Living Wage Calculator
A basic monthly budget, and the hours your household works
Your result will appear here
Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- General mathematical model
- Scope and limitations
- Educational estimate only. Confirm the assumptions, current rules, fees, and rounding that apply to your situation before making a decision.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter a basic monthly budget: housing with utilities, food, child care, health care including premiums and out-of-pocket costs, transportation and other necessities.
- 02
Enter how many adults in the household work, the hours each works a week and the weeks a year of paid work.
- 03
Enter the share of gross pay that goes to tax. Social Security and Medicare take 7.65%; add your estimate of federal and state income tax, and lower the figure if you expect tax credits.
- 04
Enter the minimum wage where you work. The Department of Labor's state table, updated 1 July 2026, lists each state's rate; the $7.25 federal minimum is already filled in.
- 05
Read the hourly wage each working adult needs, the hours a week it would take at the federal and at your state minimum, and the table that shows what each budget line costs an hour.
Formula
Monthly budget = housing + food + child care + health care + transportation + other necessities. Gross income needed a year = monthly budget × 12 ÷ (1 − tax rate). Paid hours a year = working adults × hours a week × weeks a year. Hourly wage needed per adult = gross income needed ÷ paid hours. Full-time pay at the federal minimum = $7.25 × 2,080 hours × working adults. Gap = gross income needed − that pay. Hours a week per adult at a minimum wage = gross income needed ÷ the minimum wage ÷ weeks a year ÷ working adults. Each budget line's hourly cost = its yearly amount ÷ (1 − tax rate) ÷ paid hours.
Example
A household with two working adults budgets $1,650 for housing, $900 for food, $1,000 for child care, $600 for health care, $750 for transportation and $650 for other necessities: $5,550 a month, $66,600 a year. With 12% of pay going to tax, it needs $66,600 ÷ 0.88 = $75,682 a year before tax, $9,082 of it tax. Both adults work 40 hours a week for 52 weeks, 4,160 hours in all, so each needs $75,682 ÷ 4,160 = $18.19 an hour, $37,841 a year. Full-time work at the $7.25 federal minimum pays $15,080 each, $30,160 together, $45,522 a year short; covering the budget at $7.25 would take 100.4 hours a week each. At a $15.00 state minimum it takes 48.5 hours a week each, and the wage needed is 1.21 times that minimum, $3.19 an hour more. Housing alone takes $5.41 of every hour's pay.
Definitions
- Living wage
- The hourly pay a household needs to cover a basic budget after tax, without public assistance and without savings.
- Federal minimum wage
- The lowest hourly wage the Fair Labor Standards Act allows for covered workers: $7.25 since 24 July 2009. A higher state or local minimum takes precedence where it applies.
- Tax on wages
- The share of gross pay that goes to Social Security and Medicare (7.65%) plus federal and state income tax, net of any credits you expect.
- Paid hours
- Working adults × hours a week × weeks a year: the hours of paid work that have to cover the whole budget.
- Basic budget
- The costs a household cannot avoid, here housing, food, child care, health care, transportation and other necessities, with nothing for savings, debt repayment or leisure.
Good to know
What a living wage measures, and what it leaves out
A living wage is the hourly pay that covers a household's basic costs after tax, without public assistance. It is different from the minimum wage, which is a legal floor set by federal and state law with no direct link to what anything costs. The idea is simple: add up what a household must spend to get by, gross it up for tax, and divide by the hours its adults work. On this page's example, a household with two working adults budgets $1,650 a month for housing with utilities, $900 for food, $1,000 for child care, $600 for health care, $750 for transportation and $650 for other necessities such as a phone, internet and clothing. That is $5,550 a month, $66,600 a year. With 12% of pay going to tax, the household needs $75,682 a year before tax. Both adults work 40 hours a week for 52 weeks, 4,160 paid hours in all, so each needs to earn $18.19 an hour, or $37,841 a year. The word basic matters. This budget has nothing for savings, retirement contributions, emergencies, debt repayment, gifts or a vacation. A household earning exactly a living wage by this measure is covering its costs with no margin, and one car repair or medical bill can put it behind. That is why a living wage is best read as a floor, the lowest income that pays the bills, rather than a comfortable income. It also assumes steady, full-year work. If either adult works fewer hours, has unpaid time off or spends part of the year between jobs, the hourly wage needed rises, and the fields for hours and weeks let you see by how much. Use your own figures wherever you have them. The page is built so the budget is yours, not an average, because rent and child care vary enormously from one place to another.
The federal minimum wage and the state rates above it
The federal minimum wage, set by the Fair Labor Standards Act, has been $7.25 an hour since 24 July 2009, according to the Department of Labor. It has not changed since, while prices have risen steadily. Carried by CPI-U from the 2009 annual average of 214.537 to the August 2026 index of 334.980, the same buying power would take $11.32 an hour today. Full-time work at $7.25, 40 hours a week for 52 weeks, pays $15,080 a year before tax. For the two-adult household in this page's example, two full-time jobs at the federal minimum pay $30,160, which is $45,522 a year short of its $75,682 budget, and covering that budget at $7.25 would take each adult 100.4 hours a week. Most workers, though, are covered by a higher state or local minimum. Where a state sets a higher rate, the higher rate applies. The Department of Labor's table of state minimum wages, updated 1 July 2026, lists Washington at $17.13, the highest state rate, California at $16.90 and Connecticut at $16.94, with the District of Columbia at $18.40. At the other end, West Virginia's $8.75 is the lowest state rate above the federal one. Five states, Alabama, Louisiana, Mississippi, South Carolina and Tennessee, have no minimum wage law of their own, and several others set their minimum at $7.25, so in those states the federal rate is the one that applies to covered workers. Many cities and counties set their own minimums above their state's, so check the rate where you actually work. Enter that rate on the page and it shows how many hours a week it would take to cover your budget. At a $15.00 minimum, the example household's adults would each need 48.5 hours a week, because the budget needs $18.19 an hour, 1.21 times that minimum.
