How much does $20 an hour 40 hours a week add up to?

Many employers now offer their staff a mixture of standard benefits, bonuses and incentives. Some employees may even be lucky enough to work for one of the companies that is currently offering staff an hourly rate of $20 as a minimum. So, what does this mean practically? How much does $20 an hour 40 hours a week add up to?

If you are currently working for a company that has not yet implemented this new structure and is considering applying for one of the jobs that have this as a minimum, it’s advisable to do some research first. Otherwise you could find yourself in an awkward situation where your wages don’t match up with those around you.

If you’re looking at working somewhere that offers $20 an hour as a minimum or something similar then read on to help you understand how much this will impact your take-home pay each month.

$20 an hour 40 hours a week adds up to…

As a rough guide, if you worked 40 hours a week at $20 an hour then you would take home around $800 a month before taxes and deductions. Of course, this will vary depending on the state you live in, the deductions applied to your pay and how your employer decides to handle your taxes. Furthermore, some employers will decide to limit workers to a certain number of hours per week, so be sure to check the terms and conditions.

For context, the federal minimum wage in the U.S. is $7.25 an hour and has been since 2009. Some states have a higher minimum wage but it is estimated that nearly 1.3 million workers in the country earn the federal minimum wage. This means that a number of full-time employees are living below the poverty line.

$10 an hour for every subsequent hour worked

As it stands, employers who decide to pay their staff $20 an hour 40 hours a week will also be required to offer $10 an hour for every subsequent hour worked. This means that if one of your colleagues works 50 hours a week, for example, they will receive $20 an hour for the first 40 hours and $10 an hour for the remaining 10 hours.

The idea behind this is that it prevents employers from having a loophole where they can increase the base rate of $20 an hour and still profit from their employees. It’s also hoped that a $10 an hour rate for overtime will encourage businesses to hire more staff to avoid overworking their current employees.

$16 an hour for the second shift and so on

If an employee works a second shift then they will receive $16 an hour for the hours they work. This increases to $20 an hour for the third shift and $25 an hour for every shift worked after that.

Again, this is an attempt to stop employers from exploiting their staff by making sure that they are paid fairly for the additional hours worked. It remains to be seen whether this new structure will be effective in curtailing unethical practices within the hospitality industry.

Take-home pay breakdown for employees working a $20 hourly wage

As discussed above, the $20 an hour rate will apply to the first 40 hours worked each week after which a different overtime rate applies. After 40 hours, employees will receive $10 an hour for every subsequent hour worked. This means that an employee who works a full week (40 hours) will take home $800 a month in gross pay. They will have earned $800 in regular pay and $160 in overtime pay, meaning their total take-home pay will be $960.

Some employers are now paying their staff a minimum $20 hourly wage. It’s hoped that this will help to close the wage gap between higher-paid employees and those on lower pay grades. However, it remains to be seen whether this new structure will be effective in curtailing unethical practices within the hospitality industry.

The important thing to remember is that this structure is new and it may take a while before it is fully implemented across the country. During this time, it’s important to be aware of how much each shift is worth in order to budget accordingly.