# \$45 an Hour is How Much a Year? Before and After Taxes

With the cost of living on the rise, an hourly wage of \$45 may sound like a lofty pay rate. But what does \$45 an hour really amount to in terms of annual earnings? Converting an hourly wage to a salaried income is key for understanding your total pay and purchasing power.

This article will break down exactly what \$45 per hour equals out to on a weekly, monthly, and yearly basis. We’ll look at how full-time and part-time annual salaries compare at this hourly rate. Additionally, we’ll calculate how overtime pay can increase your total annual earnings if you make \$45 an hour.

To provide a full overview, we’ll also explore the take-home pay you’d earn annually after tax deductions on \$45 an hour. You’ll find out if this hourly wage provides a comfortable living today and what type of lifestyle it can afford. Whether \$45 per hour is your current pay or your target wage, this article outlines what you can expect to take home annually at that rate.

## Convert \$45 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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### \$45 an Hour is How Much a Year?

If you make \$45 an hour, your yearly salary would be \$93,600. 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(\$45) x Weeks worked per year(52) = \$93,600

### \$45 an Hour is How Much a Month?

If you make \$45 an hour, your monthly salary would be \$7,800. We calculated this number by dividing your annual income by 12 months.

Hours worked per week (40) x Hourly wage(\$45) x Weeks worked per year(52) / Months per Year(12) = \$7,800

### \$45 an Hour is How Much a Biweekly?

If you make \$45 an hour, your biweekly salary would be \$3,600.

Hours worked per week (40) x Hourly wage(\$45) x 2 = \$3,600

### \$45 an Hour is How Much a Week?

If you make \$45 an hour, your weekly salary would be \$1,800. Calculating based on 5 days per week and 8 hours each day.

Hours worked per week (40) x Hourly wage(\$45) = \$1,800

### \$45 an Hour is How Much a Day?

If you make \$45 an hour, your daily salary would be \$360. We calculated your daily income based on 8 hours per day.

Hours worked per day (8) x Hourly wage(\$45) = \$360

## \$45 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:

\$45 per hour x 40 hours per week x 52 weeks per year = \$93,600

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 \$93,600 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 \$93,600 .

## Part time \$45 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 25 hours per week instead of 40. Here’s how you calculate your new yearly total:

\$45 per hour x 25 hours per week x 52 weeks per year = \$58,500

By working 15 fewer hours per week (25 instead of 40), your annual earnings at \$45 an hour drop from \$93,600 to \$58,500.

That’s a \$35,100 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 \$45 an hour:

Hours Per Week Earnings Per Week Annual Earnings
40 \$1,800 \$93,600
35 \$1,575 \$81,900
30 \$1,350 \$70,200
25 \$1,125 \$58,500
20 \$900 \$46,800
15 \$675 \$35,100

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.

## \$45 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 \$45 per hour normally, you would make \$67.50 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 \$45 per hour = \$1,800
• 5 overtime hours paid at \$67.50 per hour = \$337.50
• Your total one Week earnings =\$1,800 + \$337.50 = \$2,137.50

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

\$2,137.50 per week x 52 weeks per year = \$111,150

That’s \$17,550 more than you’d earn working just 40 hours per week at \$45 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 \$45 an hour:

 Overtime hours per work day Hours Per Week Earnings Per Week Annual Earnings 0 40 \$1,800 \$93,600 1 45 \$2,137.50 \$111,150 2 50 \$2,475 \$128,700 3 55 \$2,812.50 \$146,250 4 60 \$3,150 \$163,800 5 65 \$3,487.50 \$181,350 6 70 \$3,825 \$198,900 7 75 \$4,162.50 \$216,450

## How Unpaid Time Off Impacts \$45/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(\$45) x Weeks worked per year(50) = \$90,000 annual salary

With 2 weeks unpaid time off, your annual earnings at \$45/hour would drop by \$3,600.

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 \$1,800 \$93,600 1 51 \$1,800 \$91,800 2 50 \$1,800 \$90,000 3 49 \$1,800 \$88,200 4 48 \$1,800 \$86,400 5 47 \$1,800 \$84,600 6 46 \$1,800 \$82,800 7 45 \$1,800 \$81,000

## Key Takeaways for \$45 Hourly Wage

In summary, here are some key points on annual earnings when making \$45 per hour:

• At 40 hours per week, you’ll earn \$93,600 per year.
• Part-time of 30 hours/week results in \$70,200 annual salary.
• Overtime pay can boost yearly earnings, e.g. \$17,550 extra at 45 hours/week.
• Unpaid time off reduces your total income, around \$3,600 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.

## \$45 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 \$45 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 \$45 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 \$93,600 gross annual pay, your federal tax bracket is 22%.

