Is $27 an Hour Good? How It Compares & If It’s Livable

The question of whether $27 an hour constitutes a good wage is complex. Its true value is not universal, as it is heavily influenced by individual circumstances and external economic factors. Understanding this requires evaluating various elements beyond the hourly rate itself.

Converting Hourly Earnings to Annual Income

An hourly wage of $27 translates to a specific gross annual income before any deductions. Assuming a standard full-time work schedule of 40 hours per week for 52 weeks a year, $27 per hour equates to a gross annual income of $56,160.

It is important to distinguish between gross pay and net pay. Gross pay represents the total earnings before any deductions, while net pay, or take-home pay, is the amount an employee actually receives after these deductions. Common mandatory deductions include federal income tax, state income tax (where applicable), Social Security, and Medicare contributions. For 2024, the Social Security tax rate is 6.2% on earnings up to $168,600, and the Medicare tax rate is 1.45% on all earnings, totaling 7.65% for these payroll taxes. Federal income tax rates are progressive, meaning different portions of income are taxed at increasing rates, ranging from 10% to 37% for single filers in 2024. State income tax rates vary significantly, with some states having no income tax and others having progressive structures or flat rates.

Understanding How Location Affects Value

The actual purchasing power of $27 an hour varies significantly based on geographic location due to differences in the cost of living. Housing, transportation, groceries, and other essential expenses can differ dramatically between regions. For instance, major metropolitan areas and coastal cities have a much higher cost of living compared to rural areas or cities in the Midwest and Southern states.

For example, average rent for a one-bedroom apartment in high-cost cities like New York or San Francisco can exceed $3,000 to $4,000 per month, while in more affordable areas, it might be below $1,500. This disparity means that the same $56,160 annual gross income will afford a vastly different standard of living depending on where an individual resides.

Comparing to Broader Wage Data

To contextualize $27 an hour, it helps to compare it against broader wage benchmarks. As of mid-2025, the average annual household income in the U.S. is approximately $66,622, reflecting a 7.48% increase from late 2024. The median household income in the United States is estimated at $78,171.

For an individual, a gross annual income of $56,160 from $27 an hour positions them below the national average household income. This comparison provides a general sense of where $27 an hour stands relative to overall income levels in the country.

Assessing Your Full Compensation Package

An hourly wage alone does not represent the entirety of one’s compensation; the full compensation package often includes significant non-wage benefits. These benefits add substantial value that is not reflected in the hourly rate. Common components include health insurance, which can represent a considerable employer contribution.

Many employers also offer retirement plan contributions, such as a 401(k) match, which can help build long-term savings. Paid time off, including vacation and sick leave, as well as bonuses and other perks, further contribute to the overall value of employment. Benefits can represent 20% to over 30% of an employee’s total compensation.

Strategies for Managing Your Income

Effectively managing an income of $27 an hour involves strategic financial planning. Creating a detailed budget is a fundamental step, allowing for a clear understanding of income versus expenses. This process helps in identifying essential spending categories, such as housing, utilities, transportation, and food, and differentiating them from discretionary expenses like entertainment or dining out.

Prioritizing saving is important, beginning with an emergency fund to cover unexpected costs, three to six months of living expenses. Contributing to retirement accounts, especially if an employer offers a match, can significantly boost long-term financial security due to the power of compounding. Debt management strategies, such as focusing on high-interest debts first, can free up more income for saving and other financial goals. Regularly reviewing and adjusting the budget ensures it remains aligned with financial realities and evolving goals.