Is a Salary of $85,000 Per Year Good or Bad in Madison, Wisconsin?

Evaluating whether a salary of $85,000 per year is good or bad in Madison, Wisconsin, involves considering multiple factors, including the cost of living, housing expenses, and other general lifestyle expenditures. This article will break down these factors to provide a comprehensive assessment.

Cost of Living in Madison, Wisconsin

Madison has a moderate cost of living compared to national averages, making it an intriguing place to consider income earned. Several key components that contribute to the cost of living in Madison include:

Housing

As of 2023, the median home price in Madison is around $350,000, with average rents for a one-bedroom apartment in the city center typically ranging from $1,200 to $1,600 per month. If your salary includes accommodations, this is a significant benefit as housing costs can take up a large portion of income.

Food

Grocery costs in Madison are roughly in line with national averages, with a single person spending about $300 to $500 a month on groceries, depending on dietary preferences.

Transportation

Public transportation is available, but many residents rely on cars. Gas prices and insurance can add to monthly expenses, which can range from $200 to $400 a month depending on usage.

Taxes

Wisconsin has a progressive income tax system. The effective tax rate for someone earning $85,000 might be around 20-25%, considering federal and state taxes.

Other Expenditures

Utilities (electricity, water, internet), healthcare, and other miscellaneous expenses might add another $150 to $250 per month.

Breakdown of Monthly Expenses

Here’s a rough estimate of monthly expenses for someone living in Madison:

Housing$1,200 Food$400 Transportation$300 Utilities$200 Other expenses (entertainment, healthcare)$300 Total Monthly Expenses$2,700

Conclusion

Annual Expenses: $2,700 x 12 months $32,400
Net Income After Taxes: Assuming a tax rate of around 20%, your take-home pay would be approximately $68,000 after taxes.
Remaining Income: $68,000 - $32,400 $35,600

With a remaining income of about $35,600 per year or about $2,966 per month after essential expenses, a salary of $85,000 in Madison can be considered quite good. It allows for a comfortable lifestyle, savings, and discretionary spending, especially if housing is covered in your salary.

Final Assessment

Overall, $85,000 is a solid salary in Madison, Wisconsin. Particularly if it includes accommodations, it allows for a good quality of life, financial stability, and the ability to enjoy leisure activities.