# \$13 an Hour is How Much a Year? Before and After Taxes

With inflation driving up prices, an hourly wage of \$13 may leave some wondering if it’s possible to earn a livable income. In this article, we will break down exactly how much annual pay you can expect at \$13 an hour based on full and part-time schedules. We will calculate gross yearly income along with net salary after taxes. You’ll also learn how unpaid time off impacts actual annual earnings, and whether \$13 per hour provides enough to live on. If you currently make \$13 an hour or hope to someday, read on to see the annual, monthly, biweekly, and weekly pay that \$13 per hour equals before and after taxes. We will look at jobs that typically pay \$13 hourly, examine the impact of inflation, provide tips to increase your pay, and evaluate sample budgets to determine if buying a house or car is realistic. The goal is to give you a complete overview of what \$13 an hour truly means from a financial perspective.

## Convert \$13 Per Hour to Weekly, Monthly, and Yearly Salary

Input your wage and hours per week to see how much you’ll make monthly, yearly and more.

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### \$13 an Hour is How Much a Year?

If you make \$13 an hour, your yearly salary would be \$27,040. We calculate your annual income based on 8 hours per day, 5 days per week and 52 weeks in the year.

Hours worked per week (40) x Hourly wage(\$13) x Weeks worked per year(52) = \$27,040

### \$13 an Hour is How Much a Month?

If you make \$13 an hour, your monthly salary would be \$2,253.33. We calculated this number by dividing your annual income by 12 months.

Hours worked per week (40) x Hourly wage(\$13) x Weeks worked per year(52) / Months per Year(12) = \$2,253.33

### \$13 an Hour is How Much a Biweekly?

If you make \$13 an hour, your biweekly salary would be \$1,040.

Hours worked per week (40) x Hourly wage(\$13) x 2 = \$1,040

### \$13 an Hour is How Much a Week?

If you make \$13 an hour, your weekly salary would be \$520. Calculating based on 5 days per week and 8 hours each day.

Hours worked per week (40) x Hourly wage(\$13) = \$520

### \$13 an Hour is How Much a Day?

If you make \$13 an hour, your daily salary would be \$104. We calculated your daily income based on 8 hours per day.

Hours worked per day (8) x Hourly wage(\$13) = \$104

## \$13 an Hour is How Much a Year?

The basic formula to calculate your annual salary from an hourly wage is:

Hourly Rate x Hours Worked per Week x Number of Weeks Worked per Year = Annual Salary

So for a \$20 per hour job:

\$13 per hour x 40 hours per week x 52 weeks per year = \$27,040

However, this simple calculation makes some assumptions:

• You will work 40 hours every week of the year
• You will not get any paid time off

Therefore, it represents your earnings if you worked every week of the year, without any vacation, holidays, or sick days.

Accounting for Paid Time Off

The \$27,040 base salary does not yet factor in paid time off (PTO). Let’s assume the job provides:

• 2 weeks (10 days) paid vacation
• 6 paid holidays
• 3 paid sick days

This totals 19 paid days off, or nearly 4 weeks of PTO.

Importantly, this paid time off should not be deducted from the annual salary, since you still get paid for those days.

So with 4 weeks PTO, the annual salary would remain \$27,040 .

## Part time \$13 an hour is How Much a Year?

Your annual income changes significantly if you work part-time and not full-time.

For example, let’s say you work 30 hours per week instead of 40. Here’s how you calculate your new yearly total:

\$13 per hour x 30 hours per week x 52 weeks per year = \$20,280

By working 10 fewer hours per week (30 instead of 40), your annual earnings at \$13 an hour drop from \$27,040 to \$20,280.

That’s a \$6,760 per year difference just by working part-time!

Here’s a table summarizing how your annual earnings change depending on how many hours you work per week at \$13 an hour:

Hours Per Week Earnings Per Week Annual Earnings
40 \$520 \$27,040
35 \$455 \$23,660
30 \$390 \$20,280
25 \$325 \$16,900
20 \$260 \$13,520
15 \$195 \$10,140

The more hours per week, the higher your total yearly earnings. But part-time work allows for more life balance if you don’t need the full salary.

