This online Real Hourly Wage Calculator will calculate your after-tax, after-work-related-expense income for each hour you allocate to your job.
Whether you realize it or not, your life is a business just like any other business. After all, your life shares the following traits with traditional businesses:
Product: your talents, abilities and skills.
Sales & Marketing: selling your talents, abilities and skills to employers or customers.
Finance & Accounting Department: budgeting and forecasting your household income an expenses, paying accounts payable, etc.
Research and Development: furthering your education and improving your skill set.
Stockholders: Members of your household who stand to gain or lose from your decisions.
In fact, there is really only one major difference between your life business and a traditional business. While traditional businesses are engaged in the pursuit of monetary profits (more revenues than expenses), your life business is engaged in the pursuit of happiness profits (more good feelings than bad feelings), or at least it should be. If you are chasing after monetary profits, it's likely at the expense of your happiness profits. But that's a topic for another discussion.
If you agree that your life is a business, then aside from the obvious question (is your life business successful?), it's important to recognize that revenues (monies received) do not equate to profit. Profit is what's left after all revenue-generating expenses have been deducted. As this relates to your life business, in order to place a profit value on one-hour's worth of your time, you must account for any and all work-related expenses. This is what I call your Real Hourly Wage (RHW).
Knowing your RHW has several benefits. First, knowing your RHW allows you to more accurately compare one revenue generating scenario with another. For example, one opportunity might pay more than the other, but require more gas and commute time.A second, and perhaps the most valuable benefit, is that being fully aware of your RHW will allow you make more prudent buying decisions. That is, if you take the time to calculate how many hours you will need to allocate to working in order to make each purchase. The Real Hourly Wage Calculator on this page will help you to do that as well.
A third benefit is achieved once you've used the Real Hourly Wage Calculator for calculating your RHW -- which shows you that you can increase your RHW simply by trimming the costs associated to your work. These cost-trimming measures might include opting for bag lunches instead of dining out every day, car pooling or public transportation, and so on.
With that, let's use the Real Hourly Wage Calculator to calculate your net-profit for each hour of time allocated to your job or profession.
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Take-home pay per pay period: This is the amount you actually get to deposit into your bank account at the end of each pay period. However, for the purposes of calculating your RHW, you need to add add back the value of any benefits you receive (health care premiums, etc.) and any withheld funds that will be returned to you later (retirement withholdings, etc.).
Number of pay periods per year: The number of times you receive a paycheck per year.
Number of workdays per pay period: The number of days you work between paydays.
Number of paid work-hours per workday: The number of hours you are actually paid for per workday. If you work from 8-5, with a half-hour, unpaid break for lunch, your paid work-hours would be 8.5.
Minutes of unpaid breaks per workday: The average number of minutes of unpaid breaks per workday. If you usually arrive early for work, you would include those minutes as well.
Minutes of work-related commute time per workday: The number of minutes you spend commuting to and from work per workday. The time you spend commuting is time you could be earning money.
Minutes spent getting ready for work per workday: The number of minutes you spend getting ready for work each workday -- minutes you wouldn't have to spend if you worked from home. Also include any minutes spent unwinding once you get home from work.
Number of work-related miles you drive your car per workday: The average number of work-related miles you drive your own car per workday. This would also include any miles driven to and from lunch. The Real Hourly Wage Calculator will calculate your cost at 55-cents per mile (licensing, maintenance, wear and tear on vehicle, depreciation, cost of gasoline, etc.).
Other work-related transportation costs per workday: Any other work-related transportation costs per workday, such as fares, parking fees and tolls.
Your share of daycare expenses per pay period: Your share of daycare costs per pay period if both spouses work. Or, enter the entire daycare cost if you are single or if quitting work would mean you would have no daycare costs.
Dining out expense per workday: The average amount you spend on work-related dining-out per workday. Be sure to include the tips! The Real Hourly Wage Calculator will compute costs at 66% of the total entered. You still have to eat, but on average the you will pay 3-times the cost of the actual food you when dine out. The average food costs for a restaurant runs around 33% of sales (lower for breakfast, higher for steak and seafood).
Unreimbursed work-related clothing expenses per month: The average amount spent on non-reimbursed, work-related clothing per month. This would include any dry-cleaning costs that might apply.
Union Dues per pay period: Any union or professional dues that you must pay per pay period to maintain your employment.
Office gifts per month: The average amount you spend each month on work-related gifts, office parties, etc..
Monthly take home: This amount is calculated by multiplying your take-home per pay period by the number of pay periods per year, then divided by 12.
Monthly work-related expenses: This amount is the total of all of your monthly work-related expenses.
Monthly net-profit: This amount is what is left after subtracting your monthly work-related expenses from your monthly take-home pay.
Monthly work-related hours: The total number of hours you are allocating to work on a monthly basis.
Real Hourly Wage (RHW): The result you get when you divide your monthly net profit by the number of hours you are allocating to work each month.
Work-hours required for expenditure: The dollar amount of the expenditure divided by your RHW. The result represents how many hours you will need to allocate to working in order to pay for a given expenditure. Remember, many price tags come with multiple hidden costs and fees. For example, the price tag of an automobile does not include sales taxes, licenses, insurance, maintenance and repairs, depreciation, gasoline, storage (garage), or finance charges. So in order to get an accurate number of work hours required, you would need to tabulate all the costs of the expenditure, not just the amount on the price tag.