$70,000 a Year is How Much an Hour?

Income is typically quoted in annual or hourly terms, depending on the type of job. It is helpful to be able to convert an annual income to an hourly rate and vice versa, in order to make appropriate comparisons. This post is written to help answer the question: $70,000 a year is how much an hour?

$70,000 per year is how much per hour?

If someone works 40 hours per week for 52 weeks, that equates to 2,080 hours (40 x 52). This 2,080 hour number is fairly standardized in the US and one can generally divide an annual salary by 2080 to determine the hourly rate. Alternatively, one could multiple an hourly rate by 2080 to determine an annual rate.

If we divide $70,000/year by 2,080 hours, we get $33.65 per hour. In short, 70,000 per year generally equates to $33.65 per hour.

The Longer Answer

How Many Hours Does It Take To Earn $70,000 Per Year?

Although we calculated above that it takes $33.65 an hour to earn $70,000 per year, that assumes a standard workweek of 40 hours a week. Many people work more or less than that.

In the US, “exempt” employees are not typically compensated for working overtime. Therefore, if someone works 50 hours a week rather than 40 hours a week, then the hourly rate drops to $26.92! Alternatively, earning $70,000 per year for 30 hours of work per week equates to an hourly rate of 44.87! Since we are converting from annual to hourly, the most important thing to determine is the number of hours worked per year.

Does $70,000 Per Year Include: Paid Time Off, Holidays, and Vacation Time

A $70,000 annual salary could be higher or lower than $33.65 per hour even with a standard 40-hour workweek, depending on the employers policies. For instance, if the company has 10 paid holidays then there will be 80 fewer hours worked (10 multiplied by 8 hours per day). Consequently, the employee will work 2,000 hours rather than 2,080 hours. $70,000 divided by 2,000 hours equates to $35 an hour.

Many companies allow for paid time off as well, for illness, family leave, bereavement, vacation, and so on. This paid time off could further reduce the number of hours worked, which would further increase the hourly rate. Therefore $70,000 per year could equate to a different hourly rate simply depending on how frequently someone gets sick or other random variables.

When $70,000 Is More Than $70,000

Many companies pay payroll taxes on behalf of their employees, typically 7.65% per year up to a IRS-defined annual limit. This means that employers are typically paying over $5,000 for someone earning $70,000. The employee enjoys this $5,000 savings, as they would have to pay it themselves if they were self-employed.

Depending on the company and job, employees might also be eligible for medical, dental, vision, life, and disability insurance. Employers often subsidize these insurance benefits partially or wholly. Additional benefits may include the ability to pay for commuting, parking, childcare, and other expense on a pre-tax basis. Like the payroll taxes, employees are often receiving more than the headline $70,000 number.

How much is $70,000 a year after taxes?

Perhaps more important than the hourly rate is the after-tax amount. The annual after-tax amount will generally be lower than $70,000 and the hourly after-tax amount will generally be lower than $33.65. But how much tax will there be and what are the after-tax amounts?

There are many websites that calculate and display the after-tax amounts of $70,000 a year or $33.65 per hour. However, these numbers are not necessarily accurate. Each person has a unique tax situation. If one person files their tax return as “single” and the other files as “married, filing jointly,” then the same $70,000 of income will be taxed differently (because the spousal income needs to be considered)!

Even two individuals who earn $70,000 each and each files as single will often have different tax liabilities and different after-tax incomes. The reason is because the two people may have different tax deductions and be eligible for different tax credits.

Additionally, most states collect a state income tax and these tax rates vary widely. However, a number of states do not have a state income tax.

In short, I would NOT rely on a website or article to understand the after-tax amounts, although I might use one of the many online tax calculators that are available (since these can account for deductions and credits) if my tax situation was simple.

How much is $34 an hour annually?

If we round $33.65 to $34, a $34 hourly rate equates to $70,720 per year.

Is $33.65 a good hourly rate? Is $34 a good hourly rate?

These questions are essentially the same as the below question, so I will direct readers there.

Is 70,000 a good salary?

$70,000 per year is an above-average income in the US. According to the Bureau of Labor Statistics (BLS), the median worker income in Q3 2022 was $55,640.

$70,000 is in line with the average household income, since multiple people work in many households. According to the US Census Bureau, the median household income in 2021 was $70,784.

There are regional variations to the above numbers. Working in urban or metropolitan areas generally provides higher incomes and working in rural areas results in lower incomes.

Posted by Matt

Matt is an investor and investment adviser. He is a CFA charterholder and a CAIA charterholder. His writing on this site is purely educational; he will not make recommendations on this site since he does not know individual readers' situations.