## \$13 an Hour With Overtime is How Much a Year?

Now let’s look at how overtime can increase your annual earnings.

Overtime kicks in once you work more than 40 hours in a week. Typically, you earn 1.5x your regular hourly wage for overtime hours.

So if you make \$13 per hour normally, you would make \$19.50 per hour for any hours over 40 in a week.

Here’s an example:

• You work 45 hours in a Week
• 40 regular hours paid at \$13 per hour = \$520
• 5 overtime hours paid at \$19.50 per hour = \$97.50
• Your total one Week earnings =\$520 + \$97.50 = \$617.50

If you worked 45 hours each week for 52 weeks, here’s how your annual earnings increase thanks to overtime pay:

\$617.50 per week x 52 weeks per year = \$32,110

That’s \$5,070 more than you’d earn working just 40 hours per week at \$13 an hour.

Overtime can add up! But also consider taxes and work-life balance when deciding on extra hours.

Here’s a table summarizing how your annual earnings change depending on how many hours you work per week at \$13 an hour:

 Overtime hours per work day Hours Per Week Earnings Per Week Annual Earnings 0 40 \$520 \$27,040 1 45 \$617.50 \$32,110 2 50 \$715 \$37,180 3 55 \$812.50 \$42,250 4 60 \$910 \$47,320 5 65 \$1,007.50 \$52,390 6 70 \$1,105 \$57,460 7 75 \$1,202.50 \$62,530

## How Unpaid Time Off Impacts \$13/Hour Yearly Earnings

So far we’ve assumed you work 52 paid weeks per year. Any unpaid time off will reduce your total income.

For example, let’s say you take 2 weeks of unpaid leave. That brings your paid weeks down to 50:

Hours worked per week (40) x Hourly wage(\$13) x Weeks worked per year(50) = \$26,000 annual salary

With 2 weeks unpaid time off, your annual earnings at \$13/hour would drop by \$1,040.

The table below summarizes how your annual income changes depending on the number of weeks of unpaid leave.

 Weeks of unpaid leave Paid weeks per year Earnings Per Week Annual Earnings 0 52 \$520 \$27,040 1 51 \$520 \$26,520 2 50 \$520 \$26,000 3 49 \$520 \$25,480 4 48 \$520 \$24,960 5 47 \$520 \$24,440 6 46 \$520 \$23,920 7 45 \$520 \$23,400

## Key Takeaways for \$13 Hourly Wage

In summary, here are some key points on annual earnings when making \$13 per hour:

• At 40 hours per week, you’ll earn \$27,040 per year.
• Part-time of 30 hours/week results in \$20,280 annual salary.
• Overtime pay can boost yearly earnings, e.g. \$5,070 extra at 45 hours/week.
• Unpaid time off reduces your total income, around \$1,040 less per 2 weeks off.
• Your specific situation and location impacts taxes and PTO.

Knowing your approximate annual salary and factors impacting it makes it easier to budget and plan your finances. The next step is calculating take-home pay after deductions like taxes.

## \$13 An Hour Is How Much A Year After Taxes

Figuring out your actual annual earnings based on an hourly wage can be complicated once taxes are taken into account. In addition to federal, state, and local income taxes, 7.65% of your gross pay also goes to Social Security and Medicare through FICA payroll taxes. So how much does \$13 an hour equal per year after FICA and income taxes are deducted from your gross pay?

Below we’ll walk through the steps to calculate your annual net take home pay if you make \$13 per hour. This will factor in estimated federal, FICA, state, and local taxes so you know exactly what to expect.

### Factoring in Federal Income Tax

Your federal income tax will be a big chunk out of your gross pay. Federal tax rates range from 10% to 37%, depending on your tax bracket.

To estimate your federal income tax rate and liability:

Look up your federal income tax bracket based on your gross pay.

2023 tax brackets: single filers

Tax rate Taxable income bracket Tax owed
10% \$0 to \$11,000. 10% of taxable income.
12% \$11,001 to \$44,725. \$1,100 plus 12% of the amount over \$11,000.
22% \$44,726 to \$95,375. \$5,147 plus 22% of the amount over \$44,725.
24% \$95,376 to \$182,100. \$16,290 plus 24% of the amount over \$95,375.
32% \$182,101 to \$231,250. \$37,104 plus 32% of the amount over \$182,100.
35% \$231,251 to \$578,125. \$52,832 plus 35% of the amount over \$231,250.
37% \$578,126 or more. \$174,238.25 plus 37% of the amount over \$578,125.

