Whatever your hourly, or monthly wage, we all know how quickly it can go. The rising costs of living, house prices, and general outgoings have skyrocketed over recent years leaving us with less disposable income than ever before.
Whilst $20 an hour may seem like a big increase on the federal minimum wage, which will vary from state to state, how much does this equate to over the period of a month, or annually? And is it enough to not only live on but to lead a comfortable lifestyle?
This will vary from state to state and where you live. There are huge differences in house prices and rental costs across the country. Likewise, the cost of living can vary massively from area to area.
This will ultimately have a huge impact on how much bang for your buck you’re going to get from a $20 an hour wage.
The other consideration will be how many hours you work a week. If you work part-time, or full-time, or even flexible hours, it will affect your monthly paycheck.
In this article, we will look at a detailed breakdown of how much $20 will earn you over a year based on a variety of working factors. We will also discuss whether this income is enough to live on, or if you need to learn how to make your money stretch further with some clever budgeting hacks.
We will also consider how much more you would make if you earned even 50 cents more per hour and the difference this would make on your annual earnings and way of life.
By understanding your income in more detail, you can begin to make positive changes to make your money work for you. Rather than living paycheck to paycheck, we will look at how some small budgeting tips can help you to save for a rainy day and save some serious cash.
So are you ready to find out how much $20 an hour will get you over a year and whether this can work for you? Let us dive in.

How Much Do You Earn Each Year If You Earn $20 Per Hour?
If you earn $20 per hour there will be several factors involved in calculating your annual earnings. Do you work full time? Part-time? Or are you a flexible worker? Do you receive bonus payments or commission on top of your hourly salary?
Also, do you have a student loan debt that will be deducted from your paycheck? And what is your state tax compared to another state? For this reason, we will look at how much $20 an hour will make you each year based on your gross salary and also your take-home income.
What Is Gross Pay?
Your gross pay is defined as the amount of money an individual earns in a given period before any deductions are made. These deductions will include state taxes, any retirement funds, healthcare insurances, or any student loan deductions.
It is important to consider how much these deductions will be for you once you consider your monthly paycheck as this can account for a significant proportion of your overall paycheck and can come as a shock if you’re not expecting it.
State taxes average around 5% of your salary. However, there are some states such as Alaska that charge 0% state tax.
States That Have 0% Income Tax
There are 8 states in the country that do not charge an income tax on wages. This can be a huge appeal to people who begrudge paying this charge on their hard-earned dollars. However, it is worth noting that in these states, whilst there is 0% income tax, there could be
higher sales taxes or property taxes.
Which 8 states have no income tax:
- Alaska
- Florida
- Nevada
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
How Much Do You Earn A Year If You Make $20 An Hour And Work Full Time?
Typically the average workweek for an American adult working full time is 40 hours per week. There are 52 weeks in a year in which you can work. Based on these figures, if you were to work for 40 hours per week, every single week of the year, you would make a gross income of $41,600 per year.
This is calculated by the following equation:
40 hours per week x 52 weeks x $20 = $41,600
If you work a 30 hour week then we can calculate the annual income amount, in the same way, to determine that a full-time worker, working 30 hours per week, would earn $31,200.
These figures are calculated as your gross income and do not account for any taxes, insurances, or loans which will be deducted from your salary. Once these are deducted you will receive your net paycheck which will be the amount you take home.
These amounts will vary from state to state and depend on an individual’s circumstances such as whether they have a student loan, and the amount of any healthcare contributions made. This income will also be affected by any sick days taken, and whether your employer pays for holidays.
How Much Do You Earn A Year If You Make $20 An Hour And Work Part-Time?
If you work part-time you will earn significantly less than a full-time employee. If you work 20 hours per week, for instance, you will earn half as much as an employee working 40 hours per week.
We can calculate a part-time annual salary if you earn $20 per hour in the same way as a full-time employee:
20 hours per week x 52 weeks x $20 = $20,800
If you work a 25 hour week then we can calculate the annual income amount, in the same way, to determine that a part-time worker, working 25 hours per week, would earn $26,000 per year.
Once again, these figures are calculated as your gross income and do not account for any taxes, insurances, or loans which will be deducted from your salary. Once these are deducted you will receive your net paycheck which will be the amount you take home.
What Is My Take-Home Net Pay?
As we have looked at what your gross pay is, your net pay will be the amount of money you take home once any deductions have been made. This will be the amount stated on your paycheck and the amount that will be deposited into your checking account.
In the USA the average state income tax will be around 5% per month. However, there are 8 states that have a 0% income tax.
For a full-time employee working 40 hours per week, this would equate to $2,080 per year for a 5% state income tax. For a part-time worker who works 20 hours per week, this would equate to $1,040 per year.
