What Is Your Real Hourly Wage?

How much money do you make for the amount of time you work?  You know that your salary is “x” amount and a typical workweek is 35 to 40 hours.  Discover for yourself the real trade-off in time, energy and monetary expenses that are directly associated with your job.


Whether you drive, walk or take public transportation, getting to and from work incurs an expenditure of time or money, or both.  What is your commuting time?  Calculate how much money you spend on a bus pass, walking shoes, gas, parking, tolls, traffic tickets, and car (and bike) maintenance.


Are the clothes you wear at work the same as you wear on your days off – or do you need a special wardrobe to be appropriately attired?  This includes not only the obvious outfits like nurses’ uniforms, construction workers’ steel-toed boots and chefs’ aprons, but also the tailored suits, ties, shoes and accessories that are the norm in offices.

Consider the time and money spent on shopping and personal grooming activities.  Don’t forget dry cleaning, tailoring and other clothing maintenance.


Extra costs for meals take many forms – money for morning coffee and doughnuts (not to mention the time spent in line at the Tim’s takeout window), daily lunches, drinks after work with your co-workers, and expensive convenience foods that you buy because you are too tired to cook dinner.


When you come home from work are you ready to jump into your personal projects or share family time?  Or are you tired and drained and need to veg out in front of the TV for a few hours with a drink in hand.

Job-Related Illness:

What percentage of illness is job-related –  induced by stress, physical working conditions or conflict with employers or fellow employees?  There is a lot less illness-caused absenteeism in volunteers than in paid employees.  Think of the time spent waiting in the doctor’s office and the money spent on drugs and remedies not covered by insurance.

Other Expenses:

Childcare expenses (day-care, babysitter or nanny) take a big chunk out of your salary.  Do you have a housekeeper or hire a cleaning service? What about the hours spent reading work related material, upgrading, going to seminars and conferences, and spending evenings networking for business.

Don’t overlook expenses such as educational programs, books and tools.

The Bottom Line

Calculate the hours you spend on work related activities – what you wouldn’t do if you were not working – and add them to your normal workweek.  Then subtract all your job related expenses from your salary to come up with your real hourly wage.

What if you discover that you’re actually making six bucks an hour?  Are you willing to accept that?  Knowing the financial bottom line for your job will help you clarify your earnings.

You can reduce or eliminate your expenses by bringing your own lunch, using transit instead of driving and rethinking your clothing needs.  You can decide whether it’s worthwhile for a parent to stay at home with the children.  You can use the results as criteria for accepting or rejecting a job offers when you can see clearly what they are worth and perhaps accept a job that you wouldn’t have previously considered.

It’s an interesting exercise to do.  How much are you really earning?

Print Friendly, PDF & Email


  1. Steve @ Grocery Alerts on November 24, 2011 at 1:04 am

    This is a great question everyone should ask about their current job.

    What is important to you and for your job sanity each day.

  2. David Leonhardt on November 24, 2011 at 8:17 am

    Woo-hoo! Let’s hear it for working from home!

    No commuting.
    No clothing budget.
    No extra meals cost.

  3. John on November 24, 2011 at 8:46 am

    This concept is well discussed in the book “Your Money or Your Life”, a classic, especially as it discusses the concept of time = money and time = life energy.

    CHeck out the free workbook to help you figure out your “real” hourly wage here:


    Great blog!

  4. Michael James on November 24, 2011 at 10:00 am

    Nice post. It’s important to understand your real hourly wage after taxes and all the other considerations you mention. Sadly, I’ve known some women who worked for a negative wage. (Of course, this can happen to men as well, but I don’t know of any examples.) Working for a negative wage can still make sense if getting out of the house is needed for sanity, but it is sad when the woman doesn’t really want to work but thinks she is helping the family finances.

  5. Bill on November 24, 2011 at 11:17 am

    If you work as an employee for a company that provides health and medical benefits, pension contribution matching, etc. etc., your salary is not the “x” amount on your pay stub. It is “x” + the value of any benefits. You could even argue the employers CPP portion is a benefit to you as well.

    So I guess you can say employees have a base salary and a loaded salary.

  6. T.M @ My University Money on November 24, 2011 at 8:51 pm

    Definitely some overlooked costs of working. The teaching profession is extremely unique in this regard. There are many teachers who take a lot of sick days, work the bare minimum of hours, and don’t volunteer for anything. These teachers would make a very enviable per-hour wage. However, there are also many other teachers who are likely in your $6-$10 category when you include prep, marking, coaching, field trips etc. I figure most years I put in around 500 hours of coaching time easily.

  7. KC @ PsychoMoney on November 26, 2011 at 7:57 am

    Great, there is so much more to a job than just how much you make. These are great questions people should really be asking themselves.

  8. 101 Centavos on November 27, 2011 at 10:13 am

    That’s one of the hidden costs of a particular job, the requirement to wear formal or even business casual attire. Good catch.

  9. youngandthrifty on November 27, 2011 at 10:29 am

    I know someone who has RETIRED already and receives a hefty pension (probably $4000+ monthly).

    She still works twice a week and knows very well that she will be taxed two the nines but she says she doesn’t mind working for $10 an hour.

    She said she doesn’t want to be around her husband all the time LOL.

  10. RC Thompson on November 27, 2011 at 10:54 am

    This is a great article and brings up some good points. I never really thought of the ‘illness’ factor before. Now that you mention it, makes total sense. You definitely should consider all of these factors when calculating your hourly. Damn….I just did mine 🙁

  11. Paula @ Afford Anything on November 28, 2011 at 3:31 pm

    I wrote a blog post about this exact topic recently, using an example of a woman who wakes up, gets ready for work, commutes there, comes home tired, zones out in front of the TV for half an hour, etc. If you could all of it as work time, she’s not making very much per hour.

    If you don’t mind me posting a link (I’m not trying to be spammy, I promise! I geniunely think this might add to the conversation) here’s a synopsis of what someone “really” earns: http://afford-anything.com/2011/10/10/how-much-does-she-earn/

Leave a Comment

Join More Than 10,000 Subscribers!

Sign up now and get our free e-Book- Financial Management by the Decade - plus new financial tips and money stories delivered to your inbox every week.