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What's your time actually worth?
Your stated salary divided by your stated hours is one number. Once you factor in taxes, commute time, and the costs of working, the real number is often half of that.
Your job
Annual salary$75,000
Hours per week40
Effective tax rate28%
Federal + state + FICA combined. ~22–30% covers most US workers.
The hidden costs
Daily commute (round trip)60 min
Commute cost$400/mo
Gas, parking, public transit, or estimated car wear.
Work expenses$400/mo
Work clothing, dry cleaning, lunches, coffee, etc.
What you actually make per hour
What you think you make
$37.50/hr
Salary ÷ contracted hours
What you actually make
$19.73/hr
After taxes, commute, and work costs
The hidden cut
−47%
That's $17.77/hr going to taxes, commute, and the cost of working — money and time you don't see on your pay stub.
Where every $1 of your "stated" wage actually goes
53¢ What you actually keep
28¢ Taxes
13¢ Commute (cost + unpaid time)
6¢ Work expenses
If you worked fully remote
$24.60/hr
Same job, no commute. True hourly jumps +$4.87/hr — that's 25% more for the same effort. Plus you reclaim 250 hours/year of your life.
If you got a $10,000 raise
$22.93/hr
Sounds huge, but after taxes your true hourly only climbs +$3.20/hr. The same commute, the same costs, just slightly more taxable pay. Remote work usually beats a raise.
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Why this matters
Most decisions you make about your time happen unconsciously. Is this commute worth it? Should I order takeout? Should I take the higher-paying job 30 minutes further away? The "stated wage" your job advertises is the wrong number to use. Your true hourly is what your time is actually worth — and it's often half what you think. Once you know this number, every spending decision gets clearer.
Know what your time is worth
Canopy shows you where every hour goes.
Connect your accounts and Canopy tracks your take-home, your work-related spending, and your discretionary money — so you know exactly which expenses are worth the hours.
Try Canopy free →Common questions
Where does the 28% tax rate come from?+
It's a reasonable default for the U.S. middle class. Your "effective tax rate" combines federal income tax, state income tax, and FICA (Social Security + Medicare, 7.65%). For someone earning $75,000 in a moderate-tax state, total effective is usually 24–30%. Higher earners in California or New York can hit 35–40%. Use a real number from your last pay stub if you want precision: divide total taxes withheld by gross pay.
Why include commute time as work hours?+
Because it is. You're not free during your commute — you're getting yourself to a place where you can earn money. If you didn't have the job, you wouldn't be in the car. The hours are spent in service of the job, so dividing your annual net pay across them gives you the honest picture of what each hour of "work time" actually pays. This is the framing from Your Money or Your Life (Vicki Robin) and Mr. Money Mustache — it's the standard way of computing real-hourly in the FIRE community.
Am I really making half of what I thought?+
For most people with a typical commute and standard tax rate, yes — and that's normal. A 40–50% gap between stated and true hourly is typical for office workers. It doesn't mean your job is bad; it means the sticker number on your offer letter isn't what you actually take home per hour of your life. Once you know the real number, you can make better decisions about commutes, second jobs, lifestyle inflation, and big purchases.
What about benefits — health insurance, 401(k) match, PTO?+
This calculator doesn't include them — a deliberate simplification. In reality, employer-provided health insurance, 401(k) matches, HSA contributions, and PTO all add real value (often $10,000–$20,000/year). To get a more complete picture, add the annual value of those benefits to your salary and recalculate. The "true hourly" goes up. But the relative shock — stated vs true — stays roughly the same.
How can I improve my true hourly wage?+
Bigger leverage moves first: (1) Eliminate or shorten your commute — remote work, moving closer, or biking can reclaim hundreds of hours and thousands of dollars per year. (2) Cut work-related expenses — pack lunches, simplify the wardrobe. (3) Negotiate a raise — smaller effect than people think (taxes eat most of it) but cumulative. (4) Reduce hours — counterintuitive, but if fixed commute time gets spread over fewer paid hours, your true hourly can actually go up.