True Hourly Wage
From Your Money or Your Life by Vicki Robin. Your real hourly rate is take-home pay divided by the hours you actually commit — including commute, prep, decompression, and work-only expenses. Most people learn they earn less than they thought.
Your real rate
True hourly wage
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Gross hourly (what HR says)
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Net annual (after tax + expenses)
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Total committed hours / year
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Hours beyond contracted
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The point of this number
Vicki Robin's framework asks: how much of your life are you actually trading for money? When you know your true hourly wage, you can price purchases in life-energy: "That $200 jacket is six hours of my actual life." It reframes spending decisions in a way the gross salary doesn't.
What goes in the denominator
Not just your contracted hours. Add:
- Commute — both directions. Time you can't use freely.
- Prep — showering for work, ironing a shirt, packing a lunch.
- Decompression — the 30 minutes after work when you can't be productive because the job emptied you.
- (Optional) work travel time, on-call hours, mandatory continuing-ed, professional networking.
What comes out of the numerator
- Taxes — federal + state + FICA. Effective rate, not marginal.
- Commute cost — fuel, transit, parking, car wear.
- Work-only expenses — the lunches, coffee, clothes, daycare that exist because of the job.
- (Optional) the cost of stress-related healthcare, gym memberships you wouldn't need if work wasn't sedentary, etc.
Surprising findings
The classic Robin / Dominguez example: a $50k/yr worker with a long commute, expensive work clothes, and a habit of takeout lunches and end-of-day drinks netted closer to $7/hour true wage, vs the ~$24/hour gross. Your version probably won't be that dramatic — but the gap is almost always meaningful, and shrinking it (closer commute, simpler work clothes, packed lunches) is often easier than growing the salary.