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When you’re applying for a new job, one of the most important factors to consider is how much the job pays. It’s no surprise that most people look for jobs with the hope of earning the best salary available to them.
But when you’re reading job postings, it can be confusing to compare opportunities when some share an hourly wage while others list an annual salary. If you’re applying for a job that pays $60,000 per year, you probably want to know how much that is per hour. Unfortunately, the answer is a bit more complicated than you might thing.
The Short Version
- An annual salary of $60,000 breaks down to an hourly wage of $28.75, based on the federal government’s work year of 2,087 hours.
- Your hourly wage depends on the number of hours you worked to earn your $60,000 — part-time workers or employees who take paid vacation will earn a higher hourly wage.
- $60,000 a year won’t amount to as much on your paychecks since you will have money removed for federal income taxes, FICA taxes, and state income taxes.
- Currently, $60,000 per year is slightly higher than the national average salary — but that may not be enough to live comfortably in cities with a higher cost of living.
- You can increase your hourly wage with passive income opportunities like stock or real estate investing.
$60,000 a Year Is How Much an Hour?
The simplest way to calculate the hourly wage of $60,000 per year is to divide the total annual pay by the number of hours in a work year. When calculating hourly wages, the federal government uses a work year of 2,087 hours. Based on that figure, the hourly wage for a job that pays $60,000 per year is $28.75 per hour.
Here’s exactly how that $60,000 per year breaks down:
- $28.75 per hour
- $230 per day (assuming an eight-hour work day)
- $1,150 per week
- $2,300 every two weeks
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Factors That Affect the Hourly Wage of $60,000 a Year
Of course, your actual hourly wage depends on far more than your annual salary. In the section above, we calculated the hourly wage of $60,000 based on the federal government’s standard work year of 2,087 hours. But your hourly wage could be higher or lower depending on a few different factors.
The Number of Hours You Work
If you’re a part-time worker earning $60,000 per year, your hourly wage would be considerably higher than a full-time worker earning the same amount. Suppose you only work 30 hours per week. If you work 52 weeks per year, your hourly wage comes out to about $38.46 per hour.
On the other hand, if you work more than a standard work week, your hourly wage would be lower. Many salaried employees find themselves working closer to 50 hours per week, without additional overtime pay. If we again assume you work 52 weeks per year, your hourly wage is only $23.08 per hour.
Your hourly wage also depends on the amount of vacation time you get at your job. If you’re a full-time employee, you probably (or hopefully) get some vacation time from your job.
However, many part-time hourly employees don’t get vacation time. Your hourly wage increases with the number of paid vacation days you get since you’re working fewer days to earn your $60,000 per year salary. The same rule of thumb applies to paid holidays — the more paid holidays you get, the higher your hourly wage.
The table below shows the hourly wage for an employee earning $60,000 per year based on different numbers of paid time off days. These numbers assume the federal government’s standard 2,087-hour work year and eight-hour work days.
|Paid Days Off
What Is $60,000 a Year After Taxes?
Just because you earn a salary of $60,000 doesn’t mean that’s the amount you’ll see on your paychecks. Because of income and payroll taxes, your actual take-home pay will be lower. Just how much lower it will be depends on the state in which you live.
The federal income tax brackets range from 10% to 37%. An annual income of $60,000 falls into the 22% tax bracket. That being said, your actual taxable income would be lower with tax deductions. Additionally, because we have marginal tax brackets in the U.S., only a portion of your income is taxed at the rate for the highest tax bracket you fall into. On top of this, you’ll pay a FICA tax rate of 7.65% (6.2% for Social Security and 1.45% for Medicare).
The amount you’ll pay in taxes also depends on which state you live in. A handful of states have no income taxes at all and some have flat income taxes. However, most states have marginal tax brackets like the federal government. The highest marginal tax brackets range from 2.9% in North Dakota to 13.3% in California.
Someone earning an income of $60,000 in Fargo, North Dakota would pay an estimated $10,778 in federal income and FICA taxes and roughly $591 in state income taxes. Someone living in Los Angeles would pay the same federal tax amount but would pay an estimated $2,204 in state income taxes.
Your after-tax income depends on other factors as well, including whether you contribute to a 401(k) or IRA, whether a part of your income goes to pay for health insurance premiums, whether you can itemize deductions, and more. The more you can deduct on your taxes, the higher your after-tax income will be.
Is $60,000 a Year a Good Salary?
According to the Bureau of Labor Statistics (BLS), the latest earnings data available shows the median annual salary in the U.S. is $28.01 per hour, with an annual mean wage of $58,260 per year. As you can see, a $60,000 salary is just slightly over the national average.
But whether $60,000 per year is a good salary really depends on where you live. Kalamazoo, Michigan has one of the lowest costs of living in the U.S. — it’s about 24% below the national average. Someone could easily live in Kalamazoo on a salary of $60,000.
But in a more expensive city, $60,000 per year might be more difficult to swing. For example, according to the PayScale cost of living calculator, someone earning $60,000 in Kalamazoo would need to earn more than $202,000 to maintain the same standard of living in New York City, where the cost of living is 155% higher than the national average.
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How to Increase Your Hourly Wage
One of the best ways to increase your hourly wage is by asking for and receiving a raise at your main place of employment. But if that’s not possible at this time, you can also try your hand at earning passive income.
Passive income isn’t based on the number of hours you work. After putting in a bit of effort or money upfront, you can earn income that isn’t tied to your time.
One of the best ways to earn passive income is to start investing in stocks and bonds that send regular dividend or interest payouts. You’ll also benefit from capital appreciation over time, which allows you to sell assets for a profit in the future.
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Another way to earn passive income is by investing in real estate. There are many ways to do this, including by owning your own rental property or by investing in real estate investment trusts (REITs). And just like with stocks, real estate investors can earn a profit from capital appreciation.
Other passive income ideas include:
- Selling a digital product
- Affiliate marketing
- Peer-to-peer lending
- Renting out your car or home
- Setting up a dropshipping business
The Bottom Line
A salary of $60,000 comes out to an hourly wage of about $28.75, but there’s a lot more that goes into it.
Your actual salary will depend on the number of hours you work. And the amount you’ll actually get on your paychecks depends on where you live and the number of tax deductions you can claim.
The good news is there are plenty of ways to increase your hourly wage using passive income, which doesn’t require you to trade your time for money.
More salary basics: