# This Calculator Shows How Many Hours Of Work That Big Purchase Costs

If you knew how many hours you’d have to work to buy that new TV, or a new car, how would that affect your decision to buy it? This calculator can help you find out.

The tool, created by personal finance site Frugal Fringe, takes a look at how many hours you’d have to work to pay off a large expenditure. It doesn’t take the easy way out, either. You could probably divide your hourly pay rate by the cost of an item to get an estimate, but that’s not quite accurate because you still have to pay taxes on your income, plus there’s the cost in commuting hours. Frugal Fringe’s tool accounts for all of that.

To start, you’ll need to enter your yearly salary, your top marginal tax rate (think of this as your tax rate for your income bracket). There’s a section for the tax rate for your state – that’s for US citizens. If you’re in Australia, you can simply input 0%. Then, figure out how many hours you work per year, plus how many hours you spend commuting. All those little expenses to both your time and money add up. Once you’ve entered them all, add the cost of the thing you want to buy into the final box and hit Calculate.

The tool will then show you how many hours of labour it really takes to pay off that big ticket item. In the screenshot above, I applied a typical salary to a \$2000 purchase and the tool told me it would take 135.86 hours of labour to pay for it. However, if I remove the tax rate and hours commuting, it drops down to a mere 72.19 hours. That’s how much of a difference your taxes and commute can cost you.

Of course, you’re probably not going to want to go through all the trouble with this calculator every time you buy a pizza. However, it’s handy to get some perspective on just how much of your life you’re investing into the biggest expenses in your life.

Bear in mind the calculator doesn’t factor in the Medicare levy, of which the standard is 2% of taxable income for those who it’s applicable to.

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