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You might know how much you earn in a year – but how does that breakdown into hourly pay?
Perhaps you’ve recently been given a job offer for $40,000 per year and want to compare it to other vacancies you’ve seen.
Or, perhaps you’re curious as to how your current salary measures up against the rest of the working population.
Regardless, it’s wise to bring some awareness as to how your own salary compares to your peers and the median earnings of your country as a whole.
Whether this information prompts you to take action, breathe easier, or start job hunting to raise your income is entirely up to you! Find out how a $50k yearly salary compares to 40k. How about 15k, at the other end of the scale?
In this article, we’ve covered how $40,000 annually breaks down hourly, daily, weekly, and monthly, plus the key question: Is $40k A Year A Good Salary?
How Much Is $40000 AN Hour?
An annual salary of $40,000 would result in an hourly rate of approximately $19.23 for someone working 40 hours per week. Your net income per hour, however, would be subject to deductions such as taxes, social security, and Medicare.
You might be interested to know that rounding that hourly rate up to $20 an hour would give you an approximate annual salary of $41,600.
$40000 a year is $19.23 an hour, assuming you work an average 5-day, 8-hour work week totaling 40 hours per week in total. This annual salary is below the median income for US workers, although location, gender, race, and age can all affect whether or not this is an above or below-average salary.
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How Much Is 40k Annually A Day?
You might know how much you expect to bring in per year – but how does this break down per day?
This can be handy information to know how much value your work days hold, and for if you were to ever move into a contract role in the future.
An annual salary of $40,000 would result in a daily rate of approximately $153.85 for someone working 40 hours per week, based on a standard 5-day workweek.
How Much Is 40k Annually A Week?
So you know how much you’re earning per hour and per day, but what about per week?
An annual salary of $40,000 would result in a gross income of approximately $769.23 per week for someone working 40 hours per week, based on a 52-week year.
These calculations assume that any annual leave you are entitled to with your employer is paid. If you are required to take unpaid leave, then you will obviously earn less overall.
How Much Is 40k Annually Bi-Weekly?
Many people are paid weekly or bi-weekly – which is why we created our super popular budgeting plan for weekly pay.
An annual salary of $40,000 would result in a gross income of approximately $1,538.46 per pay period for someone working 40 hours per week, based on a bi-weekly pay schedule.
How Much Is 40k Annually A Month?
An annual salary of $40,000 breaks down to $3,333.33 per month for someone working 40 hours per week.
Of course, after taxes the actual amount to make it into your bank account would be less.
Read next: How to save $5,000 in one year with this free printable Ultimate Savings Challenge
40k A Year Is How Much An Hour: Chart
| Time Period | Gross Income | Net Income (Estimate) |
| Hourly (40 hrs/wk) | $19.23 | $14.50 |
| Daily (5 days/wk) | $153.85 | $115.39 |
| Weekly (52 wks/yr) | $769.23 | $576.92 |
| Bi-Weekly | $1,538.46 | $1,153.85 |
| Monthly | $3,333.33 | $2,500.00 |
Note that the net income estimates are based on a generic tax rate and other deductions and may vary depending on individual circumstances.
What Tax Would I Pay On $40,000 A Year?
If you earn a $40,000 annual salary working full-time in the US, you can expect to pay federal income taxes, state income taxes (if applicable), Social Security taxes, and Medicare taxes.
The exact amount of taxes you pay will depend on several factors, such as your tax filing status, deductions, and credits.
As a general estimate, assuming you file as a single filer and take the standard deduction, you would pay approximately $3,015 in federal income taxes, $1,408 in Social Security taxes, and $329 in Medicare taxes, for a total of $4,752 in federal payroll taxes.
State income tax rates vary by state, but as an example, someone living in California would pay an additional $1,598 in state income taxes.
Keep in mind that these are just rough estimates, and your actual tax liability may vary depending on your specific situation.
Is $40000 a year a good salary?
The overall median income for all households was $69,717 when last analyzed by the US Census Bureau. This means that roughly half of US households earn less than this figure, and half earn more. The average salary was estimated to be $60, 575.
In broad terms, $40,000 per year would be considered a below-average salary in the US. However, this is not taking into account location, age, gender, or a myriad of other contributing factors. That includes your industry and your qualifications.
