40000 a Year is How Much an Hour? (with Sample Budget)

Is $40,000 a year a good salary? If you earn $40,000 a year you make between $18 and $22 an hour, with $19.23 per hour a close exact amount. In most locations, you can live on this income with a small family if you manage your money carefully.

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Are you looking for a new job and wondering if your salary is 40000 a year how much an hour that is?

A quick breakdown for you shows the approximate hourly wage if you earn $40,000 a year is between $18 and $22 an hour, with $19.23 per hour a close exact amount.

Is this enough money to live on comfortably?

How much will you make after taxes are taken out?

Keep reading to get the answers to these questions and more.

You will get all the information you need to learn everything you want to know about making 40000 a year, including a sample budget so you can make the decision if this wage will work for your personal situation.

Interested in other job earning scenarios?

Read the series How Much Money Will I Make to get all your questions answered about how to live comfortably on any income, and how to make extra money if you don’t make enough.

Ready to start a budget you’re excited to follow? You don’t want to miss out on these details to make budgeting simple and fun!

40000 a year is how much an hour?

Considering you work 40 hours a week, which is 52 weeks and 2,080 hours, your wage over the year is $19.23 per hour.

If you don’t work 40 hours per week or 52 weeks per year, to calculate this number yourself and make the conversion, you need to know the total hours you work per year.

Once you have this number, divide it by 40,000 to get your hourly wage.

40,000 a year is how much biweekly?

If you are paid biweekly, this means you are not paid monthly or weekly, but instead twice per week.

Assuming you are working exactly 40 hours per week, with a 40,000 annual salary, your paycheck would be about $385 before federal taxes and state and local taxes are deducted.

40,000 a year is how much weekly?

If you make 40,000 per year, your weekly pay, if you are working a 40 hour week, is approximately $625.


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40,000 a year is how much monthly?

If your employer pays you monthly, before taxes you would make an income of $3,333.33.

This is assuming you work 8 hours a day and 40 hours per week.

40000 a year is how much an hour after taxes?

Your $19.23 hourly rate is actually much less considering taxes will be deducted from your take-home paycheck on the 40,000 salary.

Once the required federal, state and local tax is deducted your annual salary will be approximately $33,826.

Where you live makes a difference in taxes

The annual salary after taxes makes a difference depending on where you live.

State taxes vary widely. For example, Colorado taxes are 4.63%, California taxes range between 1% and 12.3%, Georgia taxes range between 1% and 5.75%, Kentucky taxes are 5%.


There are a handful of states that do not charge their resident’s state tax.

The 9 states that are tax-free according to Investopedia include Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.

Is $19.23 a good hourly rate?

If you budget properly, you should be able to support yourself and a small family on $19.23 an hour.

In 2020 a single person without any dependents is considered at the federal poverty level if they make less than $12,760.

This number increases to $26,200 being at the poverty level for a family of 4.

With the cost of living differences in every state, even different cities, these numbers will vary in real life when computing actual living expenses.

For example, it costs much more to live in New York City than a small town in Kansas.

 Is $40k a year a good salary?

This is a fairly subjective question because everyone’s lifestyle and cost of living expenses vary.

If you make 40k a year, you fall into the American middle class.

In most places, earning an annual salary of $40,000 is a respectable wage that can support a family with careful planning and a comfortable but not extravagant lifestyle.

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What if you get a paid vacation with your job that pays 40k a year?

Each example above assumes you work 40 hours weekly for 52 weeks.

Many jobs offer a paid vacation, which means you will actually make more per hour.

The actual hourly wage will vary depending on the overall vacation time, but here are a couple of examples:

If you earn 2 weeks of paid time off per year, your hourly rate would work out to $20 per hour.

If you earn 3 weeks of paid time off per year, your hourly salary would be $20.41 an hour.

How much is a 40,000 a year salary compared to all Americans?

The following map from the government census shows a comparison of states and the median wages.

median household income us census bureau for 40000 a year is how much an hour

What are some jobs that pay an annual salary of $40,000?

There is plenty of work opportunities available for you when you earn $40,000 annual income.

However, you have to be resourceful and you do need a high school diploma in most cases to land one of these jobs.

The following sample list of jobs in this salary range includes the education level that is required before you can start working.

The U.S. Bureau of Labor Statistics is the best starting place for your employment search (and where the following information in the table is taken from.)



