What Do You REALLY Make Per Hour?

Greg Mork
Greg Mork
Aug 26, 2017 · 2 min read
Extra ridiculous traffic on a bike ride home

The obvious factors that affect your take-home pay for a job are 1. how much are you getting paid? and 2. how much is taken out for taxes? But we often stop there.

The truth is, you’re not getting paid your after-tax wage per hour. It’s only per hour you are working, and doesn’t take into account commute time, lunch time, or what you have to spend on transportation, clothes, or food that you otherwise wouldn’t have spent had you not had a job.

For example, my current job pays me $15 an hour. After taxes are taken out, it’s roughly $12 an hour (shoutout to Texas for not having a state income tax). So in an 8 hour day, I make $96 after taxes.

I have a one hour commute in the morning, a 30 minute lunch break, and an hour and a half commute back home in the evening. So my work day really takes up 11 hours. We’re down to $8.73 an hour (96 dollars/11 hours=8.27 dollars per hour).

Now thankfully my commute is always free, thanks to school giving full-time students free public transportation passes and me not owning a car. I also bring my own lunch, so food costs are the same as they would be if I was at home. That means my real hourly wage is right around that $8.73 number.

But let’s imagine that someone drives their car to work which they bought with a loan, and then buys fast food at lunch every day (which is not rare at all, even though it should be). Here’s their made-up stats:

Wage: $25 per hour. After taxes, let’s say $20, so $160 in an 8 hour day.

Commute: 1 hour one-way, 2 hours each day.

Lunch break: 1 hour

Car payment: $350 per month (national average new car payment is $500 *gags*)

Insurance: $100 per month

Gas: $50 per month (they have a really efficient car, good for them)

Lunch: $7 more per day than it would cost if they brought their own lunch. ($10 lunch vs. $3 lunch estimate)

LET’S DO SOME MATH!!

$500 per month transportation costs (car payment, insurance, gas)/20 working days per month= -$25 per working day

Lunch is -$7 per working day

So their real hourly wage is (160–25–7) dollars/11 hours = $11.63 per hour.

This hypothetical person is spending almost half of their after-tax money just on their job. Since we know that money is simply a derivative of time, this means that the first half of their workday is essentially unpaid and wasted time.

Move closer to work, bring a lunch from home, take public transportation, bike, or walk if you can. Pat yourself on the back and enjoy the raise you just gave yourself. #MoneyGoals

)
Greg Mork

Written by

Greg Mork

Personal Finance, Minimalism, Health, Happiness

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade