\$87 an Hour is How Much a Year? Before and After Taxes

The hourly wage you earn has a big impact on your annual salary and take-home pay. In today’s economy, many people are focused on finding jobs that pay \$87 an hour or more. But what does an hourly rate of \$87 really equal in terms of weekly, monthly, and yearly pay? And how much would you actually take home after accounting for taxes and other deductions?

In this article, we’ll break down the before and after tax salaries for \$87 an hour, including overtime pay. You’ll learn how to convert your hourly wage to other payment periods like weekly and annually. We’ll also discuss whether \$87 an hour is a good salary these days and what jobs pay this much or more. With inflation on the rise, it’s important to understand what hourly rates translate to in order to maintain your standard of living. Keep reading to learn how far \$87 an hour can really go each year.

Convert \$87 Per Hour to Weekly, Monthly, and Yearly Salary

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\$87 an Hour is How Much a Year?

If you make \$87 an hour, your yearly salary would be \$180,960. 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(\$87) x Weeks worked per year(52) = \$180,960

\$87 an Hour is How Much a Month?

If you make \$87 an hour, your monthly salary would be \$15,080. We calculated this number by dividing your annual income by 12 months.

Hours worked per week (40) x Hourly wage(\$87) x Weeks worked per year(52) / Months per Year(12) = \$15,080

\$87 an Hour is How Much Biweekly?

If you make \$87 an hour, your biweekly salary would be \$6,960.

Hours worked per week (40) x Hourly wage(\$87) x 2 = \$6,960

\$87 an Hour is How Much a Week?

If you make \$87 an hour, your weekly salary would be \$3,480. Calculating based on 5 days per week and 8 hours each day.

Hours worked per week (40) x Hourly wage(\$87) = \$3,480

\$87 an Hour is How Much a Day?

If you make \$87 an hour, your daily salary would be \$696. We calculated your daily income based on 8 hours per day.

Hours worked per day (8) x Hourly wage(\$87) = \$696

\$87 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:

\$87 per hour x 40 hours per week x 52 weeks per year = \$180,960

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 \$180,960 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 \$180,960 .

Part time \$87 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:

\$87 per hour x 30 hours per week x 52 weeks per year = \$135,720

By working 10 fewer hours per week (30 instead of 40), your annual earnings at \$87 an hour drop from \$180,960 to \$135,720.

That’s a \$45,240 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 \$87 an hour:

Hours Per Week Earnings Per Week Annual Earnings
40 \$3,480 \$180,960
35 \$3,045 \$158,340
30 \$2,610 \$135,720
25 \$2,175 \$113,100
20 \$1,740 \$90,480
15 \$1,305 \$67,860

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.

\$87 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 \$87 per hour normally, you would make \$130.50 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 \$87 per hour = \$3,480
• 5 overtime hours paid at \$130.50 per hour = \$652.50
• Your total one Week earnings =\$3,480 + \$652.50 = \$4,132.50

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

\$4,132.50 per week x 52 weeks per year = \$214,890

That’s \$33,930 more than you’d earn working just 40 hours per week at \$87 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 \$87 an hour:

 Overtime hours per work day Hours Per Week Earnings Per Week Annual Earnings 0 40 \$3,480 \$180,960 1 45 \$4,132.50 \$214,890 2 50 \$4,785 \$248,820 3 55 \$5,437.50 \$282,750 4 60 \$6,090 \$316,680 5 65 \$6,742.50 \$350,610 6 70 \$7,395 \$384,540 7 75 \$8,047.50 \$418,470

How Unpaid Time Off Impacts \$87/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(\$87) x Weeks worked per year(50) = \$174,000 annual salary

With 2 weeks unpaid time off, your annual earnings at \$87/hour would drop by \$6,960.

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 \$3,480 \$180,960 1 51 \$3,480 \$177,480 2 50 \$3,480 \$174,000 3 49 \$3,480 \$170,520 4 48 \$3,480 \$167,040 5 47 \$3,480 \$163,560 6 46 \$3,480 \$160,080 7 45 \$3,480 \$156,600

Key Takeaways for \$87 Hourly Wage

In summary, here are some key points on annual earnings when making \$87 per hour:

• At 40 hours per week, you’ll earn \$180,960 per year.
• Part-time of 30 hours/week results in \$135,720 annual salary.
• Overtime pay can boost yearly earnings, e.g. \$33,930 extra at 45 hours/week.
• Unpaid time off reduces your total income, around \$6,960 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.