Additionally to a state income tax, you can also expect to pay around 15.1% of your salary on insurance, healthcare, your 401(k) plan, and any additional federal taxes.
For a full-time employee working 40 hours per week, this would equate to $6,281.60 per year for a 15.1% contribution to additional deductions. For a part-time worker who works 20 hours per week, this would equate to $3,140.80 per year.
Based on these average figures, your net pay will be significantly less than you may have originally thought. Assuming you work 2,080 hours per year as a full-time employee, these deductions would equate to an hourly rate of pay of around $15.98, with just over $4 per hour going to state and federal taxes, and other deductions.
How Much Do You Earn A Week If You Make $20 An Hour And Work Full Time?
If you’re looking to see exactly how much you make each week and how you can make your money work better for you, then knowing your weekly earnings can be a great tool to see exactly where you stand.
For a full-time employee working 40 hours a week and earning $20 per hour, then your weekly gross salary would be $800.
Based on the average deductions, your net pay would be $639.20 per week.
If you work 30 hours per week, your gross weekly pay would be $600 and your take-home net pay would be $479.40 per week.
How Much Do You Earn A Week If You Make $20 An Hour And Work Part-Time?
For a part-time employee working 20 hours a week and earning $20 per hour, then your weekly gross salary would be $400.
Based on the average deductions, your net pay would be $319.60 per week.
If you work 25 hours per week, your gross weekly pay would be $500 and your take-home net pay would be $399.50 per week.
How Much Do You Earn If You Make $20 An Hour And Get Paid Bi-Weekly?
Full-Time Worker
If you work full-time (average 40 hours per week), and get paid bi-weekly at a rate of $20 per hour, your bi-weekly gross paycheck would be $1600.
Based on the average deductions, your net pay would be $1,278.40 per 2 weeks.
If you work 30 hours per week, your gross bi-weekly pay would be $1200 and your take-home net pay would be $958.80 per 2 weeks.
Work Part-Time?
For a part-time employee working 20 hours a week and earning $20 per hour, then your bi-weekly gross salary would be $800.
Based on the average deductions, your net pay would be $639.20 per 2 weeks.
If you work 25 hours per week, your gross bi-weekly pay would be $1000 and your take-home net pay would be $799 per 2 weeks.
How Much Do You Earn A Day If You Make $20 An Hour And Work Full Time?
If you’re looking to see exactly how much you make each day and how you can make your money work better for you, then knowing your daily income can be a great way to manage your finances more effectively.
This daily amount will vary depending on how many hours you work each day. We have based this on an average working day of 8 hours.
For a full-time employee working 8 hours a day and earning $20 per hour, then your daily gross salary would be $160.
Based on the average deductions, your net pay would be $127.84 per day.
If you work 10 hours per day, your gross daily pay would be $200 and your take-home net pay would be $159.80 per day.
How Much Do You Earn A Day If You Make $20 An Hour And Work Part-Time?
For a part-time employee working 4 hours a day and earning $20 per hour, then your daily gross salary would be $80.
Based on the average deductions, your net pay would be $63.92 per day.
Summary Of How Much You Earn If You Earn $20 An Hour
Here is a quick breakdown of how much NET pay you will take home if you earn $20 per hour. This is an assumption based on average taxes and deductions. Your earnings could be higher or lower depending on which state you live in, and your own personal circumstances.
- Total take-home income over 52 weeks – $33,238.40
- Total take-home income over 50 weeks – $31,960
- Total take-home income per week (40 hours) – $639.20
- Total take-home income bi-weekly (80 hours) – $1,278.40
- Daily Income (8 hours) – $127.84
Can You Live Comfortably If You Earn $20 An Hour?
If you earn $20 an hour, there will be many different factors to determine whether this wage will allow you to live comfortably. If you work full-time, or part-time will also be a contributing factor, along with whether you live alone, or with a partner, roommate, or family.
The cost of living in America has also increased significantly over recent years, and this can change dramatically from state to state. If you live in central New York or California for instance, the cost of rent will be marginally higher than in some smaller states.
Your lifestyle and your disposable expenditure will also play a large part in whether you can comfortably afford to live when earning $20 an hour. If you frequently socialize and eat out, you might find yourself in a situation where you are struggling to meet the demands of your basic bills.
You could fall into bad debt and live paycheck to paycheck. When this is the case it will be necessary to make some sacrifices to make your money work for you.
Ways You Can Save Money To Live More Comfortably
There are several ways you can manage your money better to enjoy a more comfortable way of living, improve your savings, or create a larger disposable income.
By utilizing these tips, you can stretch your income and make your $20 per hour paycheck work for you.
