How Much is $40,000 a Year Per Hour?

Steve Cummings

How much is 40000 a year per hour

If you make $40,000 per year, you might want to know how much you make per hour. Then, as you trade the hours in your day for money, it helps to know what type of return on investment you’re getting. 

At first glance, $40,000 a year may sound like a lot of money. But, when you break it down into hourly pay, if you work full-time, it’s $18 – $20 an hour.

Is $18 – $20 an hour worth your time, or should you figure out how to make more money?

How to Calculate How Much $40,000 is Per Hour

You must know a few factors to determine how much you make per hour if you earn $40,000 a year.

First, you must determine how many hours you work per week. If you work a standard full-time job, you probably work 40 hours, but you should determine your exact hours. If you work more or less than 40 hours a week, determine your average weekly hours, which is crucial to determine your hourly pay.

Let’s use a full-time example first.

If you work a traditional 40-hour week and get a standard 2-week vacation, you work 40 hours 50 weeks a year or 2,000 hours a year. 

$40,000/2,000 = $20 an hour

However, your hourly pay would increase if you work fewer hours, say it’s a part-time job or side gig. For example, let’s say it takes you 20 hours a week to make $40,000, but you work 52 weeks a year. 

You work 1,040 hours a year and make $38.46 an hour.

But, if you work more than 40 hours a week, your hourly pay decreases if you make $40,000 a year.

You spend 55 hours weekly at your job and make $40,000 a year. Your hourly pay decreases to $13.98 an hour. You may decide this isn’t worth your time since you can likely get a higher-paying job doing something less stressful.

Try to find the ‘sweet spot,’ working as few hours as possible to maximize your hourly pay while still getting your work done.

Determining your Ideal Hourly Wage

As we said earlier, your hourly wage is your return on investment. The investment is your time. You give up your time to make money when you could use that time for something else. It’s called an opportunity cost, and everything we do in life has one.

You choose one task, investment, or job in place of another. The key to determining if $40,000 a year or $18 – $20 is enough for you is to determine if any other job or investment would earn you more than $18 – $20 an hour.

In other words, would you make more money if you gave the same time somewhere else? This is a great way to compare salaried jobs or opportunities that will take your time and have a specific return.

Increasing your Hourly Pay

It’s possible to increase your hourly pay without getting a raise. You can have different hourly pay with the same salary. It depends on how you use your time.

The more efficient you get with your time, the easier it is to make more money per hour doing the same job.

So how do you do this?

Get more efficient at your job. Pay close attention during training, and while you’re on the job, focus on getting faster and more accurate at your tasks. Also, limit distractions. Every distraction is an opportunity cost, lowering your per hour pay.

Also, talk to your employer about opportunities for a raise. You’ll likely have the opportunity for annual reviews, where you might get a raise. However, don’t hesitate to ask for a raise when you feel you deserve it. Make sure you have data and figures to support your reasoning to convince your boss you deserve it.

If you own a business or operate a side hustle, some ways to increase your hourly pay is to outsource tasks that take up too much of your time or set up a routine to get the mundane tasks done when you’re most productive. As a result, you’ll save the most time, work less, and increase your hourly pay.

How to Make $40,000 per Year

As you think about $40,000 a year is how much per hour, you may also wonder how to make $40,000 per year. What jobs pay this salary?

Here are a few examples:

  • Carpenter
  • Equipment operator
  • Electrician
  • Plumber
  • Truck driver
  • Athletic trainer
  • Chef
  • Correctional officer

These jobs start with a $40,000+ salary, but you can always work your way up the ladder to make more money.

How to Make More than $40,000 a Year

If you start at a job that makes $40,000 a year, but want to make more than $20 an hour, here are a few ways.

  • Go back to school for a higher degree
  • Get more training
  • Find out what it takes to get a promotion at your job
  • Start a side hustle

Increasing your Income Outside your Full-Time Job

If, for the time being, you’re stuck at $40,000 a year, and as you find out the answer to how much is $20 an hour, it’s not enough for you, here are some ways to increase your net income outside of your full-time job.

There are many suitable side jobs that you can start to increase that $40,000. You can even work on obtaining extra skills to make you more valuable. Here are a few ideas to help you make some extra income.

Start a Side Hustle

There are thousands of side hustles anyone can start to make more money. You don’t need special skills either. The most effective way to make more money is to use your current skills, but ‘on the side.’

For example, if you’re a carpenter, use your skills for side jobs, charge how much you want per hour, and keep the entire amount. 

You can also use writing, web design, data entry, or bookkeeping skills to make more money. Any online tasks you can do can be listed on sites like Fiverr or Upwork. Both sites are marketplaces for freelancers to advertise their services and get matched with buyers. 

Flip Assets

If freelancing doesn't sound like something you’d enjoy, there are other ways to increase your income that won’t feel like a job.

You can flip assets such as furniture, websites, and even houses.

The key is to buy a product at an undervalued price, fix it up, and sell it for a profit. This is an opportunity cost of your time, so make sure it’s worth it when choosing what to flip.

Work a Gig

Gigs are jobs you can do by downloading an app and making yourself available in your free time. For example, you can work for Uber or Lyft by downloading their app, getting approved (background check and proof you have a car and insurance), and making yourself available in the app.

You choose which jobs you’ll accept and get paid a flat fee plus customer tips. Other gig opportunities include shopping for Instacart and delivering for DoorDash or UberEats. Most platforms work the same, paying contractors a flat fee plus 100% of tips.

Making your Money Work for You

If you want to maximize your earnings without trading your time, you can also make your money work for you.

Passive income greatly adds to your active income and can increase your hourly earnings. Therefore, everyone should have active and passive income streams to maximize their earnings and offset any interruptions in active income.

Passive income opportunities include investing in appreciating assets such as real estate, land, art, cryptocurrency, stocks, or bonds.

If you want more conservative investments or your money to be more liquid, you can invest in CDs, high-yield savings accounts, or ETFs.

Steps to Take First

Before you set up passive income opportunities, though, ask yourself the following questions:

Do you have enough money in an emergency fund? If you don’t have at least three to six months of expenses in a liquid savings account, save that first. If you have an emergency, you can cover it without financial stress.

Have you saved for retirement? Saving for retirement is another form of passive income, but it saves for your future when you retire versus now. Make sure you’ve at least contributed to get the employer’s match or maxed out your IRA.

Final Thoughts – $40,000 a Year is How Much per Hour?

Now that you know how much $40,000 a year is per hour, you may want to consider other options. If you like your job and feel it’s worth your time, find other ways to maximize your per hourly rate.

Adding passive income opportunities is ideal, such as investing in appreciating assets, but finding other ways to increase your income is a good idea too. Active and passive income opportunities together can help you reach your financial goals and make more than $40,000 a year

4 thoughts on “How Much is $40,000 a Year Per Hour?”

  1. It is kinda depressing if you break it down to the hourly pay. I was told at uni with an MA my starting salary would be 25 an hour and then adding the years of work experience to it. $20 per hour is nothing especially not if the employer forces you back into an office in a city where living costs are horrendously out of proportion.

    Carolin | Solo Travel Story

    • When I left Uni, my father said making $30,000 was a good salary. That breaks down to a little less than $15 an hour, and now as I see it more and more jobs are close to that $15 an hour mark and you are right. It is a little depressing. It is hard when costs continue to rise and our rates are not. I think educating ourselves on how much we are worth helps out. If we know we are worth more then we can work on negotiating better pays.


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