A good salary is one that enables you to comfortably support your desired lifestyle. Often, to determine the monetary value of a good salary, you need to consider a few additional factors, such as where you live, the number of people you’re supporting, or your industry.
Although it can be tempting to judge your salary directly against other people’s, that approach tends to ignore one or several of these influences. To illustrate, let’s look at the average salary in the United States.
According to the US Bureau of Labor Statistics (BLS), the median annual wage across all occupations in 2021 was $58,260 . For a person living in Phoenix, Arizona, where the median wage is $56,610, earning above the national average may be considered very good. However, a person living in San Francisco, California, where the median wage is $86,590, may disagree . Similarly, a single person supporting only themselves on a $58,260 salary may feel comfortable, while a person supporting a family of four on that same salary may feel stretched.
In this article, we’ll take a closer look at the different factors that can influence salary and walk through the thought process to determine what a good salary is for you.
There are several factors that affect your salary, and each of those factors can help you assess whether you are being compensated adequately and fairly. Some common factors to consider are your:
As you assess whether your salary is “good” compared to your peers—or if you are trying to determine a fair salary to ask for with your employer—you’ll typically want to consider each of these factors together.
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Your cost of living will vary depending on where you live, meaning the same exact lifestyle can cost more or less money in different locations. If you live in a location with a high cost of living, you’ll require a higher salary than you would in a location with a lower cost of living to afford the same lifestyle.
Because the cost of living varies by location, what’s considered a good salary can also vary by location.
Here are the median salaries across all occupations in various US metropolitan areas, according to the BLS :
|Las Vegas, Nevada||$50,360|
|New York, NY||$74,150|
|San Francisco, California||$86,590|
With experience, you’ll often earn more money than you did at the start of your career, thanks to new skills you’ve gained and the expertise you’ve honed. Perhaps your experience level will be reflected in a higher job title or greater responsibilities.
One simplified way to assess salary by experience is to look at the average salary across various age groups, with the assumption that people who are older will tend to have more work experience than those who are younger.
Here are the estimated median salaries of US employees by age, calculated using data from the BLS :
Another way to gauge experience may be by education level. Furthering your education is often seen as one way to exemplify skills and knowledge in your field, typically leading to higher salaries. For example, teachers may qualify for a higher salary once they’ve earned their master's. (Note, however, that different fields tend to have different educational standards and requirements.)
Here are the estimated median salaries of US employees by education level, calculated using data from the BLS :
|Highest education level||Estimated salary|
Certain industries tend to be more lucrative than others, so your industry can be a significant determining factor in how much money you make. Similarly, your salary can fluctuate depending on your specific role within your industry.
Here are the median salaries across all occupations in various industries in the US, according to the BLS :
|Science and tech||$91,150|
There are several tools that aggregate data from current employees and employers in various locations and across all experience levels and industries to determine a specific fair market value for any given position. As you conduct salary research, use tools such as LinkedIn Salary, Glassdoor, or Payscale to estimate what other people in situations similar to yours are making.
Typically, your bottom line isn’t dependent upon your location, experience, and industry. Rather, there are times when you want to first consider your salary needs and then find a job that will fulfill those needs.
To determine your ideal budget, make a list of your living expenses and lifestyle desires. Some items that may make it into your budget include:
You can work with a weekly, monthly, or annual budget, and then use that to determine what a good salary would be for you.
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There are typically ways to increase your salary to better align with your financial goals. Here are some ideas to get started:
As you gain new skills or strengthen your current skills, you may find that you qualify for more advanced positions. Consider taking an online course, volunteering for a new project, or earning a certification to showcase your skills.
Read more: 7 High-Income Skills Worth Learning
Since certain industries tend to pay better than others, you may be able to earn more money if you move into a new industry or job function. You likely already have several transferable skills that show your qualifications.
Read more: 10 Remote Work-From-Home Jobs that Pay Well
As you conduct salary research, you may notice that you aren’t earning the expected market value. Asking your employer for a raise—or, if appropriate, a promotion—can be one way to ensure fair compensation.
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1. US Bureau of Labor Statistics. “May 2021 National Occupational Employment and Wage Estimates United States, https://www.bls.gov/oes/current/oes_nat.htm#00-0000.” Accessed September 15, 2022.
2. US Bureau of Labor Statistics. “May 2021 Metropolitan and Nonmetropolitan Area Occupational Employment and Wage Estimates, https://www.bls.gov/oes/current/oessrcma.htm.” Accessed September 15, 2022.
3. US Bureau of Labor Statistics. “Median usual weekly earnings of full-time wage and salary workers by age, race, Hispanic or Latino ethnicity, and sex, second quarter 2022 averages, not seasonally adjusted, https://www.bls.gov/news.release/wkyeng.t03.htm.” Accessed September 15, 2022.
4. US Bureau of Labor Statistics. “Data on display: Education pays, 2021, https://www.bls.gov/careeroutlook/2022/data-on-display/education-pays.htm.” Accessed September 15, 2022.
5. US Bureau of Labor Statistics. “May 2021 National Industry-Specific Occupational Employment and Wage Estimates, https://www.bls.gov/oes/current/oessrci.htm.” Accessed September 15, 2022.
This content has been made available for informational purposes only. Learners are advised to conduct additional research to ensure that courses and other credentials pursued meet their personal, professional, and financial goals.