Let’s take a look at how you can make some clever changes to your spending habits to save some money and free up some income:
1. Save Before You Spend
Generally, when people try to save money, they look at their monthly paycheck, spend the remainder on food, entertainment, and day-to-day expenses, and then see what they have left to save. Which more often than not, is not very much.
By saving what you have left (if anything), you are creating a mindset that saving money is a low priority, it is the last thing left on the list. And generally speaking, low priority goals are very rarely achieved.
So what can you do to change this?
Firstly, whether you get paid weekly, monthly, or twice a month, sit down and work out your base costs for living. How much is your mortgage or rent? How much are your baseline bills including groceries and gas?
Once you have this information, deduct it from your paycheck and see what you have left. Now, based on your saving goals, deduct a realistic amount of money and transfer it to a savings account.
Whatever is left is your disposable income to spend on luxuries such as eating out, mall trips, or entertainment.
By turning your disposable income into your savings, you are prioritizing your saving goal and you will enjoy those indulgences, even more, knowing that it is not costing you your savings.
Another point to add here is to move your monthly savings into a dedicated savings account. This way you will earn interest on any amount deposited and it will remove the risk of accidental spending as opposed to keeping it in your checking account.
2. Save On Bills
Without having to cut back on your monthly outgoings to increase your monthly disposable income, a really good way to start saving is to look at your current outgoings and see where you can cut them down.
How long has it been since you reviewed your service providers for your utilities, entertainment packages, insurance premiums, or cell phone?
Without realizing it, millions of Americans each year are simply auto-renewing their service plans without negotiating better terms.
Do you currently use all of the services on your cell phone bill? Could your vehicle insurance be reduced? Have you been a loyal customer with a service provider for a long time and deserve a financial incentive?
Have a phone conversation with your service providers and see what they can do to help. Ask if they have any better deals to offer you.
You will be surprised how much room companies have to offer better deals to their long-standing customers. And in turn, you’ll be surprised how much you can shave from your monthly outgoings each month.
3. Plan Your Meals And Cut Back On Eating Out
When you’re busy it is so easy and convenient to grab food on the go, eat out in the evening, or grab a take-out. After all, eating is not only essential, but good food is one of life’s greatest enjoyments!
However, have you ever really considered how much you’re spending on your morning coffee? Or by grabbing lunch out each day? Or your weekly (or more) take-out order?
Whilst we are by no means suggesting that you need to live life without any luxury to save some cash, you can make some simple changes to reduce your expenditure.
Set some time aside and work through your checks for a month and work out how much eating out is costing you.
Invest in a take-out cup and make that coffee from home before you commute to work. Set yourself a goal of how many days per week you will take your own lunch to work and stick to it.
You can also make huge savings on your grocery bills by setting out a weekly meal plan, writing a shopping list to take to the store with you, and not making unnecessary purchases.
Invest in some good tupperware and freeze any leftovers for future dinner options, or use it for your lunch the next day.
On average, American families spend thousands per year on eating out and wasting food. You will be surprised how a few simple changes can make a big difference to your monthly outgoings. Before you know it, your $20 is stretching a lot further.
4. Start A Side Hustle
Using your spare time to start a side hustle can be a great way to increase your monthly income without burning you out. Increasing your earning capacity by just one hour a day could equate to thousands of dollars each year.
These micro jobs are often available through online platforms which you can pick up in your free time to start earning some extra cash. Make a list of your skillset and have a look through dedicated micro job sites to see what is available.
If you love animals and the outdoors, you could also advertise your services as a dog walker or pet sitter in your neighborhood.
Another consideration to add here is whether you need to start a side hustle at all. If you’ve made a list of your skills and services and thought ‘dang, I’m a pretty versatile and competent person’ – you could always take this list to your current employer and try to negotiate a raise.
By increasing your hourly pay by only 50 cents per hour, you will earn an additional $1,040 per year so it is definitely worth enquiring about!
5. Sell Unwanted Goods
One of the easiest ways to free up some cash without making any changes to your day-to-day life is to sell any unwanted goods within your household.
Take some time to create an inventory of items you haven’t used for a period of time and list it on a selling site.
This can also be done for clothing, toys, and electronics and will be a popular choice in the run-up to the holiday season.
If you use this listing as a passive way to increase your income, you will soon be surprised how much value you can add to your savings.
6. Swap Instead Of Buy
Similar to the above, there are lots of swap and sell sites where you can link up with local neighbors to swap your goods for theirs instead of buying new ones.
This is an extremely useful way to save some money in the holiday season and you can find yourself some real bargains. Think of it as a massive yard sale!
7. Prioritize What You Buy
Before making any indulgent purchases, ask yourself the following questions, sleep on it, and then ask them again:
- Do I Love It? – Is it something I will treasure or will it just be thrown in a drawer and forgotten about
- Do I Need It? – Can I live without this item or is it a necessity?
