Do you want to know how much $109,000 a year is per hour? Perhaps you've been offered a position with this salary, but you're not sure if it will be enough.
Everyone has a different outlook on life and has individual goals and ambitions. The question we are posing is if earning 109k a year is good. If you are at the end of your career or just beginning you will have a different perspective.
The Bureau of Labor Statistics (BLS) states that the median weekly income in the United States is $1,085. That is just over $27 an hour, and just over $56,000 a year.
Is $109,000 a good salary? That is dependent on a few factors that derive your cost of living. If you live in a high-cost-of-living area and are living at your parent’s place your situation varies greatly from another person who has a large family and is living in rural Arkansas.
It’s called personal finance for a reason. It’s personal.
Let’s do some quick math here. If you work a 40-hour work week with no paid time off (PTO), you work 2080 hours a year.
$109,000 / 2080 = $52 an hour
That means you’ll be making $52 an hour if you make $109,000 a year and have no paid time off.
Now, what if you have a salaried position with two weeks of paid vacation time each year? That means that you are working 2000 hours a year, and increases your hourly rate.
$109,000 / 2000 = $54 an hour
That comes out to exactly $54 an hour if you get 2 weeks of paid vacation each year. That makes for easy math if you want to calculate the number of hours of work until you can afford to buy another share of NFLX or more BTC.
If you are getting paid monthly then you will have 12 pay periods in a year. That means that to calculate how much 109k a year is per month you will need to divide 109k by 12.
$109,000 / 12 = $9083 per month
That means that every month before taxes you will be bringing $9083 in gross pay. That’s a fair amount of money. After taxes that amount could be between $6358 - $7720. Depending on your unique circumstances, you could even have money to invest each month.
Roughly, if you make a yearly salary of $109,000 you will need to pay between $17.44k to $26.16k in taxes. Let’s be conservative and estimate based on the higher taxes of $26.16k. We are also going to assume that you get two weeks of paid vacation per year.
($109,000 - $26160) / 2080 = $39 an hour
That means that after taxes you will have an hourly wage of $39, which is above the minimum wage. If you know the tax rates for your state and your circumstances you can modify the equation above to determine what your hourly pay is after taxes.
That depends on how frequently you get paid, and what state taxes and federal taxes you are liable for. Here are some rough calculations for a few varying cases.
($109,000 - $17440) / 52 = $1760 per paycheck
($109,000 - $26160) / 52 = $1593 per paycheck
If you have weekly pay, you could get a check for $1593 - $1760, depending on your tax liabilities.
Now, what if you get paid biweekly? We can quickly do the math by dividing the total amount paid minus taxes by the number of biweekly pay periods in a year.
($109,000 - $17440) / 26 = $3521 per paycheck
($109,000 - $26160) / 26 = $3186 per paycheck
If you get paid biweekly, you could get a check for $3186 - $3521, it all depends on how much taxes you owe the government.
Hey, I don’t get paid weekly, or biweekly. I get paid twice a month, now what?
We can also do the math for getting paid twice a month.
($109,000 - $17440) / 24 = $3815 per paycheck
($109,000 - $26160) / 24 = $3451 per paycheck
When you get paid twice a month, you’ll see that you could get a paycheck of anywhere between $3451 - $3815. Again this is all dependent upon your tax liabilities.
This breakdown of a $109,000 annual salary is based on the calculations we made above. It is using simple tax scenarios. You will want to use your own tax numbers to determine your specific scenario.
|$109,000 a Year||Income|
|Estimated After-Tax Hourly Pay||$39|
|Estimated After-Tax Monthly Pay||$6903|
Yes. if you are making $109,000 a year you are making the average salary in the US. If you are living in a low-cost-of-living area you will be able to stretch your dollars even further. You probably won’t be buying a mansion, but the average person making $218000 a year won’t be either.
The most important factor with any salary is to budget, invest and spend within your means. If you avoid bad debt, your dollars will stretch even further and be able to be put to work.
The latest reported median household income for Americans was $70,784. All types of households are included in that figure meaning if there are five wage earners or one in a household they were all included.
Let’s take for example if in your household there is one earner making $109k a year, then you would fall above the median income for a household.
if in your household there are two earners that both are making $109,000 a year at your full-time job, the income of your household is $218000. At that level of income, your household is higher than the median household income.
Just in case you are worried about what your budget would look like, I want to provide you with an example.
The important thing to note for this sample budget is that it is based on the high end of the monthly take-home range at $7720. It also assumes that you are a single adult. If these numbers don’t work for you, feel free to change them up and let me know what you did!
|Category||$$$||% of Monthly Income|
|Mortgage / Rent||$2997||33%|
|Entertainment / Fun||$454||5%|
|Personal / Misc||$454||5%|
With the monthly budget above, there was an excess of $7720 - $7471 = $249. That extra money every month you could put towards investments, paying off debts, or living large. The example above was for a single person, but if your circumstances are different feel free to change the numbers to better fit your needs.
