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$85 an Hour is How Much a Year? Before and After Taxes

Lucy

Jobs paying $85 per hour offer wages well above the national average, but what do these high hourly rates equate to over the course of a year? In this article, we’ll break down the yearly, monthly, biweekly, and weekly earnings for positions paying $85 an hour. We’ll discuss whether $85/hour is considered a good salary, which fields commonly offer these high wages, and what level of lifestyle is possible on this income. Additionally, we’ll look at how taxes, overtime, and unpaid time off can impact the actual annual take-home pay at this rate. Understanding the full earnings potential of $85/hour jobs can help individuals evaluate career options and make informed financial plans. Even working part time at $85 an hour may allow certain luxury expenditures and savings goals. We’ll analyze sample budgets to showcase what is realistically affordable on this salary before and after taxes. Whether seeking to maximize earnings in a current role or evaluating a new job offer, the yearly earnings projection from an $85 hourly wage provides critical insight.

Table of Contents

Convert $85 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.

$85 an Hour is How Much a Year?

If you make $85 an hour, your yearly salary would be $176,800. 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($85) x Weeks worked per year(52) = $176,800

$85 an Hour is How Much a Month?

If you make $85 an hour, your monthly salary would be $14,733.33. We calculated this number by dividing your annual income by 12 months.

Hours worked per week (40) x Hourly wage($85) x Weeks worked per year(52) / Months per Year(12) = $14,733.33

$85 an Hour is How Much Biweekly?

If you make $85 an hour, your biweekly salary would be $6,800.

Hours worked per week (40) x Hourly wage($85) x 2 = $6,800

$85 an Hour is How Much a Week?

If you make $85 an hour, your weekly salary would be $3,400. Calculating based on 5 days per week and 8 hours each day.

Hours worked per week (40) x Hourly wage($85) = $3,400

$85 an Hour is How Much a Day?

If you make $85 an hour, your daily salary would be $680. We calculated your daily income based on 8 hours per day.

Hours worked per day (8) x Hourly wage($85) = $680

$85 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:

$85 per hour x 40 hours per week x 52 weeks per year = $176,800

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 $176,800 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 $176,800 .

Part time $85 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:

$85 per hour x 25 hours per week x 52 weeks per year = $110,500

By working 15 fewer hours per week (25 instead of 40), your annual earnings at $85 an hour drop from $176,800 to $110,500.

That’s a $66,300 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 $85 an hour:

Hours Per Week

Earnings Per Week

Annual Earnings

40

$3,400

$176,800

35

$2,975

$154,700

30

$2,550

$132,600

25

$2,125

$110,500

20

$1,700

$88,400

15

$1,275

$66,300

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.

$85 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 $85 per hour normally, you would make $127.50 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 $85 per hour = $3,400

5 overtime hours paid at $127.50 per hour = $637.50

Your total one Week earnings =$3,400 + $637.50 = $4,037.50

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

$4,037.50 per week x 52 weeks per year = $209,950

That’s $33,150 more than you’d earn working just 40 hours per week at $85 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 $85 an hour:

Overtime hours per work day

Hours Per Week

Earnings Per Week

Annual Earnings

0

40

$3,400

$176,800

1

45

$4,037.50

$209,950

2

50

$4,675

$243,100

3

55

$5,312.50

$276,250

4

60

$5,950

$309,400

5

65

$6,587.50

$342,550

6

70

$7,225

$375,700

7

75

$7,862.50

$408,850

How Unpaid Time Off Impacts $85/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($85) x Weeks worked per year(50) = $170,000 annual salary

With 2 weeks unpaid time off, your annual earnings at $85/hour would drop by $6,800.

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

$3,400

$176,800

1

51

$3,400

$173,400

2

50

$3,400

$170,000

3

49

$3,400

$166,600

4

48

$3,400

$163,200

5

47

$3,400

$159,800

6

46

$3,400

$156,400

7

45

$3,400

$153,000

Key Takeaways for $85 Hourly Wage

In summary, here are some key points on annual earnings when making $85 per hour:

At 40 hours per week, you’ll earn $176,800 per year.

Part-time of 30 hours/week results in $132,600 annual salary.

Overtime pay can boost yearly earnings, e.g. $33,150 extra at 45 hours/week.

Unpaid time off reduces your total income, around $6,800 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.

$85 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 $85 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 $85 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:

For example, if you are single with $176,800 gross annual pay, your federal tax bracket is 24%.

