$8 an Hour is How Much a Year? Before and After Taxes

With inflation on the rise and the cost of living increasing, an hourly wage of $8 may not go as far as it once did. In this article, we will break down how much an $8 per hour salary equates to on a weekly, monthly, and yearly basis. We will calculate gross income as well as net income after taxes.

We will also explore whether $8 per hour is considered a good salary in today’s economy by looking at the impact of inflation, what standard of living it provides, and how it compares to other common hourly wages. Relevant topics covered include: converting $8 per hour to various time frames, estimating annual salary at part-time and full-time hours, calculating pay with overtime, the impact of unpaid time off, a sample budget for this income level, whether you can afford a car or house at this wage, and tips for getting a raise to improve your hourly earnings.

By providing these details, this article will give readers a comprehensive overview of what $8 per hour translates to in practical day-to-day terms.

Convert $8 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.

$8 an Hour is How Much a Year?

If you make $8 an hour, your yearly salary would be $16,640. 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($8) x Weeks worked per year(52) = $16,640

$8 an Hour is How Much a Month?

If you make $8 an hour, your monthly salary would be $1,386.67. We calculated this number by dividing your annual income by 12 months.

Hours worked per week (40) x Hourly wage($8) x Weeks worked per year(52) / Months per Year(12) = $1,386.67

$8 an Hour is How Much Biweekly?

If you make $8 an hour, your biweekly salary would be $640.

Hours worked per week (40) x Hourly wage($8) x 2 = $640

$8 an Hour is How Much a Week?

If you make $8 an hour, your weekly salary would be $320. Calculating based on 5 days per week and 8 hours each day.

Hours worked per week (40) x Hourly wage($8) = $320

$8 an Hour is How Much a Day?

If you make $8 an hour, your daily salary would be $64. We calculated your daily income based on 8 hours per day.

Hours worked per day (8) x Hourly wage($8) = $64

$8 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:

$8 per hour x 40 hours per week x 52 weeks per year = $16,640

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 $16,640 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 $16,640 .

Part time $8 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:

$8 per hour x 25 hours per week x 52 weeks per year = $10,400

By working 15 fewer hours per week (25 instead of 40), your annual earnings at $8 an hour drop from $16,640 to $10,400.

That’s a $6,240 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 $8 an hour:

Hours Per Week	Earnings Per Week	Annual Earnings
40	$320	$16,640
35	$280	$14,560
30	$240	$12,480
25	$200	$10,400
20	$160	$8,320
15	$120	$6,240

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.

$8 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 $8 per hour normally, you would make $12 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 $8 per hour = $320
• 5 overtime hours paid at $12 per hour = $60
• Your total one Week earnings =$320 + $60 = $380

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

$380 per week x 52 weeks per year = $19,760

That’s $3,120 more than you’d earn working just 40 hours per week at $8 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 $8 an hour:

Overtime hours per work day	Hours Per Week	Earnings Per Week	Annual Earnings
0	40	$320	$16,640
1	45	$380	$19,760
2	50	$440	$22,880
3	55	$500	$26,000
4	60	$560	$29,120
5	65	$620	$32,240
6	70	$680	$35,360
7	75	$740	$38,480

How Unpaid Time Off Impacts $8/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($8) x Weeks worked per year(50) = $16,000 annual salary

With 2 weeks unpaid time off, your annual earnings at $8/hour would drop by $640.

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	$320	$16,640
1	51	$320	$16,320
2	50	$320	$16,000
3	49	$320	$15,680
4	48	$320	$15,360
5	47	$320	$15,040
6	46	$320	$14,720
7	45	$320	$14,400

Key Takeaways for $8 Hourly Wage

In summary, here are some key points on annual earnings when making $8 per hour:

• At 40 hours per week, you’ll earn $16,640 per year.
• Part-time of 30 hours/week results in $12,480 annual salary.
• Overtime pay can boost yearly earnings, e.g. $3,120 extra at 45 hours/week.
• Unpaid time off reduces your total income, around $640 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.

