top of page

How much do I really make?

Breakdown my dollars!

When I got my first job, I knew exactly how much I made an hour because they offered me \$4.00 an hour. (I'm old!) When you are paid a salary, you may forget what you make for an hour of work. Why is that important?

Have you ever thought about translating a purchase into the time it took you to earn enough to pay for it?

Here's a simple way to look at it using round numbers. Divide your salary by 2,000 hours. If you make \$60,000, you are making roughly \$30 an hour.

If your taxes and benefits are 30% of your paycheck, then your \$30 an hour translates into bringing home \$21 an hour with \$9 an hour paying your taxes and benefits, like health insurance. [I am using 30% as an estimate of taxes and benefits. This varies. To calculate your personal take home percentage, divide your take home pay (net wages) by your gross wages.]

 Salary Hourly rate Taxes & fringe benefits per hour Take home pay per hour \$45,000 \$22.50 \$6.75 \$15.75 \$60,000 \$30.00 \$9.00 \$21.00 \$75,000 \$37.50 \$11.25 \$26.25

Now that you know one way to calculate what you make an hour, how can you use that information?

Making your dollars work for you.

Suppose you are considering buying a new pair of boots. If those boots cost \$105 and you made \$60k a year, how does it feel to know that you worked five hours to pay for the boots? If the boots cost \$210, how does it feel to know that you worked ten hours to pay for them?

The thing is, only you can answer the question. For some folks, that's a bargain. For others, the translation into hours of work makes the boots too expensive.