With its blossoming tech industry, the San Francisco Bay Area ranks among the most expensive metro areas to live in globally. If you are planning to move here, you may wonder what a good salary in the Bay Area is. To help you out, this article evaluates how much you need to make to live comfortably here.
What Is a Good Salary in the Bay Area?
A good salary in the Bay Area is at least $7,810 a month or $93,720 annually, according to the Bureau of labor statistics. This is within range of the national average salary of around $97,962 as of 2021.
If you make this amount in the Bay Area, you can comfortably cover the cost of living in a two-bedroom apartment, transportation costs, personal leisure, buy your food & groceries, and meet other living expenses.
Factors That Will Determine How Much You Earn in the Bay Area
The Bay Area provides many job opportunities for its residents. However, there are many factors that will inform how much income you can make here and whether it is a good salary or not. These include taxes, type of jobs, living costs in your location, and work experience.
Type of Jobs
While the San Francisco Bay Area has a strong labor force, your occupation and the companies you work for will play a vital role in determining how much average salary you can make. Good salaries in this metro area greatly vary by industry and whether you work for the private sector (private companies often pay good money) or the government.
Today, the Bay Area is famous for its thriving tech industry, which unsurprisingly offers some of the highest average salary ranges and accounts for slightly over 20% of all jobs in San Francisco. The rest are mostly in the medicine and finance industries. According to Salary.com, some of the top earners in the Bay Area are:
- Chief company executives
- Software engineers
- Physicians and Psychiatrists
- Machine learning managers
- Data infrastructure managers
- Investment managers
- Finance and Insurance managers
- Computer and Information Systems Managers
- Architects and structural engineers
As you can see, most of these jobs are from the tech industry.
Other common jobs with competitive salaries in the Bay Area are:
- Project managers
- Nurse practitioners
- Human resource managers
- Sales managers
- Financial advisors
Cost of Living
The cost of living in the San Francisco Bay Area is over 90% higher than the national average, making it hard for most people on a budget to afford. You will likely spend more on entertainment, groceries, rent, transportation, and eating out in restaurants depending on your specific location.
So if you are moving here from another state or city, you must be prepared to pay more for most necessities, especially rent, food, and transportation. You will have to negotiate a higher salary or find a job that pays a higher average salary in order to afford a good life.
Here is a breakdown of the average costs of common items you need to live comfortably:
|Rent||The median rent for a small apartment in the Bay Area is $2,600, while medium apartments go for $3,300, and large apartments go for $4,100. Rents for some apartments go as high as $5,000.|
|Transportation||If you regularly use public transport, taxis, and ride-hailing apps to move around the Bay Area, you can spend up to $3,000 annually.|
|Food||On average, a household in the Bay Area spends $2,000 for food and groceries, while a single person spends $800 monthly. Some households with more members might spend more.|
|Medical Insurance||The annual medical payment for a single working adult in the Bay Area averages $1,146. The family covers cost at least $2,000. Note that these bills can significantly be higher depending on your needs, age, and plan category, among other factors.|
California has one of the highest income tax rates in the country, with a base sales tax rate of 7.25%, which is higher than other states. It also has a top marginal income tax rate of 12.3%, which is the highest in the country. The income taxes in the Bay Area if you are filing as a single person are as follows:
|Tax rate||Taxable income bracket|
|1%||$0 to $9,325|
|2%||$9,326 to $22,107|
|4%||$22,108 to $34,892|
|6%||$34,893 to $48,435|
|8%||$48,436 to $61,214|
|9.30%||$61,215 to $312,686|
|10.30%||$312,687 to $375,221|
|11.30%||$375,222 to $625,369|
|12.30%||$625,370 or more|
Bear in mind that you will also be required to pay other taxes whenever applicable. These include real property tax, inheritance/estate tax, capital gains, self-employment income, and net investment income, among other tax categories.
Your lifestyle affects how much the average salary will be sufficient for you in the San Francisco Bay Area. Core areas to pay attention to include:
- Your preferred location or neighborhood and the social status of the residents (Will affect how much rent you pay)
- How often and where do you shop
- The type of car you drive (affects your car insurance and transportation budget)
- Cost of your medical and life insurance
- The restaurants you regularly dine in
- Your entertainment needs
- Your hobbies and leisure activities
Of course, you can avoid lifestyle creep whereby you spend more than you earn by creating a suitable monthly or annual budget and sticking to it while avoiding the urge to keep up with your peers. You should also set financial goals that necessitate you to save each month to become accustomed to spending less than you earn.
Family Size and Dependents
As a single person living in the Bay Area, you can live comfortably with an average annual salary of $62,000. This is primarily because you will not need a large apartment to live in, your expenditure on food and groceries will be lower than $800 a month, and you can easily maintain a small, cheap car.
As a couple living in the Bay Area, you will need an average salary of $93,720 since you will need a bigger apartment, spend more on transportation costs, and at least $1,000 on food & groceries. You will also pay more for your medical insurance, eating out, and other leisure activities.
For people living with children in the Bay Area, you must make an average salary of $100,000 a year to take care of bills comfortably. With this annual income, you can live in a three or four-bedroom house, spend $2,000 a month on food & groceries, maintain two cars, pay for family medical cover, and educate your kids.
The Bay Area has a diverse employment base that highly favors educated and skilled workers. It is estimated that 33% of job openings in this region require an individual with an advanced degree and many years of experience in their fields.
This makes the Bay Area a suitable place for individuals whose careers are peaking after gaining valuable skills and experience.
On the other hand, the Bay Area is equally attracting entry-level graduates in droves, for example, in the legal, finance, healthcare, manufacturing, and tech companies. However, one must be prepared for stiff competition from thousands of other graduates and low salaries as they gain hands-on experience before getting to more lucrative positions.
What Average Salary Is Considered Middle-Class in the Bay Area?
The middle-class annual salary in the Bay Area is between $65,030 for a single person and $227,605 for a family of four. According to Payscale, the average base salary in the Bay Area is $108,000 yearly.
What Is Considered Poor in the San Francisco Bay Area?
A study on poverty in the Bay Area shows that an average salary of $5,000 a month in the Bay Area is considered poor. However, according to a report by the National Low Income Housing Coalition, renters need to make $61.50 per hour to afford a standard two-bedroom apartment in more expensive areas of the Bay Area.
There are so many factors that determine what a good salary in the Bay Area is, and with the fast-rising costs of living, especially housing, you should target an average salary of over $100,000. Regardless, depending on where you stay in the Bay Area counties, you can live comfortably with a slightly lower annual income.