For example, if you are single with \$27,040 gross annual pay, your federal tax bracket is 12%.

Your estimated federal tax would be:

\$1,100 + (\$27,040 – \$11,000) x 12% = \$3,024.80

So at \$13/hour with \$27,040 gross pay, you would owe about \$3,024.80 in federal income taxes.

### Considering State Income Tax

In addition to federal tax, most states also charge a state income tax. State income tax rates range from about 1% to 13%, with most falling between 4% and 6%.

Key Takeaways

• California, Hawaii, New York, New Jersey, and Oregon have some of the highest state income tax rates.
• Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming don’t impose an income tax at all.
• Another 10 U.S states have a flat tax rate—everyone pays the same percentage regardless of how much they earn.

A State-by-State Comparison of Income Tax Rates

STATE TAX RATES LOWEST AND HIGHEST INCOME BRACKETS
Florida 0% None
South Dakota 0% None
Tennessee 0% None
Texas 0% None
Washington 0% None
Wyoming 0% None
Colorado 4.55% Flat rate applies to all incomes
Illinois 4.95% Flat rate applies to all incomes
Indiana 3.23% Flat rate applies to all incomes
Kentucky 5% Flat rate applies to all incomes
Massachusetts 5% Flat rate applies to all incomes
New Hampshire 5% Flat rate on interest and dividend income only
North Carolina 4.99% Flat rate applies to all incomes
Pennsylvania 3.07% Flat rate applies to all incomes
Utah 4.95% Flat rate applies to all incomes
Michigan 4.25% Flat rate applies to all incomes
Arizona 2.59% to 4.5% \$27,806 and \$166,843
Arkansas 2% to 5.5% \$4,300 and \$8,501
California 1% to 13.3% \$9,325 and \$1 million
Connecticut 3% to 6.99% \$10,000 and \$500,000
Delaware 0% to 6.6% \$2,000 and \$60,001
Alabama 2% to 5% \$500 and \$3,001
Georgia 1% to 5.75% \$750 and \$7,001
Hawaii 1.4% to 11% \$2,400 and \$200,000
Idaho 1.125% to 6.5% \$1,568 and \$7,939
Iowa 0.33% to 8.53% \$1,743 and \$78,435
Kansas 3.1% to 5.7% \$15,000 and \$30,000
Louisiana 1.85% to 4.25% \$12,500 and \$50,001
Maine 5.8% to 7.15% \$23,000 and \$54,450
Maryland 2% to 5.75%  \$1,000 and \$250,000
Minnesota 5.35% to 9.85% \$28,080 and \$171,221
Mississippi 0% to 5% \$5,000 and \$10,001
Missouri 1.5% to 5.3% \$1,121 and \$8,968
Montana 1% to 6.75% \$2,900and \$17,400
Nebraska 2.46% to 6.84% \$3,340 and \$32,210
New Jersey 1.4% to 10.75% \$20,000 and \$1 million
New Mexico 1.7% to 5.9% \$5,500 and \$210,000
New York 4% to 10.9% \$8,500 and \$25 million
North Dakota 1.1% to 2.9% \$41,775 and \$458,350
Ohio 0% to 3.99% \$25,000 and \$110,650
Oklahoma 0.25% to 4.75% \$1,000 and \$7,200
Oregon 4.75% to 9.9% \$3,750 and \$125,000
Rhode Island 3.75% to 5.99% \$68,200 and \$155,050
South Carolina 0% to 7% \$3,110 and \$15,560
Vermont 3.35% to 8.75% \$42,150 and \$213,150
Virginia 2% to 5.75% \$3,000 and \$17,001
Washington, D.C. 4% to 9.75% \$10,000 and \$1 million
West Virginia 3% to 6.5% \$10,000 and \$60,000
Wisconsin 3.54% to 7.65% \$12,760 and \$280,950

To estimate your state income tax:

Look up your state income tax rate based on your gross pay and filing status.