\$87 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 \$87 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 \$87 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 \$180,960 gross annual pay, your federal tax bracket is 24%.

Your estimated federal tax would be:

\$16,290 + (\$180,960 – \$95,376) x 24% = \$36,830.16

So at \$87/hour with \$180,960 gross pay, you would owe about \$36,830.16 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:

\$180,960 gross pay x 3.07% PA tax rate = \$5,555.47 estimated state income tax

So with \$180,960 gross annual income, you would owe around \$5,555.47 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:

\$180,960 gross pay x 2.5% local tax rate = \$4,524 estimated local tax

So with \$180,960 in gross earnings, you may owe around \$4,524 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% + \$180,960 x 1.45% = \$13,843.44

So you can expect to pay about \$13,843.44 in Social Security and Medicare taxes out of your gross \$180,960 in earnings.

Total Estimated Tax Payments

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

Federal tax: \$36,830.16

State tax: \$5,555.47

Local tax: \$4,524

FICA tax: \$13,843.44

Total Estimated Tax: \$60,753.07

To calculate your annual take home pay at \$87 /hour:

2. Subtract your estimated total tax payments

\$180,960 gross pay – \$60,753.07 Total Estimated Tax = \$120,206.93 Your Take Home Pay

n summary, if you make \$87 per hour and work full-time, you would take home around \$120,206.93 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 \$87 Per Hour to Yearly, Monthly, Biweekly, and Weekly Salary After Taxes

If you make \$87 an hour and work full-time (40 hours per week), your estimated yearly salary would be \$180,960 .

The \$180,960 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 \$87 An Hour Is How Much A Year After Taxes, we assumed the following conditions:

• You are single with \$180,960 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 \$60,753.07 , Your Take Home Pay is \$120,206.93 , Total tax rate is 33.57%.

So next we’ll use 33.57% as the estimated tax rate to calculate your weekly, biweekly, and monthly after-tax income.

\$87 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 \$180,960 33.57% \$60,753.07 \$120,206.93 Monthly Salary \$15,080 33.57% \$5,062.76 \$10,017.24 BiWeekly Salary \$6,960 33.57% \$2,336.66 \$4,623.34 Weekly Salary \$3,480 33.57% \$1,168.33 \$2,311.67

\$87  an hour is how much a year after taxes

Here is the adjusted yearly salary after a 33.57% tax reduction:

• Yearly salary before taxes: \$180,960
• Estimated tax rate: 33.57%
• Taxes owed (33.57% * \$180,960 )= \$60,753.07
• Yearly salary after taxes: \$120,206.93
Hourly Wage Hours Worked Per Week Weeks Worked Per Year Total Yearly Salary Estimated Tax Rate Taxes Owed After-Tax Yearly Salary
\$87 40 52 \$180,960 33.57% \$60,753.07 \$120,206.93

\$87 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 \$87 per hour: \$180,960
• Divided by 12 months per year: \$180,960 / 12 = \$15,080 per month

The monthly salary based on a 40 hour work week at \$87 per hour is \$15,080 before taxes.

After applying the estimated 33.57% tax rate, the monthly after-tax salary would be:

• Monthly before-tax salary: \$15,080
• Estimated tax rate: 33.57%
• Taxes owed (33.57% * \$15,080 )= \$5,062.76
• Monthly after-tax salary: \$10,017.24

Monthly Salary Based on \$87 Per Hour

Hourly Wage Yearly Salary Months Per Year Before-Tax Monthly Salary Estimated Tax Rate Taxes Owed After-Tax Monthly Salary
\$87 \$180,960 12 \$15,080 33.57% \$5,062.76 \$10,017.24

\$87 an hour is how much biweekly after taxes

Many people are paid biweekly, meaning every other week. To calculate the biweekly pay at \$87 per hour:

• Hourly wage: \$87
• Hours worked per week: 40
• Weeks per biweekly pay period: 2
• \$87 * 40 hours * 2 weeks = \$6,960 biweekly

Applying the 33.57%estimated tax rate:

• Biweekly before-tax salary: \$6,960
• Estimated tax rate: 33.57%
• Taxes owed (33.57% * \$6,960 )= \$2,336.66
• Biweekly after-tax salary: \$4,623.34