We need to look into the question deeper than the surface level. Whether 40k is a good salary for you specifically depends on your circumstances.
$40,000 Per Year: Gender Pay Gaps
For example, the median earnings for women are $36,726 – which means any woman earning $40,000 is actually earning above average for women across the US.
In contrast, the gender pay gap persists – men’s median earnings are $50,391, so a $40,000 annual salary would be considered below average.
Is $40,000 A Good Wage For Your Age?
The measure of whether your salary can be considered good or not depends largely on your age.
Someone at the beginning of their career cannot expect necessarily expect to be earning the same amount as someone who has 20 years of experience behind them.
Here are the median earnings in the US broken down by age:
- 15 – 24 years old: $38,164
- 25 – 44 years old: $77,338
- 45 to 64 years old: $83,812
- 65+: $50,969
Someone under 24 years old and earning $40,000 per year, then, can be considered to be above average.
Someone 25 – 64 years old, however, would be below average if earning $40,000.
$40,000 A Year By State
Perhaps the most crucial measure of whether your $40,000 paycheck measures up against the masses is depending on where in the US you live.
In 20 states and in the District of Columbia, a $40,000 annual salary would be below the annual median earnings of the rest of the population (over 16 and earning) in that state. In the District of Columbia where the median earnings are highest at $72,457, for example, your $40,000 may not seem quite so lavish.
On the other hand, if you were based in any of the remaining states, you would be considered to be above average in earnings on $40,000 per year.
You can see the full breakdown of median earnings by state below to measure up just how good this salary would be based on where you live.
| State | Median Earnings (2021) |
| District of Columbia | 72,457 |
| Massachusetts | 50,683 |
| Maryland | 50,548 |
| New Jersey | 50,021 |
| Washington | 46,951 |
| New Hampshire | 45,677 |
| Connecticut | 45,511 |
| Colorado | 44,818 |
| Virginia | 43,963 |
| Minnesota | 43,853 |
| New York | 43,462 |
| Alaska | 41,962 |
| California | 41,891 |
| Rhode Island | 41,891 |
| Illinois | 41,504 |
| Delaware | 41,374 |
| Pennsylvania | 40,983 |
| Wisconsin | 40,678 |
| Hawaii | 40,595 |
| Vermont | 40,249 |
| Oregon | 40,063 |
| Maine | 39,725 |
| North Dakota | 39,438 |
| Iowa | 39,068 |
| Arizona | 39,023 |
| Nebraska | 38,898 |
| Ohio | 38,214 |
| Kansas | 38,071 |
| Texas | 38,059 |
| Indiana | 37,998 |
| Georgia | 37,512 |
| Utah | 37,325 |
| Michigan | 37,258 |
| North Carolina | 37,218 |
| South Dakota | 37,149 |
| Missouri | 37,083 |
| Nevada | 37,052 |
| Tennessee | 36,663 |
| Florida | 35,997 |
| South Carolina | 35,987 |
| Wyoming | 35,613 |
| Montana | 35,272 |
| Idaho | 34,941 |
| Kentucky | 34,928 |
| Alabama | 34,925 |
| Louisiana | 34,896 |
| Oklahoma | 34,460 |
| New Mexico | 34,133 |
| Arkansas | 33,869 |
| West Virginia | 33,739 |
| Mississippi | 32,242 |
| Puerto Rico | 17,843 |
Can You Live On $40,000? How?
With the knowledge that the median US salary is over $20,000 more than a $40k annual salary, the concept of living on this salary might be daunting.
However, many US workers get by on much less than $40,000 – and without feeling like they are struggling, either.
Of course, your location and the overall cost of living is going to have a huge impact on how easy it is to live on your $40,000 salary – but we can confidently say that it’s not impossible to live a good life on a $40,000 salary.
Here are a few key personal finance tips to help you form those crucial good money habits that will help you get by:
- Be aware of what you spend and where: Use the budgets below to help you achieve an understanding of how much money goes into what expenses, and what areas you might want to consider reigning in.
- Make paying yourself first a habit: On this salary, you might find yourself living paycheck to paycheck each month with no real emergency fund or savings if you’re not careful. Set up a direct deposit to pay into your savings account before you do anything else.
- Cut down on money drains: Learn what easy, quick fixes you can implement to save money and live more frugally here.