Multiply your gross annual pay by the state tax rate.

For example, if you live in Pennsylvania which has a flat 3.07% tax rate, your estimated state tax would be:

\$27,040 gross pay x 3.07% PA tax rate = \$830.13 estimated state income tax

So with \$27,040 gross annual income, you would owe around in \$830.13 Pennsylvania state income tax. Verify your specific state’s income tax rates.

### Factoring in Local Taxes

Some cities and counties levy local income taxes ranging from 1-3% of taxable income.

To estimate potential local taxes you may owe:

• Check if your city or county charges a local income tax.
• If yes, look up the local income tax rate.
• Multiply your gross annual pay by the local tax rate.

For example, say you live in Columbus, OH which has a 2.5% local income tax. Your estimated local tax would be:

\$27,040 gross pay x 2.5% local tax rate = \$676 estimated local tax

So with \$27,040 in gross earnings, you may owe around \$676 in Columbus local income taxes. Verify rates for your own city/county.

### Accounting for FICA Taxes (Social Security & Medicare)

FICA taxes are a combination of Social Security and Medicare taxes that equal 15.3% of your earnings. You are responsible for half of the total bill (7.65%), which includes a 6.2% Social Security tax and 1.45% Medicare tax on your earnings.

In 2023, only the first \$160,200 of your earnings are subject to the Social Security tax

There is an additional 0.9% surtax on top of the standard 1.45% Medicare tax for those who earn over \$200,000 (single filers) or \$250,000 (joint filers).

To estimate your FICA tax payment:

\$27,040 x 6.2% + \$27,040 x 1.45% = \$2,068.56

So you can expect to pay about \$2,068.56 in Social Security and Medicare taxes out of your gross \$27,040 in earnings.

### Total Estimated Tax Payments

Based on the examples above, your total estimated tax payments would be:

Federal tax: \$3,024.80

State tax: \$830.13

Local tax: \$676

FICA tax: \$2,068.56

Total Estimated Tax: \$6,599.49

### Calculating Your Take Home Pay

To calculate your annual take home pay at \$13 /hour:

2. Subtract your estimated total tax payments

\$27,040 gross pay – \$6,599.49 Total Estimated Tax = \$20,440.51 Your Take Home Pay

n summary, if you make \$13 per hour and work full-time, you would take home around \$20,440.51 per year after federal, state, local , FICA taxes.

Your actual net income may vary depending on your specific tax situation. But this gives you a general idea of what to expect.

## Convert \$13 Per Hour to Yearly, Monthly, Biweekly, and Weekly Salary After Taxes

If you make \$13 an hour and work full-time (40 hours per week), your estimated yearly salary would be \$27,040 .

The \$27,040 per year salary does not account for taxes. Federal, state, and local taxes will reduce your take-home pay. The amount withheld depends on your location, filing status, dependents, and other factors.

Just now during our calculation of \$13 An Hour Is How Much A Year After Taxes, we assumed the following conditions:

• You are single with \$27,040 gross annual pay, your federal tax bracket is 12 %.
• You live in Pennsylvania which has a flat 3.07% tax rate
• You live in Columbus, OH which has a 2.5% local income tax.

In the end, we calculated your Total Estimated Tax is \$6,599.49 , Your Take Home Pay is \$20,440.51 , Total tax rate is 24.41%.

So next we’ll use 24.41% as the estimated tax rate to calculate your weekly, biweekly, and monthly after-tax income.

### \$13 Per Hour to Yearly, Monthly, Biweekly, Weekly,and Week Salary After Taxes Table

 Income before taxes Estimated Tax Rate Income Taxes After Tax Income Yearly Salary \$27,040 24.41% \$6,599.49 \$20,440.51 Monthly Salary \$2,253.33 24.41% \$549.96 \$1,703.38 BiWeekly Salary \$1,040 24.41% \$253.83 \$786.17 Weekly Salary \$520 24.41% \$126.91 \$393.09

### \$13  an hour is how much a year after taxes

Here is the adjusted yearly salary after a 24.41% tax reduction:

• Yearly salary before taxes: \$27,040
• Estimated tax rate: 24.41%
• Taxes owed (24.41% * \$27,040 )= \$6,599.49
• Yearly salary after taxes: \$20,440.51
Hourly Wage Hours Worked Per Week Weeks Worked Per Year Total Yearly Salary Estimated Tax Rate Taxes Owed After-Tax Yearly Salary
\$13 40 52 \$27,040 24.41% \$6,599.49 \$20,440.51

### \$13 an hour is how much a month after taxes

To calculate the monthly salary based on an hourly wage, you first need the yearly salary amount. Then divide by 12 months.