Education Requirement

at Entry

Work Description

Legal Support Worker

Associate's Degree

Perform various administrative and clerical tasks for attorneys

Real Estate Appraiser

Bachelor's Degree

Place a value on home's based on market research

Telecommunication Line Installer

High School Diploma

Install, repair and maintain the cables and lines used by network companies

Survey Researcher

Master's Degree

Design surveys and analyze data based on factual data


Bachelor's Degree

Assist organizations in meeting short- and long-term financial goals

Flight Attendant

High School Diploma

Responsible for passengers' safety and taking care of their comfort needs

Physical Therapist Assistant

Associate's Degree

Observe patients before, during, and after physical therapy and make notations about their condition

Property Assessor

Associate's Degree

Determine how properties are used and assign the correct classifications

smart mom hq 40000 annual salary jobs

What if you want to make more money than 40,000 a year?

Start a side gig

Especially with the rise of the internet, there has also been a rise in the availability of side jobs.


  • Take surveys for extra cash
  • Virtual assistant
  • Create videos, websites, or game apps
  • Start a drop-ship business or Amazon store
  • Become a transcriptionist

Invest to earn passive income

Investing your money is one of the best ways to watch it increase over time.

You may not have as much to invest as others with a higher salary.

However, with careful planning and diligence, it is possible to invest a small portion of your income when you make 40,000 a year.

Use your money to make more money for you

Learning how to turn your hard-earned money into more money is the best utilization of your income.

Ways to make your money work for you:

Tips to live on 40,000 a year

illustrated image man and woman on computer with money bags for 40000 a year is how much an hour

To live comfortably on 40,000 a year, there are steps to take that are proactive on your part.

The following tips are the first steps to take so you can live within your means on this income:

  1. Create a budget
  2. Lower your expenses
  3. Start saving money
  4. Get rid of debt

Budget template

The following budget template is a great place to get started with creating your own budget.


Budget Category












Personal Items






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Sample budget on 40,000 a year

The following sample budget shows how a person making $19.23 an hour/$3,333 per month (keep in mind these numbers are for a sample only and they are prior to tax being deducted.)

Plug your own numbers into this template to get an idea of how you can live on this income by allocating money properly in each category.

This example is following the budgeting guidelines of spending 70% of the income on living expenses, 10% on savings, and 20% on the remaining living costs.

For any categories you can spend less than the guideline percentage, it is recommended to add that money into savings.

When you are making your own list, start with each month and move to annual costs. Not all of your bills will happen monthly, as some may be paid quarterly or even one time per year.














Personal Items






smart mom hq sample budget 40000 year salary

Similar wages

How much is $20 an hour annually?

Your annual salary would be $41,600 before taxes. After the tax is deducted, you would take home between $31,900 and $35,000 per year.

You might also be interested in the post on how much 18 dollars an hour is and the budget sample for how to live comfortably on this hourly wage.

$38,000 a year is how much an hour?

Earning $38k a year would give you an hourly rate of approximately $18. This is not the take-home pay since it is not calculated with taxes being deducted.

$41,000 a year is how much an hour?

If your annual salary is $41,000 a year, your hourly rate would be around $19 (before tax.)

How much is $42,000 a year per hour?

Before tax is deducted, 42,000 a year is approximately $20 an hour.

How much is $44,000 a year per hour?

If you make $44,000 a year and the federal, state, and local tax is not taken out, you would make approximately $21 per hour.

How much is $45,000 a year per hour?

Before tax is taken out of your paycheck, a yearly salary of $45k would be in the ballpark of $22 an hour.

What is the opportunity cost of your time?

illustrated image lady standing by clock with desk calendar for 40000 a year is how much an hour

It is important to know how much an hour you are making so you know what your opportunity cost is.

You need this number so you know how much you need to make to improve your situation, in other words, what is your next best alternative.

In this instance, if your salary is 40,000 a year and you work 40 hours a week (2,080 hours per year), your opportunity cost is $19.23 an hour.

If a job comes up where you will make more, you may want to consider putting it on the table for consideration.

There are several ways you can improve your likelihood of accomplishing a higher annual salary.

  • Go to school to get training in a specialization
  • Gain job experience
  • Work hard to earn high evaluations and recommendations in your current position

As you acquire more skills you will be prepared to apply for higher-paying jobs when they are available.

Breakdown recap

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

The above numbers are prior to tax being deducted from your paycheck.

After tax, your annual salary will be between $31,100 and $33,800. The difference depends on your tax bracket and also the state where you live.

Final thoughts

Once you land a job earning 40000 a year, be prepared to make a decision on how you will spend your money.

The first thing to do is build a budget, and your second plan of action is to follow the budget. (Hint: This is where most people trip up their plan and fall behind or fail to build their savings.)

If you continue to develop your job skills, this will just be the start of earning a good income.

You will soon move your way up to the next level.


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