A new study by SmartAsset calculated the average annual take-home pay across 25 cities by using worker earnings after accounting for income taxes.

Hopefully workers in San Jose, California, like their jobs — or have a lot of roommates. For the average wage earner in the city, it would take a whopping 76 hours of work a month to afford rent, according to a new study by SmartAsset.

The personal finance technology company reports that the median monthly rent in San Jose is $2,161, which equates to nearly $26,000 per year. Yet, the median worker residing in San Jose makes $40,596 annually after taxes, making their hourly wage about $28. Crunch those numbers, and that means the typical worker in San Jose must work over 76 hours per month in order to pay rent.

The study calculated average annual take-home pay by using average worker earnings after accounting for income taxes. For this metric, SmartAsset also assumed the average worker did not contribute to an IRA or 401k, the worker took the standard deduction and filed as single. Average hours worked per year and median monthly rent data came from the U.S. Census Bureau’s 2018 1-year American Community Survey.

SmartAsset’s study helped uncover some overarching trends about working hours and high rent: cities in Western states require more work hours to make rent, and housing costs run high across all of the largest U.S. cities. Out of the top 10 cities where the greatest amount of working hours are required to make rent, 40 percent were in California, while cities in Washington and Colorado also made the top 10. In all 25 of the cities included in the study, rent makes up more than 30 percent of average annual wages earned. In San Jose, Los Angeles and San Diego, rent makes up more than 50 percent of average wages earned.



In addition to requiring the greatest number of working hours to pay for rent, San Jose also ranked as the city in which homeowners spend the most on housing in the U.S., according to a separate study completed in August 2019 by SmartAsset.

Renters who want to live in a big city and have the opportunity to enjoy all it has to offer might consider Indianapolis or Detroit, the cities that slid in at the very bottom of SmartAsset’s list of 25. In these cities, the average worker only needs to work about 41 and 47 hours, respectively, in order to afford rent.

Email Lillian Dickerson

*Update on February 17: This article initially stated that SmartAsset’s study measured the number of hours necessary to work per week in order to afford rent in different cities. However, the study measured how many hours total would be necessary to pay monthly rent in each specific city.

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