• Yearly salary before taxes at \$13 per hour: \$27,040
• Divided by 12 months per year: \$27,040 / 12 = \$2,253.33 per month

The monthly salary based on a 40 hour work week at \$13 per hour is \$2,253.33 before taxes.

After applying the estimated 24.41% tax rate, the monthly after-tax salary would be:

• Monthly before-tax salary: \$2,253.33
• Estimated tax rate: 24.41%
• Taxes owed (24.41% * \$2,253.33 )= \$549.96
• Monthly after-tax salary: \$1,703.38

Monthly Salary Based on \$13 Per Hour

Hourly Wage Yearly Salary Months Per Year Before-Tax Monthly Salary Estimated Tax Rate Taxes Owed After-Tax Monthly Salary
\$13 \$27,040 12 \$2,253.33 24.41% \$549.96 \$1,703.38

### \$13 an hour is how much biweekly after taxes

Many people are paid biweekly, meaning every other week. To calculate the biweekly pay at \$13 per hour:

• Hourly wage: \$13
• Hours worked per week: 40
• Weeks per biweekly pay period: 2
• \$13 * 40 hours * 2 weeks = \$1,040 biweekly

Applying the 24.41%estimated tax rate:

• Biweekly before-tax salary: \$1,040
• Estimated tax rate: 24.41%
• Taxes owed (24.41% * \$1,040 )= \$253.83
• Biweekly after-tax salary: \$786.17

Biweekly Salary at \$13 Per Hour

Hourly Wage Hours Worked Per Week Weeks Per Pay Period Before-Tax Biweekly Salary Estimated Tax Rate Taxes Owed After-Tax Biweekly Salary
\$13 40 2 \$1,040 24.41% \$253.83 \$786.17

### \$13 an hour is how much weekly after taxes

To find the weekly salary based on an hourly wage, you need to know the number of hours worked per week. At 40 hours per week, the calculation is:

• Hourly wage: \$13
• Hours worked per week: 40
• \$13 * 40 hours = \$520 per week

Accounting for the estimated 24.41% tax rate:

• Weekly before-tax salary: \$520
• Estimated tax rate: 24.41%
• Taxes owed (24.41% * \$520 )= \$126.91
• Weekly after-tax salary: \$393.09

Weekly Salary at \$13 Per Hour

Hourly Wage Hours Worked Per Week Before-Tax Weekly Salary Estimated Tax Rate Taxes Owed After-Tax Weekly Salary
\$13 40 \$520 24.41% \$126.91 \$393.09

### Key Takeaways

• An hourly wage of \$13 per hour equals a yearly salary of \$27,040 before taxes, assuming a 40 hour work week.
• After accounting for an estimated 24.41% tax rate, the yearly after-tax salary is approximately \$20,440.51 .
• On a monthly basis before taxes, \$13 per hour equals \$2,253.33 per month. After estimated taxes, the monthly take-home pay is about \$1,703.38 .
• The before-tax weekly salary at \$13 per hour is \$520 . After taxes, the weekly take-home pay is approximately \$393.09 .
• For biweekly pay, the pre-tax salary at \$13 per hour is \$1,040 . After estimated taxes, the biweekly take-home pay is around \$786.17 .

Understanding annual, monthly, weekly, and biweekly salary equivalents based on an hourly wage is useful when budgeting and financial planning. Taxes make a significant difference in take-home pay, so be sure to account for them when making income conversions. Use this guide as a reference when making salary calculations.

## What Is the Average Hourly Wage in the US?

Last Updated: Sep 1 2023

US Average Hourly Earnings is at a current level of \$33.82, up from 33.74 last month and up from 32.43 one year ago. This is a change of 0.24% from last month and 4.29% from one year ago.