Your estimated federal tax would be:

$16,290 + ($176,800 – $95,376) x 24% = $35,831.76

So at $85/hour with $176,800 gross pay, you would owe about $35,831.76 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:

$176,800 gross pay x 3.07% PA tax rate = $5,427.76 estimated state income tax

So with $176,800 gross annual income, you would owe around in $5,427.76 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:

$176,800 gross pay x 2.5% local tax rate = $4,420 estimated local tax

So with $176,800 in gross earnings, you may owe around $4,420 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:

$160,200 x 6.2% + $176,800 x 1.45% = $13,525.20

So you can expect to pay about $13,525.20 in Social Security and Medicare taxes out of your gross $176,800 in earnings.

Total Estimated Tax Payments

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

Federal tax: $35,831.76

State tax: $5,427.76

Local tax: $4,420

FICA tax: $13,525.20

Total Estimated Tax: $59,204.72

Calculating Your Take Home Pay

To calculate your annual take home pay at $85 /hour:

1. Take your gross pay

2. Subtract your estimated total tax payments

$176,800 gross pay – $59,204.72 Total Estimated Tax = $117,595.28 Your Take Home Pay

n summary, if you make $85 per hour and work full-time, you would take home around $117,595.28 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 $85 Per Hour to Yearly, Monthly, Biweekly, and Weekly Salary After Taxes

If you make $85 an hour and work full-time (40 hours per week), your estimated yearly salary would be $176,800 .

The $176,800 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 $85 An Hour Is How Much A Year After Taxes, we assumed the following conditions:

You are single with $176,800 gross annual pay, your federal tax bracket is 24 %.

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 $59,204.72 , Your Take Home Pay is $117,595.28 , Total tax rate is 33.49%.

So next we’ll use 33.49% as the estimated tax rate to calculate your weekly, biweekly, and monthly after-tax income.

$85 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

$176,800

33.49%

$59,204.72

$117,595.28

Monthly Salary

$14,733.33

33.49%

$4,933.73

$9,799.61

BiWeekly Salary

$6,800

33.49%

$2,277.10

$4,522.90

Weekly Salary

$3,400

33.49%

$1,138.55

$2,261.45

$85 an hour is how much a year after taxes

Here is the adjusted yearly salary after a 33.49% tax reduction:

Yearly salary before taxes: $176,800

Estimated tax rate: 33.49%

Taxes owed (33.49% * $176,800 )= $59,204.72

Yearly salary after taxes: $117,595.28

Hourly Wage

Hours Worked Per Week

Weeks Worked Per Year

Total Yearly Salary

Estimated Tax Rate

Taxes Owed

After-Tax Yearly Salary

$85

40

52

$176,800

33.49%

$59,204.72

$117,595.28

$85 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 $85 per hour: $176,800

Divided by 12 months per year: $176,800 / 12 = $14,733.33 per month

The monthly salary based on a 40 hour work week at $85 per hour is $14,733.33 before taxes.

After applying the estimated 33.49% tax rate, the monthly after-tax salary would be:

Monthly before-tax salary: $14,733.33

Estimated tax rate: 33.49%

Taxes owed (33.49% * $14,733.33 )= $4,933.73

Monthly after-tax salary: $9,799.61

Monthly Salary Based on $85 Per Hour

Hourly Wage

Yearly Salary

Months Per Year

Before-Tax Monthly Salary

Estimated Tax Rate

Taxes Owed

After-Tax Monthly Salary

$85

$176,800

12

$14,733.33

33.49%

$4,933.73

$9,799.61

$85 an hour is how much biweekly after taxes

Many people are paid biweekly, meaning every other week. To calculate the biweekly pay at $85 per hour:

Hourly wage: $85

Hours worked per week: 40

Weeks per biweekly pay period: 2

$85 * 40 hours * 2 weeks = $6,800 biweekly

Applying the 33.49%estimated tax rate:

Biweekly before-tax salary: $6,800

Estimated tax rate: 33.49%

Taxes owed (33.49% * $6,800 )= $2,277.10

Biweekly after-tax salary: $4,522.90

Biweekly Salary at $85 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

$85

40

2

$6,800

33.49%

$2,277.10

$4,522.90

$85 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: $85

Hours worked per week: 40

$85 * 40 hours = $3,400 per week

Accounting for the estimated 33.49% tax rate:

Weekly before-tax salary: $3,400

Estimated tax rate: 33.49%

Taxes owed (33.49% * $3,400 )= $1,138.55

Weekly after-tax salary: $2,261.45

Weekly Salary at $85 Per Hour

Hourly Wage

Hours Worked Per Week

Before-Tax Weekly Salary

Estimated Tax Rate

Taxes Owed

After-Tax Weekly Salary

$85

40

$3,400

33.49%

$1,138.55

$2,261.45

Key Takeaways

An hourly wage of $85 per hour equals a yearly salary of $176,800 before taxes, assuming a 40 hour work week.

After accounting for an estimated 33.49% tax rate, the yearly after-tax salary is approximately $117,595.28 .