Your estimated federal tax would be:

\$5,147 + (\$93,600 – \$44,726) x 22% = \$15,899.28

So at \$45/hour with \$93,600 gross pay, you would owe about \$15,899.28 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:

\$93,600 gross pay x 3.07% PA tax rate = \$2,873.52 estimated state income tax

So with \$93,600 gross annual income, you would owe around in \$2,873.52 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:

\$93,600 gross pay x 2.5% local tax rate = \$2,340 estimated local tax

So with \$93,600 in gross earnings, you may owe around \$2,340 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:

\$93,600 x 6.2% + \$93,600 x 1.45% = \$7,160.40

So you can expect to pay about \$7,160.40 in Social Security and Medicare taxes out of your gross \$93,600 in earnings.

### Total Estimated Tax Payments

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

Federal tax: \$15,899.28

State tax: \$2,873.52

Local tax: \$2,340

FICA tax: \$7,160.40

Total Estimated Tax: \$28,273.20

### Calculating Your Take Home Pay

To calculate your annual take home pay at \$45 /hour:

2. Subtract your estimated total tax payments

\$93,600 gross pay – \$28,273.20 Total Estimated Tax = \$65,326.80 Your Take Home Pay

n summary, if you make \$45 per hour and work full-time, you would take home around \$65,326.80 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 \$45 Per Hour to Yearly, Monthly, Biweekly, and Weekly Salary After Taxes

If you make \$45 an hour and work full-time (40 hours per week), your estimated yearly salary would be \$93,600 .

The \$93,600 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 \$45 An Hour Is How Much A Year After Taxes, we assumed the following conditions:

• You are single with \$93,600 gross annual pay, your federal tax bracket is 22 %.
• 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 \$28,273.20 , Your Take Home Pay is \$65,326.80 , Total tax rate is 30.21%.

So next we’ll use 30.21% as the estimated tax rate to calculate your weekly, biweekly, and monthly after-tax income.

### \$45 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 \$93,600 30.21% \$28,273.20 \$65,326.80 Monthly Salary \$7,800 30.21% \$2,356.10 \$5,443.90 BiWeekly Salary \$3,600 30.21% \$1,087.43 \$2,512.57 Weekly Salary \$1,800 30.21% \$543.72 \$1,256.28

### \$45  an hour is how much a year after taxes

Here is the adjusted yearly salary after a 30.21% tax reduction:

• Yearly salary before taxes: \$93,600
• Estimated tax rate: 30.21%
• Taxes owed (30.21% * \$93,600 )= \$28,273.20
• Yearly salary after taxes: \$65,326.80
Hourly Wage Hours Worked Per Week Weeks Worked Per Year Total Yearly Salary Estimated Tax Rate Taxes Owed After-Tax Yearly Salary
\$45 40 52 \$93,600 30.21% \$28,273.20 \$65,326.80

### \$45 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 \$45 per hour: \$93,600
• Divided by 12 months per year: \$93,600 / 12 = \$7,800 per month

The monthly salary based on a 40 hour work week at \$45 per hour is \$7,800 before taxes.

After applying the estimated 30.21% tax rate, the monthly after-tax salary would be:

• Monthly before-tax salary: \$7,800
• Estimated tax rate: 30.21%
• Taxes owed (30.21% * \$7,800 )= \$2,356.10
• Monthly after-tax salary: \$5,443.90

Monthly Salary Based on \$45 Per Hour

Hourly Wage Yearly Salary Months Per Year Before-Tax Monthly Salary Estimated Tax Rate Taxes Owed After-Tax Monthly Salary
\$45 \$93,600 12 \$7,800 30.21% \$2,356.10 \$5,443.90

### \$45 an hour is how much biweekly after taxes

Many people are paid biweekly, meaning every other week. To calculate the biweekly pay at \$45 per hour:

• Hourly wage: \$45
• Hours worked per week: 40
• Weeks per biweekly pay period: 2
• \$45 * 40 hours * 2 weeks = \$3,600 biweekly

Applying the 30.21%estimated tax rate:

• Biweekly before-tax salary: \$3,600
• Estimated tax rate: 30.21%
• Taxes owed (30.21% * \$3,600 )= \$1,087.43
• Biweekly after-tax salary: \$2,512.57

Biweekly Salary at \$45 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
\$45 40 2 \$3,600 30.21% \$1,087.43 \$2,512.57

### \$45 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: \$45
• Hours worked per week: 40
• \$45 * 40 hours = \$1,800 per week

Accounting for the estimated 30.21% tax rate:

• Weekly before-tax salary: \$1,800
• Estimated tax rate: 30.21%
• Taxes owed (30.21% * \$1,800 )= \$543.72
• Weekly after-tax salary: \$1,256.28

Weekly Salary at \$45 Per Hour

Hourly Wage Hours Worked Per Week Before-Tax Weekly Salary Estimated Tax Rate Taxes Owed After-Tax Weekly Salary
\$45 40 \$1,800 30.21% \$543.72 \$1,256.28

### Key Takeaways

• An hourly wage of \$45 per hour equals a yearly salary of \$93,600 before taxes, assuming a 40 hour work week.
• After accounting for an estimated 30.21% tax rate, the yearly after-tax salary is approximately \$65,326.80 .
• On a monthly basis before taxes, \$45 per hour equals \$7,800 per month. After estimated taxes, the monthly take-home pay is about \$5,443.90 .
• The before-tax weekly salary at \$45 per hour is \$1,800 . After taxes, the weekly take-home pay is approximately \$1,256.28 .
• For biweekly pay, the pre-tax salary at \$45 per hour is \$3,600 . After estimated taxes, the biweekly take-home pay is around \$2,512.57 .

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 \$45 an Hour a Good Salary?

Whether \$45/hour is a good wage depends on your location, expenses, and career field. For example, \$45/hour is around \$93,600 annually if working 40 hours per week for 52 weeks. The 2022 median personal income in the U.S. was \$41,535, so \$45/hour would be more than double the median income. However, some high cost-of-living areas like New York City or San Francisco require higher incomes to live comfortably. Overall, \$45/hour is a well-above-average wage but may not go far in major metro areas. The key is budgeting properly and living below your means.

## Jobs that pay \$45 an hour

Here are some examples of jobs that can pay around \$45 per hour:

• Registered Nurse – The average RN makes \$35-\$45/hr depending on specialty and location. Years of experience also impact pay.
• Software Developer – The average software developer makes \$40-\$55/hr depending on skills, experience and location. Certain languages like Java or Python tend to pay on the higher end.
• Accountant – CPAs or accountants with specialized credentials can make \$40-\$60/hr once established in their career. Public accountants tend to earn less than those in corporate/private roles.
• Electrician – Licensed and experienced electricians can make \$40-\$55/hr. Union and government roles also pay on the higher end.
• Plumber – Like electricians, experienced plumbers can earn \$40-\$55/hr, more if self-employed.

-Project Manager – IT or construction project managers with 5+ years experience can earn \$45-\$65/hr. Agile or technical PMs tend to pay more.

• Freelance Consultant – With expertise in a field like IT, marketing, HR, finance or strategy, consultants can charge \$50-\$150/hr or more.

## Can You Live Off \$45 An Hour?

Living solely on \$45 an hour is possible depending on your lifestyle and where you live. The average one-bedroom apartment rent is around \$1,500 in the U.S., which would cost roughly half of your take-home pay. However, rents in cities like NYC, San Francisco and LA are over \$3,000 for one bedroom on average. Other factors impacting liveability on \$45/hour:

• Higher cost cities like NYC or San Francisco will require roomates or very careful budgeting.
• Family size – Single vs married with kids
• Existing Savings/Investments/Debt
• Transportation – Car payment or public transit costs
• 401K Contributions/Retirement Savings Goals
• Food, Entertainment, Childcare and other Variable Costs

Overall, \$45/hour is a livable wage for singles or dual-income couples in average-cost areas. Those in high-cost cities may need to downsize, get roommates or reduce savings goals temporarily. Consistent budgeting and smart financial choices make \$45/hour very livable.

## The impact of inflation on the value of \$45 an hour

Inflation has a large impact on the real value of hourly wages like \$45/hour over time. For example, inflation averaged roughly 3.2% annually from 2012 to 2022. This means the value of \$45/hour has decreased by over 25% in the past decade.

If this inflation rate continues, \$45/hour today will only have the same purchasing power as around \$34/hour in another 10 years. The cost of housing, vehicles, food, entertainment and other expenses become more expensive over time with inflation.

To maintain the value of \$45/hour, wages need to increase over time at the pace of inflation. Getting periodic raises, promotions and changing jobs helps wages keep up with the costs of living. Making smart financial choices also fights inflation. Overall, inflation makes living on a fixed wage like \$45/hour more challenging over time. Earning potential needs to increase to maintain living standards.