Average Hourly Earnings is the average dollars that a private employee makes per hour in the US. This metric is a part of one of the most important releases every month which includes unemployment numbers as well. This is normally released on the first Friday of every month. This metric is released by the Bureau of Labor Statistics (BLS).

## What is the average salary in the U.S.?

Last Updated: July 18, 2023

The U.S. Bureau of Labor Statistics uses median salary data rather than averages to avoid skewed numbers from outlying high and low numbers. Median weekly earnings of the nation's 121.5 million full-time wage and salary workers were \$1,100 in the second quarter of 2023, the U.S.

If a person works 52 weeks in the year, then this represents a national annual salary of \$57,200.

## Is \$13 an Hour a Good Salary?

Whether \$13 an hour represents a good salary really depends on your individual circumstances. Compared to the federal minimum wage of \$7.25, \$13 an hour is almost 80% higher. However, on an annual basis, \$13 an hour equates to an income of only \$27,040 per year, assuming a full-time 40 hour work week.

That’s well below the median household income in the United States, which is around \$67,000 according to the latest data from the U.S. Census Bureau. Relative to the overall population, an income of \$27,000 would put you in the bottom 40% of earners nationally.

However, the cost of living can vary tremendously depending on which state and metropolitan area you live in. \$27,000 might go a lot further in a smaller town in the Midwest compared to an expensive coastal city, for example. So the purchasing power of \$13 an hour hinges heavily on geographic location.

Most budgeting experts recommend limiting your housing costs to 30% or less of your total income. At \$13 an hour, that means your rent or mortgage payment ideally should be under \$675 per month to remain affordable. In many parts of the country, finding decent housing at that price point can be very challenging.

Overall, while \$13 an hour is certainly better than minimum wage, it’s quite low compared to median earnings and may make it difficult to afford market-rate housing in many cities. Supporting a family on \$13 an hour would be extremely difficult for most workers.

## Jobs that Pay \$13 Per Hour

Certain industries and occupations are more likely to offer hourly pay around the \$13 level. Here are some of the most common jobs that typically pay \$13 per hour:

• Retail salespersons and cashiers
• Food service and restaurant workers
• Childcare workers and teaching assistants
• Home health aides and personal care aides
• Hotel desk clerks and housekeepers
• Nursing assistants
• Security guards
• Janitors and cleaners
• Construction laborers
• Telemarketers
• Package handlers and truck loaders
• Farm workers and agricultural laborers

Most of these occupations do not require extensive education or training beyond a high school diploma or GED certification. They generally involve customer service, manual tasks, or support roles within a larger organization.

Besides the restaurant and retail sectors, health care and social assistance agencies employ large numbers of lower-wage workers like nursing assistants, orderlies, and psychiatric aides. Many of these jobs pay at or near the \$13 per hour level.

It’s much less common for professional roles or jobs requiring a 4-year college degree to offer hourly salaries in the \$13 range. Pay for those positions tends to start above \$15 per hour and can go significantly higher.

## Can You Live Off \$13 An Hour?

Whether or not it’s feasible to live on \$13 an hour depends on your individual and family circumstances.

For a single adult with no children, \$13 an hour may provide a basic standard of living, assuming you’re budget-conscious and live in an area with a relatively low cost of living. However, you’ll need to make tradeoffs like having roommates, using public transit, and foregoing expensive discretionary purchases. establishing an emergency fund or saving for retirement would also be very difficult at this wage level.

The challenges multiply for single-parent households or families trying to subsist on \$13 per hour. Paying for childcare alone on this budget would be nearly impossible for many working parents. Saving for a child’s education or providing extras like sports, music lessons and summer camps would require major financial sacrifices.

To determine whether \$13 an hour is livable, experts recommend that your housing costs stay under 30% of your gross income. At \$13 per hour, that means keeping your rent or mortgage under \$650 a month. You should also limit transportation costs to 15% or less of your pre-tax income. That works out to around \$300 monthly for a car payment, insurance, gas and repairs if you’re earning \$13 an hour.