How taxes and credits change the wage you need
The tax field has a large effect on the answer, because a basic budget has to be paid from take-home pay, and every dollar of tax has to be earned first. The starting point is payroll tax. Social Security and Medicare take 7.65% of wages from every paycheck, with no standard deduction and no exemption for low earners. Federal income tax comes next, and for many lower-paid households it is small or zero once the standard deduction is subtracted. State income tax varies from none in some states to several percent in others. Add the three as a share of gross pay to get the figure for the field. On this page's example the household assumes 12%, which adds $9,082 of tax to the $66,600 budget and raises the gross income needed to $75,682. Tax credits can change the picture substantially for working families with lower incomes. The Earned Income Tax Credit and the refundable part of the Child Tax Credit are paid even when a family owes no income tax, and for some families they are worth more than all the payroll tax withheld during the year. In that case the effective tax rate on wages can fall below 7.65% or below zero, meaning the household receives more at filing than it paid. If you expect credits like these, lower the tax field to reflect them, and the hourly wage the page reports will fall. Two cautions apply. Credits arrive once a year as a refund, while rent and groceries are due every month, so a household that depends on a refund can still fall short during the year. And credits phase out as income rises, so a raise can reduce them. For a precise figure, the income tax and paycheck calculators work through federal withholding and credits in detail, and the result can be brought back here as a single rate.
Reading the budget one hour at a time
The table on this page turns each budget line into the hourly pay it takes, which is a useful way to see where a household's working hours actually go. On the example, the whole budget needs $18.19 an hour for each of two adults. Housing with utilities takes $5.41 of that, child care $3.28, food $2.95, transportation $2.46, other necessities $2.13 and health care $1.97, with $2.18 going to tax. Put another way, before either adult has paid for anything else, the first several hours of every workday go to rent. Seen this way, the levers become clearer. Housing and child care are usually the two largest lines, so they are where a change moves the answer most, whether that means a less expensive home, a roommate, a different child care arrangement or a dependent care benefit through an employer. Transportation is often the third lever, and a household that can drop from two cars to one frees a meaningful share of an hour. The work side of the equation matters as much as the spending side. The page divides by working adults, hours a week and weeks a year, so a second earner, more hours or fewer unpaid weeks all lower the hourly wage each person needs. The same arithmetic shows why a cut in hours can be as damaging as a cut in the wage itself. For a cross-check on the budget, the MIT Living Wage Calculator estimates basic costs for each county and household type from published data, and comparing your own figures with its estimates for your area can reveal a line that is unusually high or one that has been left out. The average monthly expenses and zero-based budget calculators on this site can help build the budget in more detail before you enter it here.
Frequently asked questions
What is a living wage?
The hourly pay that covers a household's basic costs once tax is paid, with no help from public programs and nothing left for savings. On this page's example, a household with two working adults and a $5,550 monthly budget needs $75,682 a year before tax at a 12% tax rate. Working 40 hours a week for 52 weeks, each adult needs $18.19 an hour.
How far is the federal minimum wage from a living wage?
A long way for most households. Full-time work at the $7.25 federal minimum pays $15,080 a year before tax, $30,160 for two workers. Against the example budget that is $45,522 a year short, and covering the budget at $7.25 would take each adult 100.4 hours a week.
How many hours would it take at my state's minimum wage?
Enter your state or local rate and the page works it out. At $15.00 an hour, the example budget takes 48.5 hours a week from each of the two adults, because the $18.19 the budget needs is 1.21 times that minimum. The Department of Labor's table, updated 1 July 2026, lists Washington's $17.13 as the highest state rate and the District of Columbia at $18.40, with West Virginia's $8.75 the lowest rate above the federal floor.
Has the federal minimum wage kept up with inflation?
No. It has been $7.25 an hour since 24 July 2009, and prices have risen since. Carried by CPI-U from the 2009 average of 214.537 to 334.980 in August 2026, the same buying power would take $11.32 an hour today. Five states, Alabama, Louisiana, Mississippi, South Carolina and Tennessee, have no minimum wage law of their own, and several set $7.25, so the federal rate is the one that applies there.
What tax rate should I enter?
Start with the 7.65% that Social Security and Medicare take from every paycheck and add your federal and state income tax as a share of gross pay. Lower-paid families with children often get the Earned Income Tax Credit and the Child Tax Credit back at filing, which can bring the overall rate below 7.65% or even below zero, so lower the field if you expect them. In the example, 12% of gross pay is $9,082 a year.
Which budget line takes the most hours of work?
Usually housing. In the example, housing's $1,650 a month takes $5.41 of every hour's pay, child care $3.28 and food $2.95, out of the $18.19 an hour the whole budget needs. The table on the page shows the hourly cost of each line, so you can see which change would lower the wage the most.
How does this compare with the MIT Living Wage Calculator?
The idea is the same: add up a basic budget and find the wage that pays for it after tax. MIT's calculator fills in the budget from published cost data for each county and household type. This page lets you enter your own figures instead, so it answers the question for your actual rent, child care and commute, and you can use MIT's county figures as a cross-check.