year.

$38,000 a year is how much an hour? An hourly salary of $18.26 would give you $38,000 per year before taxes.

$41,000 a year is how much an hour? If you make $41k per year, your hourly wage would be about $19.71.

How much is $42,000 a year per hour? An hourly salary of $20.19 would give you $42,000 per year before taxes.

How much is $44,000 a year per hour? If you make $44k per year, your hourly wage would be about $21.15.

How much is $45,000 a year per hour? If you make $45k per year, your hourly wage would be about $21.63.

Is $40,000 a good salary?

For my family, $40,000 per year is a great salary. In fact, here’s how we lived on $2,500 per month in San Diego. However, everyone’s situation and finances are different. 

What counts as a good income depends on where you live, the cost of living in that area, your family size, etc. If you need to survive on $40,000 a year, it may be accomplished through budgeting and reducing your expenses.

Related Reading: Salary vs Hourly Wage: What’s The Difference?

Monthly Budget for $40,000 Salary

You’re probably still not sure if you can manage a 40k salary. Well, I’ve got it figured out for you!

Here is an example of how much you should budget for your total monthly expenses. This budget breakdown assumes that you make $2591.67 per month and you’re single. If the amounts don’t work for your life, play around with them a bit; but I urge you to always save first and foremost!

  • Savings of 10% = $259
  • Rent/ Mortgage= $860 (⅓ of income)
  • Utilities= $200
  • Car Payment= $200
  • Car Insurance= $100
  • Health Insurance= $200
  • Cellphone= $50
  • Internet= $50
  • Gas= $60
  • Groceries= $150
  • Personal & Misc= $200
  • Entertainment= $100
  • Total = $2429 with $162.67 leftover

So what do you think? This sample is not even a bare-bones budget. You could save $200/month by not having a car payment and buying a cheap car. It is also possible to have cheaper car insurance, spend less on the personal, misc, and entertainment categories, etc.

Monthly Budget for $40,000 Salary

40k a year is a good salary for a single person, but you can support a family on that amount as well. Where there is a will, there is a way! I, along with my siblings, were raised on that amount for a while and always lived a comfortable life. I’ve always had a roof over my head, shoes on my feet, and food in my stomach.

How to Live on $40,000 a Year

On any salary, the most important thing is to live below your means. Regardless of income, the main reason why people end up in debt is because they are spending more than they earn. If you want to live a life of financial freedom, that is not good.

The 4 main steps to being financially secure with your income are to:

  1. Create a budget: Learn how to create a simple budget here.
  2. Save money: Remember, save first then spend.
  3. Lower your expenses: Here are 40 frugal living tips that I live by.
  4. Pay off debt fast: Paying the minimum results in crazy interest fees. Fast track your debt payoff by doing these things.

Learn more tips with my guide: How To Live On A Budget.

40k is a decent salary. But, if you just can’t make this salary work for your lifestyle, then it might be best to look for a better paying job, or pick up a side hustle.

Related Posts: 


What can I afford making 40k a year?

Keeping your budget at around ⅓ for housing costs ($860), you could buy a home for around $200,000 with a 30-year loan, and 3% interest rate.

$19.23 an hour is how much a year?

An hourly wage of $19.23 comes out to $40,000 per year. After taxes, that would come down to $31,100 – $33,800 depending on your state tax rate.

What is $20 an hour annually?

Per year, $20 an hour is $41,600 per year before taxes.

Is 40k a year a good starting salary?

Starting out, $40,000 is a great salary to have. Most people make $30,000 or less.

How much is $23 dollars an hour annually?

$23 per hour is $47,840 annually.

25 thoughts on “$40,000 A Year Is How Much an Hour? And Why That’s A Good Salary”

    • Hi Jay, good luck! Please let me know if you need any help budgeting, I have a wealth of other posts that you may find useful.

  1. Thank you so so much for this article. I just stumbled on to it as well. I live in a state that does not have state taxes. Would you mind telling me the take home of 40k?

    • @Martina, Yea is this article a joke 40k before taxes it nothing in 2021 and these numbers she presented are not realistic.