The remaining \$715 per month in a \$13 an hour full-time budget would have to cover all other expenses including food, healthcare, clothing, utilities, debt payments, entertainment and more. Saving for retirement or emergencies would be extremely difficult at this earnings level.

While everyone’s spending habits differ, most Americans would find it quite difficult to maintain their normal lifestyle on \$13 an hour. Careful budgeting, frugal living, and utilization of public assistance programs can help lower-wage workers survive under financial constraints. But it requires sacrifices that many may find untenable long-term.

## The Impact of Inflation on the Value of \$13 An Hour

Inflation steadily erodes the purchasing power of your paycheck over time. While \$13 an hour provided more substantial earnings years ago, its real value has diminished considerably.

To illustrate, let’s examine how inflation has affected the actual buying power of \$13 per hour over the past couple decades:

• In 1990, \$13 an hour was equivalent to roughly \$27 hourly in today’s money after adjusting for inflation – nearly double its current purchasing power.
• By 2000, the inflation-adjusted value of \$13 an hour had fallen to about \$21 in today’s dollars.
• In 2010, \$13 an hour had the buying power of around \$16.50 per hour now.
• And today, despite nominal wage growth, \$13 an hour will only buy you what \$13 bought back in 2010.

This steady decline results from the fact that inflation has outpaced wage growth for many lower and middle-income workers.

Between 2000 and 2020, the Consumer Price Index rose by over 50% while average hourly earnings for non-supervisory workers increased by less than 40% after inflation. Thus the real value of wages has failed to keep up with the actual cost of living for everyday Americans.

Unless hourly pay rates begin rising faster than the inflation rate, the value of \$13 per hour will continue dwindling over the next decade, making it even harder for low wage workers to maintain their standard of living.

## 5 Ways To Increase Your Hourly Wage

For employees stuck earning \$13 per hour or less, merely waiting for inflation-matching wage hikes is unlikely to be sufficient. By taking proactive measures, workers can improve their skills and value to open up better paying job opportunities. Here are 5 impactful steps you can take:

• Get job-relevant education and vocational training – Increase your human capital and skills through certificate programs, online courses, apprenticeships, or associates degrees to qualify for higher pay in growing fields. Many community colleges and trade schools offer affordable and flexible options.
• Ask for a raise and highlight your contributions – Don’t assume your hard work is going unnoticed. Make the case to management that you deserve higher compensation based on the value you deliver. Come armed with market salary data.
• Apply for promotions within your company – Moving up the ladder to supervisory or management roles is a time-tested way to earn more. Obtain the necessary experience and training to put yourself in contention.
• Find a higher paying employer – Sometimes the best way to substantially boost your pay is to change companies, particularly if you’ve taken steps to increase your skill set and marketability.
• Develop specialized skills – Obtain expertise in high-demand technical areas like software development, technical writing, data analysis, drafting, equipment repair. Specialists earn premium pay.

Persistence and dedication to professional growth are key to overcoming the downward pressure on real wages caused by inflation. Target opportunities that reduce your dependence on low hourly pay.

## Buying a Car on \$13 Per Hour

For many Americans, car ownership is critical for accessing jobs and conducting their daily lives. But buying and owning a vehicle can be tricky on an hourly salary of just \$13.

The first consideration is whether you can actually afford car payments alongside other financial obligations. As noted earlier, experts recommend limiting transportation costs to 15% or less of your pre-tax income when money is tight.

For someone working 40 hours at \$13 per hour, that translates to a budget of around \$300 per month for your car payment, gas, insurance, registration fees, repairs and maintenance.

New cars are mostly out of reach on this budget – the average new car loan payment was nearly \$600 per month in 2020. Even a very basic new economy car with zero down payment would likely exceed \$300 per month.

Buying used is smarter financially, though options are still somewhat limited. With \$300 per month to work with, you’d likely be looking at older used compact sedans or hatchbacks in the 5-10 year old range with over 100k miles. Mainstream brands like Honda, Toyota, Hyundai and Kia offer affordable, reliable models that fit the budget when shopping pre-owned.

Obtaining financing on an older used car often requires a decent down payment. Try to put aside \$2,000 or more if possible before heading to dealers – used car loan rates for buyers with lower credit scores can run 10% or higher.