Biweekly Salary at \$87 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
\$87 40 2 \$6,960 33.57% \$2,336.66 \$4,623.34

\$87 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: \$87
• Hours worked per week: 40
• \$87 * 40 hours = \$3,480 per week

Accounting for the estimated 33.57% tax rate:

• Weekly before-tax salary: \$3,480
• Estimated tax rate: 33.57%
• Taxes owed (33.57% * \$3,480 )= \$1,168.33
• Weekly after-tax salary: \$2,311.67

Weekly Salary at \$87 Per Hour

Hourly Wage Hours Worked Per Week Before-Tax Weekly Salary Estimated Tax Rate Taxes Owed After-Tax Weekly Salary
\$87 40 \$3,480 33.57% \$1,168.33 \$2,311.67

Key Takeaways

• An hourly wage of \$87 per hour equals a yearly salary of \$180,960 before taxes, assuming a 40 hour work week.
• After accounting for an estimated 33.57% tax rate, the yearly after-tax salary is approximately \$120,206.93 .
• On a monthly basis before taxes, \$87 per hour equals \$15,080 per month. After estimated taxes, the monthly take-home pay is about \$10,017.24 .
• The before-tax weekly salary at \$87 per hour is \$3,480 . After taxes, the weekly take-home pay is approximately \$2,311.67 .
• For biweekly pay, the pre-tax salary at \$87 per hour is \$6,960 . After estimated taxes, the biweekly take-home pay is around \$4,623.34 .

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 \$87 an Hour a Good Salary?

For most Americans, an income of \$87 an hour would be an excellent salary. Assuming a full-time job with 40 hours per week, this hourly rate translates to an annual salary of around \$180,000. According to the U.S. Census Bureau, the median household income in 2021 was only \$70,784. Therefore, \$87 an hour is well above what a typical U.S. family earns.

However, it’s important to keep in mind that \$87 per hour may go further in some parts of the country compared to others due to differences in cost of living. For example, \$87 an hour will stretch much further in a smaller town in the Midwest versus an expensive coastal city like San Francisco or New York. But in many areas, this hourly wage would provide a comfortable, upper-middle-class lifestyle.

Jobs that Pay \$87 Per Hour

Very few jobs pay \$87 or more per hour. According to the Bureau of Labor Statistics (BLS), only certain high-paying occupations will earn this type of hourly wage.

Here are some of the jobs that pay \$87 per hour or more:

• Anesthesiologists – \$187.20/hour
• Surgeons – \$187.20/hour
• Psychiatrists – \$119.86/hour
• Dentists – \$114.01/hour
• Chief Executives – \$107.07/hour
• Podiatrists – \$105.19/hour
• Architectural Managers – \$97.98/hour
• Nurse Practitioners – \$96.45/hour
• Orthodontists – \$95.70/hour
• Software Developers – \$92.38/hour

As you can see, the highest-paying jobs tend to be in medicine and dentistry, as well as executive-level and technology roles. However, even traditional white-collar jobs like lawyers, engineers, and accountants can earn over \$87 per hour once they reach advanced stages in their careers.

Can You Live Off \$87 An Hour?

The main question is, can you realistically live off of \$87 an hour? Let’s take a look at what kind of lifestyle is possible on this salary.

At \$87 an hour full-time, your annual pre-tax income would be around \$180,000. After accounting for federal taxes, Social Security, and Medicare, your take-home pay would be approximately \$135,000 per year, or \$11,250 per month. For an individual, this take-home pay is certainly enough to live comfortably in most areas of the country.

You could afford a nice house or condo in many suburban areas, though homeownership would still be challenging in high-cost cities. A decent used car could easily be purchased in cash. Additionally, expenses like groceries, utilities, transportation, and entertainment are very affordable with this level of income.

However, for families supporting multiple children while saving for college and retirement, \$87 an hour may mean living a middle-class lifestyle depending on where you live. Overall, this income allows for a comfortable life but not an extravagant one.

The Impact of Inflation on the Value of \$87 An Hour

While \$87 an hour currently provides a solid middle-class or upper-middle-class income, inflation can quickly erode the real value of this wage over time. With U.S. inflation currently over 8% annually, prices are rising rapidly.

If inflation averages just 3% per year going forward, the real value of \$87 per hour would decline significantly over the next decade. In ten years at 3% inflation, \$87 today would only have the same purchasing power as approximately \$70 per hour in 2033 dollars.

