Are you living in a city where earning $100,000 just doesn’t cut it?
Taxes are due this year on Tuesday, April 18. More than 168 million individual tax returns are expected to be filed.
For high-earners residing in America’s largest and priciest cities, they need a net income of over $180,000 for their purchasing power to break the $100,000 mark, according to SmartAsset’s analysis of the Council for Community and Economic Research’s cost-of-living data.
As a result of inflation, the Tax Foundation reported that taxpayers with taxable income above $539,900 for single filers and above $693,750 for married couples filing jointly will be hit with a 37% income tax rate.
“Ultimately, to have the purchasing power of $100,000, you will have to earn a substantially higher salary,” per Smart Asset
.And since the cost of living in major cities, like Honolulu and New York, surpass the national average, residents need to bring home even more for their take-home earnings to be inducted into the six-figure club.
With Smart Asset’s help, let’s take a look at these six cities whose annual salaries have been analyzed and adjusted for taxes and cost of living to find the “new” $100k.
Honolulu, HI
The U.S. Department of Housing and Urban Development considers a family of four in The Big Pineapple making under $93,000 a year to be “low income.” According to Smart Asset, Honolulu’s costs of living (86% higher than the national average) are greatly impacted by gorgeous landscapes and imports for energy, goods, and services.
“To take home $100,000 in The Big Pineapple, workers need to earn at least $312,400 pre-tax. Net pay works out to $185,999 — roughly 59.5% less than the gross earnings,” per Smart Asset.
New York, NY
There are simply more people looking to live in the Big Apple, than there are available apartments, which causes prices to soar. The high cost of living (83.6% higher than the national average) in Manhattan is no secret, but many don’t realize that the real estate market is major contributor to that rising issue. Then there are high taxes, high transportation costs, and the city’s status as a global economic and cultural hub with 8.5 million residents and 61 million projected tourists for 2023.
With that being said, residents will need to rake in at least $312,000 to feel the six-figure mark.
San Francisco, CA
According to Smart Asset, San Francisco costs a “disproportionate 82.8% more than the national average.” From the city’s current tech-driven economic boom to its scarce housing, San Franciscans need to earn slightly more than $300,000 before taxes to take home $100,000 of purchasing power.
Oakland, CA
While this city is less than 20 minutes away from San Francisco, living costs lies at 47.3% above the national average partly due to the spillage of Silicon Valley’s tech entrepreneurship.
After adjusting for cost of living to be left with $100,000, income earners living in Oakland need $245,600 pre-tax.
Los Angeles, CA
You’ve made it if you gross at least $245,300 in the City of Angeles, where the cost of living is 52.5% higher than the national average.
While taxes account for 37.8% of income, there is no denying the city’s popularity as the warm entertainment capital of the world, offering a plethora of arts, culture, and job opportunities.
Long Beach, CA
Just 24 miles away from Los Angeles, this coastal city sits in the same spot in terms of what earners need to take home to reach the “equivalent of $100,000 to account for taxes and cost of living.”
The average cost of living in Long Beach puts it in the top 2% of the most expensive cities in the world. According to Zillow, the average home price of $760,000 is about $130,000 cheaper than in LA.
Washington, DC; San Diego, CA; Boston, MA; and Seattle, WA fall shortly behind these top six cities.