Ongoing maintenance and insurance costs on an older vehicle may add up quicker than expected. Try to find a car with service records to confirm it’s been properly maintained. Keep insurance basic with liability and minimum required coverages to control premiums.

While buying a car on \$13 per hour requires careful shopping and budgeting, decent used models are attainable with proper planning and expectations. Just be sure to run the numbers thoroughly.

## Can You Buy a House on \$13 An Hour?

In most housing markets today, buying a home while earning \$13 an hour would be extremely difficult, if not impossible, for many buyers.

As a rough rule of thumb, you can typically afford a house that’s around 2-3 times your annual income. So at \$13 per hour, or \$27,000 per year, your maximum budget would be \$54,000 to \$81,000. Even in lower cost areas, finding livable housing at that price point is an enormous challenge.

In terms of monthly payments, budgeting guides indicate you should limit housing expenses to under 30% of your pre-tax income. At \$13 an hour, that’s around \$650 per month max.

When you factor in taxes, insurance, utilities and maintenance costs, even a modest mortgage of \$650 per month would be financially out of reach for households surviving on \$13 an hour.

You would almost certainly need assistance for a down payment as well – traditional 20% down payments equate to \$16,200 on a \$81,000 home, well above what most \$13 per hour workers can save.

While special low down payment programs like FHA loans and USDA loans exist, the income requirements remain prohibitive at this wage level in most jurisdictions. Debt-to-income ratios allowed on these loans are typically around 43-46%. But maxing out your DTI that high results in severe payment burdens.

In high-cost cities with surging real estate values, earning \$13 an hour essentially precludes any chance of homeownership without substantial financial help. Even in more affordable markets, it requires stellar credit and extreme discipline to buy on such low wages.

Renting remains the only viable path forward for homeownership for \$13 per hour employees in the vast majority of markets. Boosting one’s income profile through education and career growth can help make owning an achievable reality down the road.

## Example Budget for \$13 Per Hour

Constructing a monthly budget can help give a clear sense of whether it’s realistic to live on \$13 an hour long-term. Here is an example budget for a single person earning \$13 per hour and working 40 hours per week in an average cost of living metro area:

Gross Monthly Income

• \$13 per hour x 40 hours per week x 4 weeks = \$2,240

Expenses

• Rent – \$600 (studio apartment with roommates)
• Utilities – \$150
• Groceries – \$240 (\$8 per day)
• Car payment – \$150 (for used compact sedan)
• Car insurance – \$100
• Gas – \$80
• Cell phone – \$40
• Internet access – \$20 (split with roommates)
• Health insurance – \$150 (ACA exchange plan after subsidy)
• Entertainment – \$50
• Dining out – \$40 per month
• Emergency fund savings – \$50

Total Expenses = \$1,670

Remaining Income After Expenses = \$570

This leaves just \$570 per month that could be put toward other periodic expenses like clothing, gifts, medical copays, car repairs, etc. There would also be little room for building any meaningful retirement savings or other financial goals.

As shown in this budget, it’s very possible to survive on \$13 an hour as a single, childless adult with minimal expenses. But there is little margin for unexpected costs and long-term saving is severely limited. Any emergency could quickly lead to serious financial setbacks.

This budget would be nearly impossible for a single parent to manage without substantial assistance through childcare subsidies, food stamps, Medicaid and other aid programs. Overall, living solely on \$13 an hour income long-term entails making major sacrifices and life simplifications.

## In Summary

While higher than the minimum wage, attempting to live on \$13 an hour wage comes with plenty of challenges and constraints. Housing, transportation, and saving for retirement and emergencies all become major burdens at this earning level.

Inflation steadily eats away at \$13 per hour’s buying power over time, meaning your actual standard of living slowly declines each year. Opportunities for budget-friendly home ownership and car buying are limited on this income as well.

Boosting your earnings above \$13 per hour through education, training, and career moves should be a priority for long-term financial stability. Supplementing wages with government assistance can also help lower-paid workers cover basic living expenses. But ultimately, systematic measures to grow incomes for the bottom 40% of workers remain critical for expanding prosperity.

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