United States: Tax, Salary & Cost of Living Guide

Verifindex Score

3.26 / 5 - BBB

Ranked #21 of 21

Effective tax rate at the $100,000 USD benchmark: 27.3%

Key stats

Median annual salary

US$63,000 (US$63,000 USD)

Cost of living index (US = 100)

100.0

Safety

63.43805881062855/100

Healthcare

88/100

Climate: average annual temperature

9.5°C / 49.0°F annual average (1991–2020). Informational, not weighted in Verifindex Score

Happiness

66/100. Informational, not weighted in Verifindex Score

Freedom

69.5546088/100

Tax snapshot (employed, Jan – Dec 2026)

About United States for expats

The United States has a multi-layered tax system. Federal income tax is progressive with seven brackets ranging from 10% to 37%. On top of this, most states levy their own income tax, with rates varying from zero (in states like Texas, Florida, and Nevada) to over 13% in California. The combined federal and state burden means effective tax rates can differ by 10 percentage points or more depending on where you live.

FICA (Federal Insurance Contributions Act) deductions apply to all employees: 6.2% for Social Security on earnings up to $184,500 and 1.45% for Medicare with no cap. An additional 0.9% Medicare surcharge applies to earnings above $200,000. These are separate from income tax and are not optional.

The cost of living in the US varies enormously. New York, San Francisco, and Los Angeles are among the most expensive cities globally for housing. Meanwhile, cities in the South and Midwest offer substantially lower costs. A $100,000 salary in Austin, Texas (no state income tax) provides a very different lifestyle than the same salary in Manhattan.

Healthcare is the single biggest financial wildcard for anyone considering the US. There is no universal public system. Employer-sponsored insurance is the norm, but out-of-pocket costs (deductibles, co-pays, and uncovered treatments) can be high even with good coverage. Expats should always factor in healthcare costs when comparing US salaries against other countries.

Salary & income

The median US full-time wage is approximately $63,000 per year based on Bureau of Labor Statistics 2025 data. This figure masks wide variation: technology roles in major metros regularly exceed $120,000, while service and retail sector jobs often fall below $35,000.

Most employees receive a W-2 and have federal and state taxes withheld by their employer. Self-employed workers (1099 contractors, freelancers, sole proprietors) pay self-employment tax of 15.3% on top of income tax, though half of this is deductible. S-Corp structures are commonly used by higher-earning self-employed workers to reduce self-employment tax exposure.

The standard deduction ($15,000 for single filers in 2026) means many workers pay no federal tax on their first $15,000 of income. Itemised deductions for mortgage interest, state and local taxes (capped at $10,000), and charitable contributions can further reduce the tax bill for homeowners and higher earners.

Key things to know

US healthcare is predominantly private and employer-linked. Plans vary widely in quality and cost. A typical employer-sponsored plan might cost $200 to $600 per month for an individual (with the employer covering a portion), plus deductibles of $1,000 to $5,000 before coverage fully kicks in. The Affordable Care Act marketplace provides options for those without employer coverage, with subsidies available for lower incomes. Prescription drug costs are notably higher than in most other developed countries.

The US offers several visa categories for workers. The H-1B (specialty occupation) is the most well-known but is subject to an annual lottery. The L-1 (intracompany transfer), O-1 (extraordinary ability), and TN (for Canadian and Mexican citizens under USMCA) are alternatives. Green card sponsorship through employment is possible but typically takes several years. Always verify current requirements with a qualified immigration attorney or the official USCIS website.

The US climate spans everything from subtropical (Florida, Hawaii) to arctic (Alaska) to arid desert (Arizona, Nevada). Most of the continental US experiences distinct seasons. Summers can be intensely hot and humid in the South and Midwest (35 to 40°C), while winters in the Northeast and Midwest bring heavy snow and temperatures well below freezing.

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