How does $42,000 per year sound to your ears? Does it seem like a decent wage or insufficient compensation for all those upcoming hours of hard work?
When getting down to the basics, $42000 a year is how much an hour? And will it be enough for you and your family?
Salary expectations vary significantly from person to person as everyone has their own set of particular needs and expenses.
So let’s review all the details and see how everything breaks down.
How much is $42,000 a year per hour?
Working 40 hours per week, the breakdown of $42,000 a year comes down to $20.19 per hour.
This calculation is based on all individuals who work 40 hours a week and 52 weeks a year.
Let’s take a deeper look at how $42,000 per year breaks down:
- $42,000 annual salary ÷ 2080 hours annually = $20.19 hourly wage
- $20.19 per hour x 8 hours = $161.52 per day
- $153.84 per day x 5 days = $807.60 weekly per paycheck
If you work more or less than 40 hours per week, you can divide your annual salary by the number of hours per year you are working.
Many people work 37.5 hours per week, which would give an hourly salary of $21.53 provided they were also working 52 weeks per year.
$42,000 a year is how much per month?
Suppose you get paid on a semi-monthly basis; you will end up with 24 paychecks per year. Individuals who get paid biweekly can expect 26 paychecks per year.
If you are fortunate to get paid vacation time (PTO), you can divide the $42,000 by the number of weeks you are working.
- Your hourly rate will be $20.58 per hour if you have one week of paid time off (PTO) every year.
- Your hourly rate will be $21 per hour if you have two weeks of paid time off (PTO) every year.
- Your hourly rate will be $21.42 per hour if you have three weeks of paid time off (PTO) every year.
- Your hourly rate will be $21.87 per hour if you have four weeks of paid time off (PTO) every year.
$42000 a year is how much after taxes?
Your paycheck is not just subject to the federal taxes we pay; most states also levy their own income taxes. Some states even levy local taxes.
Did you know there are only nine US states which do not have an income tax?
- New Hampshire
- South Dakota
Although New Hampshire makes the above list, you can still expect to be taxed on any investment income you get from dividends or interest.
What can residents expect to receive from $42000 after tax?
If we use a tax income calculator which accounts for Federal taxes, State taxes, Social Security, and Medicare contributions, the after-tax take-home pay tends to land between $32,253 to $35,452.
If we break that down into common payroll frequencies;
- Weekly paycheck = $620.25 to $681.76
- Semi-monthly paycheck = $1343.87 to $1477.16
- Biweekly paycheck = $1240.50 to $1363.53
- Monthly paycheck = $2687.75 to $2954.33
The disparities in taxes and deductions can significantly differ in take-home wages. These differences can amount to just upwards of three thousand dollars per year or $267 per month.
Now it’s important to remember that the above figures can vary, as seventeen different states also levy local taxes. Those states are the following;
- New Jersey
- New York
- West Virginia
Is $42,000 a good salary?
While this answer is subjective to each person’s individual needs and views on the matter, in my opinion, a 42k yearly salary is a reasonable starting wage.
In 2018, the median income for a two-person household was $67,277, and for three people, $78,835. So if both family members are each earning a $42000 salary, you would still be above the median household income.
But again, these numbers are subjective; what works for one person’s household may not work for your own. Your level of comfort may differ from my own.
You should consider your state’s taxes, the cost of living in your hometown, and how large or small you would like to live. You should also consider any family-specific expenses that can impact your budget.
But remember, almost all salaries can be stretched with a reasonable budget in place.
Monthly Budget for $42,000 Salary
While $42,000 per year may not seem like a lot to work with at first, it’s often entirely manageable.
Below you will find a sample budget for a single-person household. In our example, we will be using a monthly income of $2790.42 (after taxes).
As states taxes and living costs vary widely between the 50 states and countless towns, you can adjust the budget to your particular circumstances.
- Car payment = $200 (car lease starting at $169 per month (with cash down)
- Car insurance = $145, the average cost is roughly $139.50 per month
- Cellphone = $20, mintmobile really has the lowest mobile data plans.
- Entertainment = $100
- Gas = $120
- Groceries = $150
- Health Insurance = $225
- Home insurance = $140
- Internet = $50
- Miscellanous = $100
- Personal expenses = $100
- Rent or Mortgage = Up to $930.14 (which represents a third of your income)
- Savings = $279 (10%)
- Utilities = $225
For a total of $2784.14, leaving $6.28 unassigned.
I’ve always found the best way to find some quick wins is to take a couple of hours to review your banking statements to discover all those little expenses that are eating away at your wallet.
About the author
Clara is the founder of Blue World Dreams, an entrepreneur & budget-savvy personal finance expert. She’s invested in helping others attain financial freedom using her knowledge from running a successful seven-figure corporation and building an extensive and diverse investment portfolio. Find out more.