On a monthly basis before taxes, $85 per hour equals $14,733.33 per month. After estimated taxes, the monthly take-home pay is about $9,799.61 .

The before-tax weekly salary at $85 per hour is $3,400 . After taxes, the weekly take-home pay is approximately $2,261.45 .

For biweekly pay, the pre-tax salary at $85 per hour is $6,800 . After estimated taxes, the biweekly take-home pay is around $4,522.90 .

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 $85 an Hour a Good Salary?

To determine if $85 per hour is a good wage, we need to look at the average hourly pay in the United States. According to the Bureau of Labor Statistics, the median hourly wage for all occupations in May 2021 was $20.17. This means that half of all workers earned less than this amount, while the other half earned more.

At $85 an hour, this hourly wage is over 4 times higher than the national median. It also translates to an annual salary of $176,800 if working 40 hours per week for 52 weeks. The median annual salary for all occupations in May 2021 was $44,225. So at almost 4 times the national median salary, $85 an hour is considered an excellent wage.

However, to get a better sense of how far $85 an hour goes, we need to look at the cost of living, particularly housing. The cost of living varies significantly across the country. $85 per hour will go much further in some areas than others.

Jobs that Pay $85 Per Hour

Very few occupations pay $85 or more per hour on average. According to the Bureau of Labor Statistics, some of the jobs that pay over $85 per hour include:

Anesthesiologists – The average hourly wage for anesthesiologists is $113.86. These medical doctors administer anesthesia to patients and monitor their vital signs during surgeries and other procedures.

Surgeons – Surgeons have an average hourly wage of $115.60. This includes general surgeons, specialized surgeons like neurosurgeons or orthopedic surgeons, as well as oral and maxillofacial surgeons.

Obstetricians and Gynecologists – OB/GYNs earn an average of $110.37 per hour providing medical care related to pregnancy, childbirth, and diseases of the female reproductive system.

Psychiatrists – With an average hourly wage of $100.75, psychiatrists diagnose and treat mental illnesses through psychotherapy, psychoanalysis, hospitalization, and medication.

Dentists – General dentists earn $83.25 per hour on average, providing dental care like cleanings, fillings, crowns, tooth extractions, and more. Specialized dentists like orthodontists or oral surgeons have even higher average wages.

The highest paying jobs tend to be in the medical and dental fields. However, there are some finance, aviation, engineering, and legal jobs that can reach $85 per hour salaries as well. Those with advanced degrees and specialized skills tend to qualify for these high paying positions.

Can You Live Off $85 An Hour?

Whether or not $85 an hour is enough to live comfortably depends entirely on individual circumstances – most notably, where you live and the size of your household.

In low cost-of-living rural areas and small towns, this wage would be more than sufficient to cover basic necessities plus discretionary spending. However, it likely won’t stretch nearly as far in high cost-of-living metropolitan areas like New York City and San Francisco, where median rents alone can eat up over $3,000 per month of your pretax income.

Your lifestyle expectations also play a major role. A single person with no children may live quite comfortably on $85 an hour. However, a family of four with a mortgage payment, car payments, childcare costs, etc. will struggle in many parts of the country.

Adding up typical monthly costs shows how budgets at $85/hour can vary:

Rent for a 1-bedroom apartment – $1,000 to $3,500+ depending on location

Car payment and insurance – $400 to $1000

Groceries – $400 for one person

Utilities – $200 to $400

Internet and cell phone – $100 to $200

Health insurance – $400 to $1000

Entertainment/other costs – $500+

As you can see, housing is the biggest factor. Those living in places like rural Kansas can spend $800 per month on rent and have plenty left over at $85 an hour. But in coastal cities like Los Angeles or Boston, rent alone can eat up $30,000 to $40,000 pretax.

The bottom line is that $85 per hour is certainly a well-above-average wage. However, depending on where you live and your personal situation, it may or may not provide a comfortable standard of living. Careful budgeting and smart financial choices are essential.

The Impact of Inflation on the Value of $85 Per Hour

One important thing to consider is how inflation affects the real value of $85 per hour. With inflation currently over 8% in the United States, the prices for goods and services are rising significantly each year.

To maintain the same purchasing power, $85 per hour will need to increase by around 8% annually just to keep up. For example, if inflation averages 8% per year over the next 5 years, an $85 per hour salary today would need to rise to around $115 per hour just to equal the same real buying power.

So while $85 an hour provides excellent pay today, the future earning potential matters more than current wages. Careers that provide steady raises each year to match or exceed inflation are ideal to maintain your standard of living long-term.

If you’re living on a fixed income from sources like social security, pensions, or retirement savings, inflation can hit even harder over decades in retirement. Cost of living adjustments and portfolio growth are very important for retirees earning around $85 per hour equivalent.

No matter your stage of life, focusing on increasing skills and earnings potential is wise in an inflationary environment.

5 Ways To Increase Your Hourly Wage

For those earning less than $85 per hour, here are some tips to increase your wages:

Get More Education – Further degrees and certifications like a Master’s degree almost always lead to higher earning potential. Education pays off most in specialized, high-demand fields.

Develop Specialized Skills – Become an expert in a niche field like cybersecurity, data science, or niche medical specialties. Specialized skills are harder to replace.

Take on More Responsibility – Managing projects or people provides experience that commands higher salaries. Seek promotions and leadership roles.

Switch Companies Strategically – Leverage experience at one company to get hired at higher pay elsewhere, especially if changing industries. Don’t get too comfortable.

Negotiate Salary & Raises – Research typical pay for your role and don’t be afraid to negotiate. Ask for annual raises to at least match inflation.

Remember, boosting income ultimately matters more than cutting costs when it comes to building wealth and maintaining your lifestyle long-term. While smart budgeting helps, increasing earning power is the key to prosperity.

Buying a Car on $85 An Hour

One major expense that households face is buying a car. Is buying a nice vehicle realistic on $85 per hour? Let’s take a look.

With good credit, you can qualify to finance expensive car purchases, but that doesn’t mean you can actually afford them. As a general rule, your total monthly vehicle expenses – car payment, insurance, gas and maintenance – shouldn’t exceed 10-15% of your pretax income.

On $85 an hour or $176,800 per year before taxes, that means keeping total car costs under $1,500 to $2,300 per month. Here are some examples:

For a luxury vehicle like a BMW 5 Series costing $60,000, expect a $1,000 monthly car payment plus $200 insurance, $150 gas, and $100 maintenance for a total of $1,450. This fits a $85/hour budget.

A $40,000 Toyota RAV4 crossover with a $700 monthly payment plus $150 insurance, gas, and maintenance totals $1,000. Well within budget.

A $90,000 high-end Tesla Model X electric SUV could run $1,600 per month including charging costs, stretching the 10-15% of income target.

While you may be able to afford expensive vehicles on an $85 per hour salary, it’s smart to buy slightly used and keep total costs within your budget. This frees up cash for other priorities like saving for retirement or vacations.

Can You Buy a House on $85 An Hour?

Owning a home is a common goal for many households, but is it achievable on $85 per hour? Housing affordability depends heavily on the real estate market where you live.

As a general rule, you can afford a home price that is 2 to 3 times your gross annual income. On $85 an hour base pay or $176,800 per year before taxes, that means affording a home valued between $350,000 and $500,000. Down payment amount, interest rates, property taxes and insurance will impact the monthly payment.

Here are some examples of what’s affordable on $85 per hour:

In Midwest cities like Kansas City or St. Louis, median home prices are $200,000 to $300,000, easily affordable on this income.

In Southwestern cities like Phoenix or Austin, media home prices around $400,000 are affordable with 20% down.

In coastal areas like Los Angeles or Boston, median home prices exceed $800,000, likely unaffordable unless you have significant savings.

In rural markets, homes well under $200,000 are affordable on $85 per hour incomes.

While buying an average home is achievable on $85 per hour in many markets, becoming a homeowner isn’t realistic everywhere. Focus on building savings for a 20% down payment plus closing costs and buying within your budget.

Example Budget for $85 Per Hour

To make the most of $85 per hour earnings, develop a realistic monthly budget that aligns with your financial goals. Below is an example budget for a single person with no kids living in a Midwest city earning this hourly wage:

Gross Monthly Income at $85/hour: $14,666

Federal and State Taxes: $3,500

401(k) Retirement Contribution: $1,200

Health Insurance: $500

Rent: $1,200

Groceries: $500

Utilities: $200

Internet/Phone: $150

Car Lease: $400

Car Insurance: $100

Gas: $200

Entertainment: $500

Vacation Savings: $500

Emergency Fund Savings: $500

Total Monthly Expenses: $9,450

Remainder/Savings: $5,216

This leaves over $5,000 per month that could be put towards other goals like paying down debt, making extra mortgage payments, or building long-term savings.

Having over 50% of income left after budgeting expenses is a great place to be with a $85 per hour salary. However, amounts would need to be adjusted for those with higher cost housing markets, families to support or other circumstances.

In Summary

An hourly wage of $85 is considered an excellent salary substantially above national averages. However, the buying power of this wage can vary significantly based on where you live and household size. In moderate cost-of-living areas, $85 an hour provides earnings well above a comfortable lifestyle for singles or dual-income households without children. Families with kids, especially in high cost metro areas, will find budgets much tighter. Individual circumstances, smart budgeting, and keeping debt low are key to making the most of $85 per hour earnings both now and long into the future.