      • Hi AL, thanks for your input. This post is certainly not a joke. While these numbers are hard for some people, they are based on budgets of actual people, including myself.

  2. Hi! This is good information; however, I am confused about how this is accurate:

    Weekly paycheck= $598.08 to $650
    Biweekly paycheck= $1,196.15 to $1,300

    If I am paid biweekly, that means I am paid 2 times per week, so it doesn’t make sense that would be more than my weekly paycheck.

    • Hi Tanya, I just learned something new because of you and completely understand the confusion! I looked it up just to be sure. Biweekly refers to both “twice per week” and “every other week”. However, biweekly pay typically refers to getting paid every other week, which is why the numbers were doubled.

    • @Tanya, I think in conjunction with the previous answer, a larger amount is probably a larger tax amount. Some states have tax groups; and the combination of two weeks pay, may put that tax at a larger amount; VS a weekly check at a lower amount. That lower amount could constitute a lower tax or all the other stuff that comes out based on percentages. #notfactchecked – #Justreadingand commenting.

  3. My experience has been when moving from a state like CA and finding another job, the pay is 10% less-or more- which negates any tax savings! I wish I could take my salary to another state to avoid taxes, but these things are proportional.

    • Hi Erika. If you have a career field that has work from home positions, that would be a great way to make good money and move to a cheaper area.

  4. This almost exactly matches the budget I had in 2012 in Los Angeles at a salary of 41,500 when rent was only $900. I wish rents were still that cheap. I’ve never in my life been able to rely on a used car. They always break and cause huge debts in repairs. what good is an old paid off, $1,500 car if it just breaks and costs me $6,000 to fix? Ever since then I purchased new but economy cars at about $250 a month. The peace of mind is worth it.

    • Los Angeles is expensive! I lived in SD (2018) and found a few small 1-bedrooms for $1k. And that is true Erika, used cars aren’t great if they break down often. But I have found that Hondas from around 1998 are usually pretty good and cheap. I was lucky to find my first car for $2000 and only around 30k miles.

  5. I stumbled across this and found it extremely helpful! I’m having a lot of changes in my life including a new job and a new place to live and being single for the first time since I lived with my parents. Thank you so much for helping me understand how much I need to budget for my new job!

    • Hi Lauren! I’m so glad that this information was helpful to you! I wish you all the best of luck at your new workplace and for all the changes in your life!

  6. I am from west Texas 40,000 would be hard to live on here 1bed room apts or about 1,000 a month and that’s for a cheap one for a nice one is 1400 a month food is expensive here if you have a family and a house and 2 cars you would need to make 60,000 dollars a year. I got my house paid off and both cars at the time I was making about 96,000 a year. Now I only make 55,000 a year with everything paid off and I barley getting by. You also forgot to add insurance here it’s 1200 a month for family insurance.

  7. What about childcare? Looking at 1k a month or more per kid under 5 or less but still some for before and after school care. Where is that budgeted? Or is one member of the family staying home?

    • Hello Blonde,

      As stated, “This budget breakdown assumes that you make $2591.67 per month and you’re single.” Everyone’s budget will look different and this is just a example of one possibility.


  8. When were these figures calculated? 2010? These numbers are unrealistic. You have to double each of these budget items to even be close to 2022 estimates! $150 for groceries per month? $60 month for gas? only $860 for rent????? Please do not give false hope! Its cruel!

    • Hi Didi, this post is not that old, but it is pre-inflation and accurately based on the area I lived in at the time. However, I still do spend $150 or less on groceries, especially when I don’t buy pre-packaged meals. Rent can also be found out those prices still (ex. Grand Forks, NV), but certainly not everywhere. As I’ve stated, this is only an example of a budget and the numbers would be different for everyone.

  9. Thank you for this useful information. I just started a new job and my salary is $40K per year. This break down is helpful to me for when I get my first paycheck to make sure the pay is correct. There will be some wiggle room for taxes for sure. Thank you so much!

  10. This is helpful, thanks for sharing! This may end up being my full-time salary. I’m married and the budget you outlined is pretty accurate for us.


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