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Simple calculation of what your time is worth

Most people don’t seem to value their time in money, which is weird since having a job means trading time for money.

The monetary value of your time is pretty easy to calculate.

( monthly income after taxes) /  (average work hours per month) = your value of an hour

You simply divide your monthly income after taxes by your average work hours per month, which gives you how much you bring in per worked hour.

That is the price at which you sell your average hour. So, you should buy your hours at the same or preferably a lower price.

Some example calculations at $20/hour:

  • Paying $100 extra on an airplane ticket that means a 7 hours shorter flight – $40 gain.
  • Paying $20 for a cab ride when the walk is 30 minutes – $10 loss. (If the circumstances make the cab ride a safer option is a factor not taken into account here.)
  • Saving $800 on a cheaper computer that means 100 hours of extra maintenance, slower work, lost work etc. over time – $1200 loss.

Pretty simple, right?

Bear in mind though that this calculation is for assessing time that is lost or gained. Quality of life and time is an entirely different matter, for which I have no formulas.

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