Unlocking the Average American Income

What is the Average American Income?

What is the average American income, and how does your income stack up against the statistics? 

The answers might shock you depending on where you live and what you make. One professor went viral for her tweet explaining the discrepancy between what her students thought the average American income was versus the reality.

She tweeted that 25% of students thought the average annual salary was over six figures. In reality, the average is just over $60,000, and the median rate is even lower at around $44,000.

Income largely depends on industry, location, and experience. However, gender and race also come into play. Unfortunately, systemic prejudice against genders and various races creates income inequality. 

For example, the median household income for households identifying as white was $74,912 in 2020, while the median Hispanic household income was around $55,321. 

In addition, some industries pay employees exceptionally well. Other industries are known to pay individuals far below a living wage (nearly 10% of Americans make less than $15,000, which is below the poverty rate).

According to Zippia, the real median household income was $70,784 in 2021.

Note that according to the United States Census Bureau, income is defined as money received by each person in the household who is aged 15 and older, excluding certain receipts such as capital gains.

Money income is pretax and does not include stimulus payments and tax credits such as those from the American Rescue Plan Act (ARPA).

Which industries earn the highest average incomes?

According to the Bureau of Labor Statistics, physicians top the charts earning an annual average wage between $231,500 and $353,970. Chief executives earn an average of $213,020, and airline pilots, copilots, and flight engineers earn an average of $198,190.

What regions of the US have the highest/lowest income?

The Northeast region is regarded as one of the wealthiest in the country, while the South and parts of the Midwest have some of the lowest incomes. Maryland, DC, and New Hampshire were the top three states with the highest median household income in 2021.

Maryland had a median household income of $97,332, District of Columbia (DC) had a median household income of $90,640, and New Hampshire had a median household income of $88,841.

The state with the lowest individual income was Mississippi, with a per capita personal income of $46,637.

What is the Average American Income?

Let’s acknowledge that it is tough to define what “normal” is because as humans, we’re all different.

“Normal” accounts for a large percentage of the population. For these purposes, let’s consider “normal” to be a person who can work full-time without limitations.

According to Zippia, the average income in the U.S. is $63,214, while the median income in the U.S. is $44,225. Because averages account for the highest and lowest incomes, the average income is significantly higher than the median income.

What percentage of Americans make over 100k?

Statista notes that approximately 35.8% of Americans make over $100,000 annually.

What percentage of Americans make over 50k?

Statista also notes that approximately 63.9% of Americans made more than $50,000 in 2021.

What is the top 10% of income in US?

According to PolicyAdvice, the 45-54 years age group was the highest-income age group in the second quarter of 2021. Overall, the top 10% of earners in the US make $173,176.

What is a middle-class salary in 2022?

About 52% of Americans are considered to be middle class. According to US News, salaries associated with the middle-class range from $53,413 to $106,827. 

Zippia, on the other hand, lists a broader range, noting that middle-class salaries range from $42,000 to $126,000. While salary is the most common indicator of class, other factors such as education and experience can affect earning potential.

 For example, a graduate student might be earning a low stipend which technically puts them in a lower class based on annual income. However, the earning potential they have due to the education they are gaining creates a higher forecasted future income.

What salary is upper class?

US News notes that upper-middle class has a range of $106,827 – $373,894 annually, while annual incomes of $373,894 and up are considered upper class.

How much can I earn in America?

Your earning potential is based on various factors including education, experience, industry, and location.

Based on information from the National Center for Educational Statistics, for 25 to 34 year-old full-time workers, higher educational attainment was associated with higher median earnings.

Specifically, in 2020, the median earnings of those with a master’s or higher degree were $69,700, (17% higher than the earnings of those with a bachelor’s degree who made a median of $59,600).

In the same year, the median earnings of those with a bachelor’s degree were 63% more than the earnings of those who completed high school. Those with a high school degree alone made a median amount of $36,600.

In general, organizations in larger metropolitan areas will often pay higher salaries due to an increased cost of living.

However, as stated previously, the Northeast has among the highest income levels, while the South and Midwest tend to have the lowest salaries in the country.

What percentage of men make 50k?

Due to the gender pay gap, men make about 17.7% more than their women counterparts. The Bureau of Labor Statistics noted that median weekly earnings were $1,082 for men age 16 and older, which equates to $56,264 annually. In 2021, about 51.8% of all working men made $50,000 or more.

What percentage of women make 50k?

The gender pay gap is real, which highlights inequality in pay rates and overall income. According to data from the Bureau of Labor Statistics, in 2020, women’s annual earnings were 82.3% of that of their male counterparts. This means that for every dollar a male made, a woman in the same role made $0.82, and the gap is even wider for many women of color. In 2020, median weekly earnings were $891 for all women aged 16 and older, which equates to $46,332 annually. In 2021, about 38% of working women made $50,000 or more.

Is 50k a decent salary?

A $50,000 annual salary is between the median and average amount of personal salary made by individuals in the US. Depending on where you live, $50,000 can be a decent salary. Mississippi is rated as the least expensive state to live in.

Least Expensive States:

1. Mississippi
2. Kansas
3. Alabama
4. Oklahoma

Most Expensive States/Metros:

1. Hawaii
2. Washington, D.C.
3. New York
4. California

If you’re living among the top most expensive states, your income won’t stretch as far.

Is 100k a good salary in the US?

A $100,000 salary is more than double the median annual income for Americans—and almost double the average American salary. 

In most parts of the country, a $100,000 salary is an excellent salary. 

However, depending on where you live, it might not provide your desired comfort level. 

Cities such as San Francisco, New York, and Los Angeles often frequent lists for being the most expensive cities to live in within the US. In cities among the most expensive, a $100,000 salary will suffice. However, it’s often not enough for a single person to purchase a home alone.

What is a good salary in the US in 2022?

SmartAsset recommends using the 50/30/20 rule to define your comfort level and what you would consider a “good” salary. 

This rule is a budgeting strategy that allocates:

• 50% of after-tax income to basic living expenses (needs)
• 30% to discretionary spending (wants)
• 20% for savings or debt payments

If you were to take a $100,000 salary, you’d want to live in an area where you could budget $50,000 for your needs. This includes housing, food, health, utilities, auto, etc. You can use $30,000 per year on wants and save the remaining $20,000 annually. 

What percentage of Americans make $100,000 per year?

About 33.6% of Americans are estimated to make $100,000 or more annually.

What does the top 5 percent make?

Investopedia states that the top 5% of earners make approximately $342,987 annually.

What is the top 5% of household incomes in the US?

The threshold to be in the top 5% of household incomes in 2022 in the United States is said to be $286,301 for 2022.

This article was written by The Salary Project writer, Michele Lando.