You should save as much as you possibly can. You should save until it hurts, and then back up off the gas a little bit.
In the budget provided above, I showed a sample of saving 15% a month. That seems fairly doable if you are a single person. Now, if you are raising a family that might make things more difficult. I would recommend saving what you think is comfortable right now. Then next month find one area in your life that you can cut back on. Keep repeating that process until you find out what you need, and what you don’t. It will surprise you!
If you are receiving an annual pay of $109k, you will be getting a monthly payment of around $7720 net pay. Most people, myself included, recommend spending no more than one-third of your income on housing. That would mean that you can afford $7720 / 3 = $2997.
Personally, if your life circumstances allow it and you are comfortable with it I would look into buying over renting. Now I know that all the digital nomads and the majority of the financial independence community will squawk at this. However, real estate is a solid investment strategy that has stood the test of time. According to Andrew Carnegie, “Ninety percent of all millionaires became so through owning real estate. More money has been made in real estate than in all industrial investments combined.”
I also know that your primary residence shouldn’t count as an investment, but owning one home makes it much easier to buy another and another and another. Pretty soon your average income from real estate could surpass your hourly salary and allow you more financial freedom.
There are a ton of places where you can live on a $109k income level and live a comfortable life. Your dollars will stretch much further if you avoid certain parts of the country like most coastal and larger metropolitan areas of the United States (San Francisco, New York City, etc).
Here is a list of five cities in the US worth mentioning (in no particular order):
As for places to live outside the US, the world is your oyster. There are dozens of countries where 109k US dollars a year would afford you an amazing lifestyle. Here are a few:
In the end, it depends on what matters most to you. Write down a list and work backward from there. If you want to be close to friends and family, then that helps you narrow down your list of where you want to live. If you want to have lively nightlife, that helps narrow down your search as well.
Yes! You can invest while making any salary and $109,000 is no different. I would recommend investing at any and every stage of your life. If your dollars aren’t working for you, they are working for someone else.
Start out investing what you feel comfortable with and go from there. Look into all of your investing potentials and do your own research. You will be amazed at how many options are out there to invest in.
Making $109,000 a year, your biweekly salary is $4192. You can find your biweekly salary by dividing your yearly income by 26. In this case, the equation would be $109,000 / 26 = $4192 per biweek.
Making $109,000 a year, your weekly salary is $2096. You can find your weekly salary by dividing your yearly income by 52. In this case, the equation would be $109,000 / 52 = $2096 per week.
A salary of $109,000 a year, means that your net monthly salary is approximately $7720. Just like rent, your mortgage payment should be a maximum of one-third of your income. In this case, we are working with $2997.
Yes! You can most definitely buy a house on $109,000 a year. There are so many ways to buy a house so nothing should be stopping you. I would recommend not spending more than one-third of your monthly income on housing expenses, which in this case would be $2997.
There is an assortment of loan products currently available to people looking to buy a house. Using an FHA loan for example you can put down as low as 3.5% of the purchase price. Plus there are strategies like house hacking that can help bring your housing expenses down, and some people can make a profit!
You can afford pretty much anything in moderation. You can afford to spend a ton on Amazon each month or have a cool car with a payment that goes along with it, but probably not both. You can afford to invest each month and it should be one of your highest priorities.
If you are worried about what you can afford, I would look into increasing your income through a side hustle. It’s easier to afford things when you have more money to use.
Yes, it is possible to live off $109,000 a year, but your comfort depends on your location and lifestyle. $109k a year in a lower-cost-of-living area will go much further than in high-cost-of-living areas like New York or San Francisco.
Yes, for a single person, $109k is a good salary. When you are single you typically have fewer expenses than if you are providing for others. With that being said, you can stretch your dollars even further if you are investing, living in a low-cost-of-living area, or keeping a tight budget.
Depending on where you live $109k can be a good salary for a family. The larger your family is, the harder it will be to provide for your family with a salary of $109,000.
According to the USDA, it costs $16,739 a year to raise a child. That can quickly eat into a salary of $109,000. However, if you and your partner both brought in $109k a year, that would double your household income to $218000 a year and that provides more breathing room.
Yes, for a couple with no children, 109k is a good salary. Your dollars will go much further if you live in a rural area vs living in a high-cost-of-living area. If you live in San Francisco you will probably need roommates, while living in rural Colorado you may be able to rent an entire home.
If both of you work and bring in a total of $109k a year, that means you are making close to the national minimum wage, and looking for a new job could drastically increase your household income or help you work fewer hours.
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