Wallet Hacks

How much is your time worth?

If you were on an overbooked flight, how much would it take for you to take a flight the next day? $500? $800? $1500?

If you're a doctor, on a United flight in Chicago, and absolutely had to be somewhere the next day – the answer is “infinity.” Or as United showed us last week, the cost will be in the millions after they concussed a passenger before bumping him.

Here's the rub – we all have a price. If United offered him $10,000 – he might have taken it. Delta does a clever thing where they ask for volunteers and just starts paying them. How novel.

But how much do you ask for? How much is your time worth?

It's often said that time is money but that's backward. Money is time. We have a limited amount of time on this earth and when you have money, you control more of your own time.

If time is money, can you quantify the value of your time to make better decisions?


I start with the value of a “work hour” and then triple it.

To get the work hour value, I calculate my take home pay (salary minus taxes and payroll deductions, accounting for deductions) and divided by total hours worked – 2,000. If you want to use the total number of hours in a year, divide by 8760 (365 * 24).

To help you make the calculations easier, I made this really simple calculator (assumptions in the calculator to follow):

How Many Hours Calculator

Unfortunately, this calculator does not run on AMP - click here to visit the regular page to use the calculator. Accelerated Mobile Pages cannot have user-generated javascript and that's what I built the calculator with. 🙂
What is your annual salary? ($)
How much is the item? ($)
How many hours do you work a year?
That will cost you:
Your hourly take home rate is:
Your marginal tax bracket:
Your effective Federal tax rate:

How Do I Use This?

I have my hourly rate when I work. To calculate the value of my personal time, I triple it.

That's how much I value an hour. (you can value it 1x, 5x, 10x — it's your time!)

If I make $40,000 a year, that's $16.48 an hour after taxes and other common reductions. The value of my hour is three times that, or about $50.

With a number, I can now start making trade offs. When I decide whether I'd like to fly or drive somewhere, I can use this to help decide. If the flight costs $200 and saves me 5 hours, I fly. If it costs $500 and saves me 5 hours, I drive.

I can use this to help decide whether or not to buy something too (which is integrated into the above calculator). If I make $16.48 an hour and want something that's $3, it'll cost me 10.92 minutes of work. $3 doesn't seem like a lot but if I want to make it back, I have to work an extra 11 minutes. It really helps you put an abstract concept (money) into something more concrete (time).

If an airline wants to bump me, I calculate how much “time” it'll cost me and adjust the value accordingly. I won't value a 24 hour bump at 24x this personal time value – it's probably close to like 8 hours. But if you pay me for 24, I just might take it.

How did I reach 3x as my free time value

Good question!

This is 99% gut feeling – if I earned $17 an hour, I'd probably sit in a focus group for $50 an hour. When I was making $60,000 a year ($23.63), I sat in a 90-minute focus group for $100. A multiple of 2.82.

The other semi-informed 1% was based on overtime pay. In many hourly paid roles, overtime pay is 1.5x so I just doubled it.

I think we all have a gut feeling of how much our time is worth, this just adds a little data support for those of us who like data. 🙂

Addendum: Calculator Assumptions

This calculator is very simple and makes these assumptions:

This calculator is still valuable if you're married, itemize deductions, or have other special circumstances that affects your take home pay. As with anything tax related, it gets complicated very quickly without providing additional insight.

Valuing your time is meant to be a general rule and a way to help you make decisions, so it doesn't have to be accurate to the penny. Does it make a difference if your hour is worth $16.48 or $18.92? Not really.