$15 an Hour Is How Much a Year?

The Fight for $15 campaign began with fast food workers in New York in 2012, when the federal minimum was — and remains — $7.25. At the time $15 was widely dismissed as unrealistic; more than a decade later it is the statutory minimum in a dozen states and well below the going rate in many metro labour markets.

What has changed in the meantime is what $15 buys. Adjusted for inflation since 2012, it is worth substantially less in real terms than when the campaign started, which is why the argument has moved on to higher figures in high-cost states.

At full time this is a wage where the standard deduction shelters an unusually large share of income, so federal income tax stays low — but FICA applies from the first dollar, and for many workers at this level payroll tax is the bigger deduction of the two.

That is about 50% of typical US full-time individual earnings. The standard deduction shelters 52% of it from federal income tax, leaving $15,100 taxable — which puts the top of this income in the 12% federal band. Federal income tax works out at roughly 5% of gross, while FICA takes a flat 7.7% — so payroll tax is the larger deduction at this level, which surprises most people.

On the widely used guideline of spending no more than 30% of gross income on housing, $15 an hour supports rent of about $780 a month. That is a starting point rather than a rule — it ignores your other commitments, and in high-cost metros it is frequently unachievable, which is why many households end up above it.

The annual figure above assumes 2,080 paid hours. Salaried roles usually include paid holiday, so the effective hourly rate is higher than it looks; hourly roles without paid leave earn nothing during time off, so a week unpaid costs $600 of gross pay.