How Many People Make 7 Figures a Year?

Many individuals are fascinated by the “seven-figure” income benchmark, representing a significant financial achievement. This prompts questions about how many people truly reach this earning bracket and what characteristics define such high-income earners. Understanding the landscape of these top earners provides insight into the broader economic structure.

Defining Seven Figures

An income categorized as “seven figures” refers to an annual earning that falls within the range of $1,000,000 to $9,999,999. This figure typically represents an individual’s or household’s gross annual income, which is the total income earned before any deductions for taxes, contributions, or other expenses. For instance, a salary of $1,500,000 or business profits of $7,000,000 would both qualify as seven-figure incomes. It is important to distinguish this from net worth, which includes assets like real estate and investments, as seven figures specifically pertains to yearly income flow.

Prevalence of Seven-Figure Earners

The number of individuals earning seven-figure incomes annually in the United States represents a small fraction of the overall taxpayer base. According to Internal Revenue Service (IRS) data for the 2022 tax year, approximately 800,000 taxpayers reported an annual income of $1 million or more. This figure accounts for roughly 0.5% of the 153 million income tax returns filed during that period. The count of these high earners has seen substantial growth, more than doubling from about 470,000 in 2013 to 800,000 in 2022. While seven-figure earners constitute a very small percentage of the population, their income significantly impacts the overall tax revenue, as they contribute a disproportionately high percentage of total income taxes paid.

Demographics and Income Sources

Individuals who achieve seven-figure incomes often share common professional and industrial characteristics. High-earning sectors frequently include finance, technology, healthcare, and various entrepreneurial ventures. Within these industries, common roles for seven-figure earners encompass top-tier executives, such as CEOs and CFOs, and specialized professionals like investment bankers and hedge fund managers. Certain highly compensated professions, including professional athletes and entertainers, also consistently reach this income level.

The primary sources of seven-figure incomes are diverse but often stem from a combination of significant salaries, substantial business profits, and investment gains. For entrepreneurs, income can arise from successful startup exits or the scaling of innovative business models. Those in corporate leadership frequently receive large salaries augmented by performance bonuses, stock options, and other forms of executive compensation. Investment income, derived from strategic investments, also plays a substantial role for many in this income bracket.

Data Collection and Measurement

Data concerning high incomes is primarily collected by governmental bodies like the Internal Revenue Service (IRS) and the U.S. Census Bureau. The IRS compiles its statistics from individual income tax returns, which report Adjusted Gross Income (AGI). This AGI figure reflects income from wages, salaries, business profits, and certain investment earnings, but it generally excludes gains from the sale of assets like real estate or stocks unless they are explicitly reported as income.

The Census Bureau gathers income data through comprehensive household surveys. These surveys capture various income types, including wages, self-employment income, and other forms such as interest and dividends. Differences in reported numbers between sources can arise due to varying definitions of “income” (e.g., pre-tax versus post-tax, inclusion of capital gains), differing reporting methodologies (tax records versus surveys), and the specific populations sampled.