The idea
"Real hourly wage" is not our idea. It comes from Your Money or Your Life by Vicki Robin and Joe Dominguez, published in 1992. The argument: your stated salary overstates what your time is worth, because the job imposes costs — in money and in time — that don't appear on your pay stub. Subtract those, divide by the actual hours work consumes, and you get the real number.
This calculator implements that idea. No political agenda, no behavioural advice, no subscription pitch. Just the math.
The formula
(after-tax income − job-related costs)
÷ (work hours + commute + prep + unpaid OT), annualized.
Tax calculation
We use 2025 US federal tax brackets (the most recent finalized brackets per IRS Revenue Procedure 2024-40) and the standard deduction for your filing status. FICA is applied at the statutory rates: 6.2% Social Security on wages up to $176,100 and 1.45% Medicare on all wages, with an additional 0.9% Medicare surcharge on income above $200,000 (single) or $250,000 (married).
State tax uses a flat top-marginal-rate approximation sourced from the Tax Foundation's 2025 state individual income tax data. This is deliberately a simplification: states with progressive brackets will show slightly overstated tax for middle earners. For a precise state-tax-bracket calculation, use your state's official tool.
We do not model itemized deductions, pre-tax 401(k) contributions, HSA contributions, child tax credits, earned income credits, or local and city taxes. These affect individual cases but not the overall argument the tool is making.
Work hours
We annualize at 50 weeks per year to account for a reasonable two weeks of vacation and holidays. Your actual working weeks may differ.
Your real work week combines official hours, commute (one-way × 2 × days per week), morning prep, and unpaid overtime. The tool deliberately counts these as work time because they are time the job takes that you would not spend on a day without the job.
Job costs
Only costs that exist because of the job count. The tool prompts you to only enter work clothing you wouldn't own otherwise, childcare hours that exist because you work, and so on. This is a judgment call on the user's part. A generous interpretation understates the real wage; a strict interpretation overstates it.
Years-at-work calculation
We multiply your real work week by 50 weeks and by the years between your current age and 65. That gives lifetime remaining work hours. To get the "% of waking life" figure, we compare to 16 waking hours per day for the same span. Both numbers are approximate by design — they are meant to be directionally accurate, not to model any particular individual's retirement plan.
Catalog item prices
The "What things really cost you" catalog uses mid-range 2025 US prices sourced from publicly available retail data, Kelley Blue Book, The Knot's average-wedding-cost report, and Child Care Aware's state-by-state childcare data. Prices vary enormously by region and taste. If a number looks wrong for your situation, use the custom input to check your own.
What we deliberately leave out
- Retirement contributions. Your 401(k) or IRA is your money, not a cost of working. We don't deduct it.
- Health insurance premiums. Varies enormously by employer and plan type. Including it requires more inputs than the v1 wizard allows.
- Stress, sleep, and life-shortening effects. Not quantifiable. Leaving them out keeps the math defensible.
- Employer-provided benefits. Health insurance, matching 401(k), transit passes, stock grants. A strict implementation would add these back. We don't, to keep the tool simple.
Data sources
- IRS Revenue Procedure 2024-40 (2025 federal tax brackets & standard deduction)
- Social Security Administration 2025 wage base announcement
- Tax Foundation, State Individual Income Tax Rates and Brackets, 2025
- Vicki Robin & Joe Dominguez, Your Money or Your Life, 1992 (revised 2018)
If you spot an error
Every calculation runs in your browser. Nothing is stored, nothing is
sent anywhere. If the math seems off, you can check it yourself: all
the logic is in the open-source calculator.ts file.
Corrections welcome via the contact link on the about page.