Seeing as this looks like a side scroller, I have a (personal preferenced) suggestion. In my opinion, the hammer shouldn't cut into the platform on which he's standing.
Anyway, here's how I might have done it:

Excuse the hair/messy rotation/fact that the handle moves up and down as well as tilting.
Even if you disregard my first point, I still think the hammer shouldn't shift forwards an backwards as much as it should tilt back and forth a bit. Its heavy, so he wouldn't move it a lot if he's just idle.