Jobs That Pay $40,000 Per Year On Average
According to the Bureau of Labor Statistics, there are over 200 jobs that have an average median pay of $40,000 or more. These include:
- Admissions Coordinator: Admissions coordinators work in a wide variety of industries, including health care, education, and child care.
- Reporters: Reporters earn an average salary of just over $40k – however, this of course depends on the outlet they are working for.
- Copywriters: Working within the creative team in marketing departments, copywriters are responsible for creating copy for online platforms, marketing materials, and more. Junior copywriters tend to earn within the $40k range.
- Firefighters: Firefighters have an average salary of $45,000, according to Indeed.
- Junior Accountants: Assist senior accountants with the financial operations of the company.
- Property Managers: Oversee daily operations of residential or commercial properties.
- Community Managers: Manage online communities and social media channels for companies, organizations, or individuals.
- Massage Therapists: Provide therapeutic massages to clients to help them relax and reduce pain.
- Paralegals: Assist lawyers with various legal tasks.
Sample Budgets for $40,000 Per Year
When addressing whether $40,000 is a good salary, beyond your location or industry, this question can also be answered based on your circumstances. A single person earning $40,000 may find they can live a somewhat lavish lifestyle on this sum.
A family of three relying solely on this income, however, may find themselves struggling.
Below we’ve created some sample budgets for a $40k annual salary to give you a feel for how your expenses might break down depending on your circumstances.
Note that these budgets are meant to be examples and can be adjusted based on individual circumstances. Additionally, these budgets do not include all potential expenses and may vary depending on location and other factors.
Sample Budget for Single Person Earning $40,000 per year
| Category | Monthly Amount |
| Gross Monthly Income | $3,333.33 |
| Net Monthly Income | $2,500.00 |
| Rent/Mortgage | $800 |
| Utilities | $150 |
| Groceries | $250 |
| Transportation | $250 |
| Health Insurance | $200 |
| Personal Expenses | $250 |
| Savings/Emergency Fund | $500 |
| Total Expenses | $2,550.00 |
| Remaining | $100.00 |
Sample Budget for Family of Three Earning $40,000 per year
In the below budget, there is an overall shortfall of $1,000.
If one of you is not working in order to look after your child, then you could consider removing the $500 childcare expense, leaving a shortfall of just $500 each month – which may be supplemented with a side hustle or alternative source of income.
| Category | Monthly Amount |
| Gross Monthly Income | $3,333.33 |
| Net Monthly Income | $2,500.00 |
| Rent/Mortgage | $1,000 |
| Utilities | $250 |
| Groceries | $500 |
| Transportation | $300 |
| Health Insurance | $400 |
| Childcare | $500 |
| Personal Expenses | $250 |
| Savings/Emergency Fund | $300 |
| Total Expenses | $3,500.00 |
| Shortfall | -$1,000.00 |
FAQs
The answer to this question depends on many factors, such as your location, lifestyle, and personal financial goals. In some areas, a $40,000 salary may be considered above average, while in other areas it may be more difficult to make ends meet.
Ultimately, what is considered a good salary is subjective to you and varies from person to person.
It may be possible to buy a house on a $40,000 salary, depending on the cost of living in your area, your credit score, and other factors.
However, it may be more difficult to qualify for a mortgage and find a house within your budget.
As with any age group, what is considered a good salary for Gen Z depends on individual circumstances.
A $40,000 salary may be sufficient for a single person with few expenses, but may not be enough to support a family or cover high living costs in certain areas. It’s important for individuals to assess their financial goals and expenses to determine whether a $40,000 salary is adequate for their needs.
Overall though, based on the data from the Census Bureau, $40,000 would be a good starting salary for Gen Z’ers.
Again, the answer to this question depends on many factors.
A $40,000 salary may be enough to cover basic living expenses, such as housing, food, and transportation, but may not leave much room for discretionary spending or saving for the future. It’s important to create a budget and live within your means to ensure you can live comfortably and achieve your financial goals.
It is possible to save for retirement on a $40,000 salary, but it may require some sacrifices and careful planning.
It’s recommended to contribute at least 10-15% of your income to retirement savings each year, which may require cutting back on discretionary spending and finding ways to increase your income.
It’s important to start saving for retirement as early as possible and take advantage of employer-sponsored retirement plans and other tax-advantaged savings accounts.