$8 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 $8 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 $8 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 $16,640 gross annual pay, your federal tax bracket is 12%.

Your estimated federal tax would be:

$1,100 + ($16,640 – $11,000) x 12% = $1,776.80

So at $8/hour with $16,640 gross pay, you would owe about $1,776.80 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
Alaska	0%	None
Florida	0%	None
Nevada	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:

$16,640 gross pay x 3.07% PA tax rate = $510.85 estimated state income tax

So with $16,640 gross annual income, you would owe around $510.85 in Pennsylvania state income tax. Make sure to check your specific state’s 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:

$16,640 gross pay x 2.5% local tax rate = $416 estimated local tax

So with $16,640 in gross earnings, you may owe around $416 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:

$16,640 x 6.2% + $16,640 x 1.45% = $1,272.96

So you can expect to pay about $1,272.96 in Social Security and Medicare taxes out of your gross $16,640 in earnings.

Total Estimated Tax Payments

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

Federal tax: $1,776.80

State tax: $510.85

Local tax: $416

FICA tax: $1,272.96

Total Estimated Tax: $3,976.61

Calculating Your Take Home Pay

To calculate your annual take home pay at $8 /hour:

1. Take your gross pay

2. Subtract your estimated total tax payments

$16,640 gross pay – $3,976.61 Total Estimated Tax = $12,663.39 Your Take Home Pay

n summary, if you make $8 per hour and work full-time, you would take home around $12,663.39 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 $8 Per Hour to Yearly, Monthly, Biweekly, and Weekly Salary After Taxes

If you make $8 an hour and work full-time (40 hours per week), your estimated yearly salary would be $16,640 .

The $16,640 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 $8 An Hour Is How Much A Year After Taxes, we assumed the following conditions:

• You are single with $16,640 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 $3,976.61 , Your Take Home Pay is $12,663.39 , Total tax rate is 23.90%.

So next we’ll use 23.90% as the estimated tax rate to calculate your weekly, biweekly, and monthly after-tax income.

$8 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	$16,640	23.90%	$3,976.61	$12,663.39
Monthly Salary	$1,386.67	23.90%	$331.38	$1,055.28
BiWeekly Salary	$640	23.90%	$152.95	$487.05
Weekly Salary	$320	23.90%	$76.47	$243.53

$8  an hour is how much a year after taxes

Here is the adjusted yearly salary after a 23.90% tax reduction:

• • Yearly salary before taxes: $16,640
  • Estimated tax rate: 23.90%
  • Taxes owed (23.90% * $16,640 )= $3,976.61
  • Yearly salary after taxes: $12,663.39

Hourly Wage	Hours Worked Per Week	Weeks Worked Per Year	Total Yearly Salary	Estimated Tax Rate	Taxes Owed	After-Tax Yearly Salary
$8	40	52	$16,640	23.90%	$3,976.61	$12,663.39

$8 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 $8 per hour: $16,640
    • Divided by 12 months per year: $16,640 / 12 = $1,386.67 per month

The monthly salary based on a 40 hour work week at $8 per hour is $1,386.67 before taxes.

After applying the estimated 23.90% tax rate, the monthly after-tax salary would be:

• • Monthly before-tax salary: $1,386.67
  • Estimated tax rate: 23.90%
  • Taxes owed (23.90% * $1,386.67 )= $331.38
• Monthly after-tax salary: $1,055.28

Monthly Salary Based on $8 Per Hour

Hourly Wage	Yearly Salary	Months Per Year	Before-Tax Monthly Salary	Estimated Tax Rate	Taxes Owed	After-Tax Monthly Salary
$8	$16,640	12	$1,386.67	23.90%	$331.38	$1,055.28

$8 an hour is how much biweekly after taxes

Many people are paid biweekly, meaning every other week. To calculate the biweekly pay at $8 per hour:

• Hourly wage: $8
• Hours worked per week: 40
• Weeks per biweekly pay period: 2
• $8 * 40 hours * 2 weeks = $640 biweekly

Applying the 23.90%estimated tax rate:

• Biweekly before-tax salary: $640
• Estimated tax rate: 23.90%
• Taxes owed (23.90% * $640 )= $152.95
• Biweekly after-tax salary: $487.05

Biweekly Salary at $8 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
$8	40	2	$640	23.90%	$152.95	$487.05

$8 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: $8
• Hours worked per week: 40
• $8 * 40 hours = $320 per week

Accounting for the estimated 23.90% tax rate:

• Weekly before-tax salary: $320
• Estimated tax rate: 23.90%
• Taxes owed (23.90% * $320 )= $76.47
• Weekly after-tax salary: $243.53

Weekly Salary at $8 Per Hour

Hourly Wage	Hours Worked Per Week	Before-Tax Weekly Salary	Estimated Tax Rate	Taxes Owed	After-Tax Weekly Salary
$8	40	$320	23.90%	$76.47	$243.53

Key Takeaways

• An hourly wage of $8 per hour equals a yearly salary of $16,640 before taxes, assuming a 40 hour work week.
• After accounting for an estimated 23.90% tax rate, the yearly after-tax salary is approximately $12,663.39 .
• On a monthly basis before taxes, $8 per hour equals $1,386.67 per month. After estimated taxes, the monthly take-home pay is about $1,055.28 .
• The before-tax weekly salary at $8 per hour is $320 . After taxes, the weekly take-home pay is approximately $243.53 .
• For biweekly pay, the pre-tax salary at $8 per hour is $640 . After estimated taxes, the biweekly take-home pay is around $487.05 .

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 $8 an Hour a Good Salary?

An hourly wage of $8 equals a gross income of $16,640 if working full-time (40 hours a week). After standard payroll tax deductions, the net annual income would be approximately $14,500. For a single individual, $8 an hour may be enough to get by in some locations with a very low cost of living. However, supporting a family on this wage would be extremely challenging.

According to the U.S. Department of Health and Human Services (HHS), the 2023 federal poverty level for a single individual is $13,590. So a full-time job at $8 an hour would keep someone above the poverty line, but barely. The poverty threshold is higher for larger families. For a family of four, the 2023 poverty level is $27,750. Therefore, one wage earner working full-time at $8 an hour would fall below the poverty line while trying to support a family of four.

Overall, $8 an hour is extremely low pay by any standard. It would likely be impossible to afford normal living expenses for individuals or families in most areas at this wage level. An $8 an hour job should be considered supplemental income rather than a primary salary.

Jobs that pay $8 an hour

There are various jobs that typically pay around the $8 an hour range. Common positions include:

• Fast food workers – Fast food chains like McDonald’s, Burger King, and Taco Bell often pay wages close to the federal or state minimum. $8 an hour is a typical wage for entry-level fast food crew members.
• Dishwashers – Washing dishes in a restaurant’s kitchen is labor-intensive work with low pay. Many dishwashers earn around $8-10 an hour.
• Retail sales associates – Basic retail jobs in stores like Walmart, Target, or dollar stores often pay minimum wage or slightly above. $8 an hour is a typical retail sales associate’s wage.
• Movie theater workers – Entry level jobs at movie theaters, such as concession stand workers and ticket takers, tend to pay at or near the minimum wage. $8 an hour is common for these cinema jobs.
• Car wash workers – Washing, drying, and vacuuming vehicles at car wash facilities is a physically demanding job with few qualifications required. Workers often earn around minimum wage.
• Hotel housekeepers – Cleaning rooms in hotels, motels, and resorts pays low wages like $8 an hour for the physically tiring work required. Tipping can supplement the housekeepers’ income.
• Amusement park attendants – Workers who operate rides, game booths, and food stalls at amusement parks and arcades make around minimum wage, or $8 an hour typically.
• Farm workers – Picking fruits and vegetables on farms is a low paying job often at minimum wage levels. Farm workers earning $8 an hour is common.
• Dog walkers – Individuals who walk dogs for pet owners generally earn under $15 an hour, with many making around $8-10 an hour especially when starting out.