This means individuals earning \$87 per hour today would have to receive raises regularly just to maintain their standard of living. Companies and workers need to account for inflation when negotiating salaries and hourly wages. Otherwise, inflationary pressures make wages worth less each year.

5 Ways To Increase Your Hourly Wage

For those earning less than \$87 per hour, what are some potential ways to increase your hourly wage? Here are 5 options:

1. Ask for a raise – If you’ve been at a company for a while and have taken on more responsibilities, negotiate a higher salary or hourly pay. Come armed with market data and your accomplishments.
2. Find a higher paying job – Explore job ads and use salary comparison sites to target positions that pay over \$87 per hour. Be prepared to enhance your skills or credentials.
3. Freelance – moonlight doing freelance work related to your expertise at a high hourly rate to supplement full-time income.
4. Develop new skills – Take classes to master in-demand abilities like software development or financial analysis to qualify for top-paying roles.
5. Start a side business – Launch a website, shop or sell products to earn passive income and increase your hourly earnings.

Putting in the effort can make doubling your wage from \$40 per hour to over \$80 per hour possible within a few years.

Buying a Car on \$87 An Hour

What kind of car can you afford on \$87 an hour? At this income level, you should be able to pay for a well-equipped used car or new car priced at around the average new car transaction price.

According to Kelley Blue Book, in August 2022 the average new car transaction price reached over \$48,000. With strong credit, you could comfortably afford loan payments on a new car at this price point, perhaps opting for a 3-year loan term. That would equate to a monthly loan payment of around \$1,400 on a \$48,000 vehicle.

For a used car costing \$25,000, monthly payments would be less than \$750 over 3 years with good credit. This buys a nice lightly-used SUV or sedan with low mileage. You could also pay cash for many used cars to avoid finance charges. With your healthy income, buying a reliable car that fits your lifestyle is definitely achievable.

Can You Buy a House on \$87 An Hour?

On an hourly wage of \$87, buying a house is likely realistic depending on where you want to live. The median home price nationally is currently around \$355,000. In expensive coastal areas and cities, median prices range from \$500,000 to over \$1 million.

At \$87 an hour on a 40 hour work week, lenders would likely approve a mortgage up to around \$600,000 with a 20% downpayment. This potentially allows for buying a comfortable home in mid-sized Midwest or Southern cities. In pricier regions, you may need to compromise on space or condition to keep housing costs affordable.

Renting may make more sense in high-cost areas, where mortgage payments and taxes consume too much of your monthly income. The ideal is to spend no more than 28% of your pre-tax income on housing expenses. On \$180,000 a year, aim to keep costs under \$4,200 per month.

Owning a home while maxing out retirement and college savings will require careful budgeting at \$87 per hour in high-price real estate markets. But in many areas, home ownership is very possible on this salary if planned wisely.

Example Budget for \$87 Per Hour

Here is one example of a monthly budget for someone earning \$87 an hour while saving for retirement and putting aside college funds:

• Gross Monthly Income at 40 Hours/Week: \$14,560
• Retirement Savings (15% of gross): \$2,184
• College Savings for 2 Kids (5% gross): \$728
• Federal, State, Local Taxes (25% estimate): \$3,640
• Take Home Pay: \$8,008
• Mortgage/Rent: \$2,000
• Car Payment: \$700
• Utilities: \$500
• Groceries: \$600
• Car Insurance: \$100
• Gas: \$200
• Dining Out: \$400
• Entertainment: \$250
• Miscellaneous: \$500
• Total Expenses: \$5,250
• Remaining: \$2,758

This leaves over \$2,750 per month for additional savings, travel, or discretionary spending while meeting the core necessities. Retirement and college savings are being funded though may need to be higher in certain areas. Overall, this example illustrates that \$87 an hour provides a solid middle-class lifestyle.

In Summary

In most areas, an hourly salary of \$87 provides enough income to live comfortably as an individual or support a family. Jobs paying \$87 per hour or more are typically found in medicine, dentistry, law, business executive roles, and technology fields. Those earning less can work toward increasing pay through raises, new jobs, skills development, freelancing, or side businesses. Though inflation eats away at purchasing power over time, \$87 per hour allows most households today to meet their core needs and enjoy some discretionary spending. With careful budgeting and money management, home ownership, vacationing, and other middle-class luxuries are achievable on this salary.