- Do I Already Have It? – Do you already have a perfectly good alternative that you can manage with for now?
8. Get A Cashback Card
Another way to save some cash from your existing spending is to invest in a cashback card. These credit cards typically offer a percentage of cashback for purchases made through the card. If you are using your card frequently to make purchases, you can increase your income stream very easily.
Have a look through your standard average monthly transactions and see which ones could be charged to your cashback card instead. Look to pay for groceries, dining out, gas, and utilities via your credit cashback card instead of paying for it directly from your checking account.
Once transactions have been made, transfer the amount from your checking account to pay off the balances in full. You will be surprised how much cashback you will get per month just from changing the way you shop.
Is It Possible To Buy A House If You Earn $20 An Hour?
The question of whether you can afford to buy a house if you earn $20 an hour is complex and not a straightforward yes or no question. Factors such as whether you are buying the house alone or with a partner, or whether you have a sizable deposit to put down will reflect the feasibility of being accepted for a mortgage.
The location of where you’re looking to buy a house will also be a contributing factor in whether you can buy a house on your annual wage with house prices varying enormously on a like-for-like basis across different states.
If you are happy to live in a smaller house or look at a cheaper location, then 20 dollars an hour can be an affordable amount to secure a mortgage on a property valued at around $200,000.
However, taking into account that the average price of an American house is around the $375,000 mark, you will have to take into consideration that the property you buy might be significantly smaller than you would have hoped for.
There’s also the strong likelihood that a $2000,000 home may need to have some work done to it. Another thing to consider would be to purchase a tiny home. Tiny homes give people the opportunity to get onto the housing market without breaking the bank.
Not only are tiny houses more affordable, but they are also more economical to run and much more sustainable for the environment. This means they will cost much less to run and give you a bigger saving on your monthly bills and expenditure.
How Can You Increase Your Chances Of Qualifying For A Mortgage?
There are a few simple ways you can increase your likelihood of being accepted for a mortgage on an income of $20 per hour. These are:
1. Reduce Your Debt
If there is one thing that mortgage lenders dislike, it is a lot of accumulated and unpaid debt. A mortgage loan will in all likelihood be the largest loan you will have against your name.
Mortgage lenders require reliability and look for responsible lenders. Before making a mortgage application, try to consolidate your debts as much as possible.
2. Set Aside An Emergency Fund
Put simply, an emergency fund is a set amount of money that you have set aside for a rainy day. By allocating a percentage of your monthly wage each month and transferring it to a dedicated emergency fund account, you are demonstrating responsibility.
Lenders will be much more comfortable and likely to loan funds if they believe you have resources available for unlikely eventualities.
3.Have a Debt To Income Ratio Of Less Than 43%
As a general guideline, mortgage lenders will not accept any mortgage loan applications where individuals have a DTI ratio of more than 43%. Ideally, mortgage lenders would like to see a ratio of around 36% to comfortably accept a mortgage application.
This demonstrates that an applicant can comfortably afford the monthly cost of any mortgage fees. Reducing any outstanding debt prior to a mortgage application will significantly reduce your debt to income ratio.
Examples Of Jobs That Will Earn You $20 An Hour
If you aim to find a job that will earn you $20 an hour, then luckily there are a lot of opportunities. Many of these do not require college degrees or years of experience, with some even home-based.
Write a list of your skills and attributes and spruce up your resume. Remember, the only person who can truly sell yourself is you!
Here are some example jobs where you can earn $20 an hour:
- Bartender
- Chef
- Customer Service Representative
- Fast Food Shift Manager
- Lodgings Manager
- Proofreader
- Tutor
- Virtual Assistant
This list is just a small snippet of what is available on the job market to earn a $20 an hour wage. However, it highlights the variation of jobs available, and there is something for everyone if you’re prepared to put the work in.
Final Thoughts
So, in conclusion, how much does $20 an hour equate to as an annual salary? And is it enough to live comfortably, or a high enough salary to buy a home? The long and short answer here is that it depends!
Your personal circumstances will play a large role in whether or not you can afford to live earning $20 an hour. The difference between full-time and part-time workers will also make a difference to the affordability of living.
Couple this with the fact that you may be living alone or sharing the cost of living with a partner or friend, and this can all determine the affordability of whether an hourly wage of $20 is adequate.
Luckily, there are many ways in which you can reduce your monthly outgoings, and streamline how you spend your cash to make your money go further.
Whilst it is quite easy to determine how much $20 an hour will leave you with each year, it is a completely unique and variable circumstance to see if $20 an hour is a liveable amount for you.
However, with some clever hints and budgeting tips, there is no reason why you should not be able to live comfortably earning $20 an hour.
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