## 5 Ways To Increase Your Hourly Wage

If you are currently earning \$45/hour or less, here are 5 proven ways to increase your hourly earnings:

1. Ask for a Raise – If you’ve been with your employer over 12 months, have positive performance reviews and have taken on more responsibility, you should ask for a salary increase. Even a 5% bump makes a difference.
2. Change Jobs – One of the fastest ways to increase pay is changing companies, especially if you’ve been in your role over 3 years. Leverage new job offers to negotiate pay.
3. Get Certified – Obtaining advanced certifications in your field conveys expertise and allows charging higher rates. For example, a PMP or CPA.
4. Pick Up Freelance Work – Offering services as a consultant or freelancer allows setting your own hourly rate. This works well combined with a regular job.
5. Develop Specialized Skills – Take courses and build skills in higher paying technology like software development, data science or cyber security to increase pay.

Putting in the time and effort needed to learn specialized skills almost always results in higher earning potential long-term. Change jobs when pay lags behind the market rate.

## Buying a car on \$45 an hour

Buying a car is one of the biggest purchases many people make during their lives. Is buying a car realistic on an hourly wage of \$45? The answer depends primarily on two factors:

1. Down payment amount

• Ideally you would put down 20% of the total vehicle price as a down payment. This results in better financing terms and lower monthly payments.
• On a \$45/hour income, a reasonable down payment is \$2,000 – \$5,000.

2. Total vehicle price

• As a general rule, your total monthly car payment including principal, interest, insurance and maintenance should be less than 10% of your monthly take-home pay.
• With \$45/hour and good credit, you can realistically afford a car in the \$15,000 – \$25,000 price range including taxes/fees.

Here is an example car buying scenario on \$45/hour:

• Hourly take-home pay: \$30/hour (after taxes and deductions)
• Monthly take-home pay: \$5,200 (assuming 40 hours for 4 weeks)
• 10% of monthly income for car payment: \$520
• Down payment saved up: \$3,000
• Target car price: \$18,000
• Loan amount: \$15,000 (over 4 years at 5% APR)
• Monthly payment with insurance: \$420

This allows you to buy a reliable used Toyota Camry or Honda Civic in the 1-3 year old range with typical financing. Always get pre-approved before buying and shop around for best rates.

## Can You Buy a House on \$45 An Hour?

Owning a home is part of the American dream. Is buying a house realistic on \$45/hour? Here are the key factors:

Down Payment

Most lenders require at least 10% down to avoid PMI insurance. On a \$300,000 home, you would need \$30,000 saved for the down payment. Doable for some but challenging for many. Larger down payments result in better rates.

Income and Debt Levels

• Gross income of \$90,000+ preferable for a home loan. Dual earners help.
• Total debt payments including mortgage ideally less than 36% of gross monthly income.
• Federal guidelines set maximum housing debt at around 31% of income.

Credit History

You will get the best mortgage rates with a credit score over 740. Pay all bills on time!

Location

Home prices and property taxes vary widely. \$250,000 buys a nice home in many areas but only a studio condo in San Francisco.

It’s tough to buy a home on a single \$45/hour income. Having a partner to combine incomes with helps greatly. You may need to reduce principal and interest costs by putting more money down. Get pre-approved and see what mortgages you qualify for. Save diligently for a robust down payment.

Owning rental property can be another path to generate passive income. Overall home ownership is achievable on \$45/hour with proper planning and preparation.

## Example Budget For \$45 Per Hour

Here is one example of a monthly budget for living on \$45 per hour:

• Take Home Pay: \$6,250 (after taxes, insurance, 401k etc.)
• Rent: \$1,500
• Utilities: \$250
• Car Payment: \$400
• Car Insurance: \$100
• Gas: \$200
• Groceries: \$400
• Dining Out: \$200
• Entertainment: \$150
• Misc. Expenses: \$300
• Retirement Savings: \$500
• Emergency Fund Savings: \$200

Total Expenses: \$4200

This allows saving over \$2000 per month for goals like vacations, down payment on a home etc. It assumes a modest cost of living area and average housing/car costs. High cost cities would need to reduce savings goals and entertainment costs.

Keys to optimizing budget on \$45/hour:

• Pick an affordable area to live
• Have roommates if single
• Buy used, reliable car with cash ideally
• Learn to cook at home more
• Set entertainment budget
• Contribute to retirement funds
• Build emergency savings fund

## In Summary

Despite inflation, \$45 an hour translates to a solid middle-class income of around \$93,000 annually. It is well above the median U.S. salary. However, America has wide variances in cost of living. Those in high cost metro areas will need to budget diligently and make some trade-offs to live comfortably on this wage. Individuals in lower cost Midwest or Southern towns may be able to afford more discretionary spending.

Having dual incomes in a household helps tremendously with achieving financial goals like buying property. Having existing savings and minimal debt also benefits living on \$45/hour. Overall, \$45 an hour provides a livable wage but may require careful budgeting, particularly in areas with very high housing costs. Conscious money management and developing skills to increase earning potential over time are key.