Can You Live Off $8 An Hour?

Living on $8 an hour would require extreme frugality. It may be possible depending on your location and personal circumstances, but it would be a constant financial struggle. Here are some factors to consider:

• Housing Costs – Paying market rate rent while making $8 an hour would be nearly impossible in most areas. Individuals would need to find very cheap roommate situations, stay with family rent-free, or possibly reside in subsidized housing.
• Food Costs – Groceries, restaurants, and other food purchases would need to be bare bones with little room for luxuries. Bulk basic foods, discount supermarkets, food banks, and food stamps could help cut costs.
• Transportation – Owning a personal vehicle would be extremely hard unless you inherit a car or buy a super cheap used one. Public transportation like buses would be a more realistic option. Walking or biking everywhere is also possible depending on distances.
• Health Insurance – $8 an hour jobs are unlikely to provide health benefits. Options could include staying on a parent’s plan until age 26, Medicaid if eligible, or going without insurance. Out-of-pocket medical expenses would be very difficult to afford.
• Other Costs – There would be little to no budget at this wage for entertainment, clothing, technology, personal care, travel, debt payments, utilities, childcare, or emergencies. Every dollar would need to be stretched.

Living on $8 an hour would require immense sacrifices and assistance from family, charities, government programs, or other sources. It is not a sustainable long-term financial solution for most individuals.

The impact of inflation on the value of $8 an hour

Inflation causes the purchasing power of money to decline over time. This means the actual value of $8 today is significantly less than in the past. Here is how inflation has impacted the real wage rate:

• In 1990, $8 an hour was worth $18.26 in 2023 dollars after adjusting for inflation. The cumulative inflation rate between 1990 and 2023 was 128%.
• In 2000, $8 an hour was worth $13.33 in 2023 dollars. The inflation rate between 2000 and 2023 was 67%.
• In 2010, $8 an hour was worth $10.15 in 2023 dollars. The inflation rate from 2010 to 2023 was 27%.
• In 2020, $8 an hour was worth $9.01 in 2023 dollars after inflating 11% over the past three years.

So while the wage has remained stagnant at $8 an hour over decades, its actual purchasing power has declined severely. Someone earning $8 an hour today is living on much less in real terms than someone earning $8 an hour in 1990, 2000, or even 2010.

The cost of living has increased consistently while the federal minimum wage has not kept pace. If the minimum wage in 1990 was adjusted for inflation, it would need to be over $18 an hour in 2023 just to equal the same purchasing ability.

5 Ways To Increase Your Hourly Wage

For individuals earning $8 an hour or slightly above, increasing your hourly pay can provide a tremendous boost to your financial stability. Here are 5 potential ways to increase your wages:

1. Ask for a raise – Have a conversation with your manager explaining why you deserve a higher hourly rate based on your strong performance and tenure. Prepare a case explaining why you are worth more to the company.
2. Take on additional responsibilities – Demonstrate initiative by asking if you can assist with new tasks and projects to expand your role. Taking on more responsibilities shows you can handle greater challenges.
3. Enroll in training programs – Some employers provide on-the-job training or apprenticeship programs that allow you to gain certifications and skills that could qualify you for promotions to higher-paying positions.
4. Work overtime hours – Volunteering for extra shifts or overtime hours at your existing job can substantially increase your weekly and monthly earnings if the extra hours are available.
5. Get a new higher-paying job – At some point, moving on to a new company may be the best option if your current employer won’t raise your wages. Seek openings with better compensation that align with your capabilities.

Adding even an extra $2 or $3 per hour can make a big difference improving your standard of living. Evaluate all options to get your wages closer to a livable earning level.

Buying a car on $8 an hour

Buying a car while earning just $8 an hour is extremely challenging but possible in certain circumstances. Here are some tips:

• Shop for an older used car requiring minimal payments. A $3,000-$4,000 economy car could be affordable if you put $1,000-$2,000 down and get a short 12-24 month loan term.
• Consider buying from a private seller rather than a dealer, which can be cheaper. Have a mechanic inspect before purchasing.
• Put down as much as you can for the down payment to reduce your monthly payments. Save up over many months if needed.
• Get the shortest loan term manageable for you, such as 12 or 24 months max. This keeps the total interest costs lower over the loan.
• Apply for auto financing from lenders like local credit unions that may offer better rates than dealers to those with lower incomes.
• Buy the most fuel efficient used car possible, as gas costs will be a significant portion of your tight budget.
• Only carry mandatory basic liability insurance to minimize monthly premiums. But avoid the temptation to drive uninsured.
• Be ready to invest money and time to maintain an older used vehicle. Learn basic DIY repairs to minimize maintenance costs.

Owning a car on an $8 an hour salary will squeeze your budget tremendously. Public transportation may still be a better option if it’s available for your commute.

Can You Buy a House on $8 An Hour?

Buying a house while earning $8 an hour is highly improbable for most people. Here are some reasons home ownership would be essentially impossible at this wage:

• Low earnings of $16,640 per year gross would make it extremely difficult to qualify for a mortgage. Lenders generally require gross income of at least $20,000 – $30,000 to extend financing.
• Down payment requirements of typically 10-20% of the purchase price would be next to impossible to save up on this salary. Just 5% down could equate to a year or more of total earnings.
• To keep mortgage payments affordable at this income level, you would need to buy a home at around $60,000 or less. Finding livable housing at that price even in very low cost markets is increasingly rare.
• After paying a mortgage along with insurance, taxes and maintenance costs, there would not be enough remaining from an $8 an hour income to cover other basic living expenses.
• Interest rates since 2020 have been above 5% for typical 30-year mortgages. That would make financing unaffordable without a much higher income. Rates below 5% were more common in prior years.

The bottom line is that home ownership is unfortunately out of reach for full-time employees earning $8 an hour or similar extremely low wages. Dramatically increasing your income would be required to make purchasing a home feasible.

Example Budget For $8 Per Hour

Here is one example of a hypothetical monthly budget for an individual earning $8 per hour while working 40 hours per week:

Gross Monthly Income

• $8/hour x 40 hours/week x 4 weeks = $1,280

Deductions

• Social Security Tax: -$80
• Medicare Tax: -$18
• Federal Income Tax: -$20
• State Income Tax: -$40
• Total Deductions: $158

Net Monthly Take Home Pay = $1,122

Monthly Expenses

• Rent (with 2 roommates): $400
• Groceries: $150
• Utilities: $60
• Cell Phone: $40
• Transportation (bus pass): $50
• Clothing, personal care, medical: $50
• Total Minimum Expenses = $750

Remaining for savings, emergencies, extras = $372/month

This budget shows it may be possible to just barely get by on $8 an hour as a single person with roommates in an extremely low cost of living region. However, saving for retirement, emergencies, or goals would be very slow and any unexpected expenses could be crushing. Overall, it is clear that attempting to live independently on $8 an hour would involve major financial struggles and a severely limited lifestyle.

In Summary

An hourly wage of $8 is right around the current US federal minimum. However, it is realistically inadequate for most individuals and families to cover basic living costs in 2023. The value of $8 an hour has also severely diminished over time due to inflation. While it may just be possible to barely scrape by on $8 an hour in certain rare circumstances, it would require major sacrifices and supplemental assistance. Boosting one’s earnings higher through raises, training, promotions, or finding a better paying job can be life-changing. For the millions of workers still earning $8, $9 or $10 per hour, the road to financial stability will likely be long and challenging. But actions like advocacy for minimum wage increases can over time make livable wages more attainable for all hard working Americans.