How Much Do People Get Paid to Live in Alaska?

Living in Alaska presents a unique financial landscape, distinct from most other places in the United States. The state offers certain financial advantages, but the overall economic picture is shaped by various factors, including specific state programs and the general cost of living.

The Permanent Fund Dividend

The Permanent Fund Dividend (PFD) is an annual payment to eligible Alaska residents, originating from the state’s oil wealth. The Alaska Permanent Fund Corporation manages this constitutionally established investment fund, ensuring current and future generations benefit from natural resources.

To qualify for the PFD, an individual must have been an Alaska resident for the entire preceding calendar year and intend to remain a resident indefinitely. Applicants cannot have claimed residency in another state or country since December 31st of the year prior to the qualifying year. Legal stipulations also apply, including not being sentenced or incarcerated for a felony or certain misdemeanors during the qualifying year. Applicants must also have been physically present in Alaska for at least 72 consecutive hours in the previous two years, with any absence exceeding 180 days requiring an allowed reason.

The annual PFD amount varies each year, based on a five-year average of the Permanent Fund’s performance. This amount is reduced by prior-year obligations, operational expenses, and other state agency appropriations before being divided among eligible applicants. The fund has paid out an average of about $1,600 annually per resident (adjusted to 2019 dollars).

PFD amounts have varied significantly. The lowest individual dividend was $331.29 in 1984, while the highest nominal dividend was $3,284 in 2022, which included a $662 energy relief payment. Other notable amounts include $1,702 in 2024 and $1,312 in 2023.

The application period for the PFD runs from January 1 to March 31 each year. Applications can be submitted online or via paper. A separate application must be filed for each individual, including children. Required documentation includes proof of Alaska residency and, for direct deposit, a bank account number. The PFD is usually paid in early October.

Cost of Living in Alaska

The cost of living in Alaska is approximately 33% higher than the national average. This elevated cost is influenced by the state’s remote location and the logistical challenges of transporting goods.

Housing expenses are about 28% higher than the national average, though prices vary across the state. For example, the average home value in Anchorage was around $407,428 as of July 2025. Rent for a one-bedroom apartment in Anchorage averages around $1,672 per month, which is lower than the national average of $2,072.

Groceries are about 27% higher than the rest of the country due to shipping expenses. Utilities are also about 24% higher than the national average. Monthly costs for basic utilities, including electricity, gas, water, and sewer, average around $400.12, rising to $691.12 when internet and phone services are included.

Transportation costs are elevated due to the state’s vast size and limited infrastructure. Gas prices are slightly above the national average, but can increase significantly in rural areas due to logistical challenges. Vehicle maintenance can also be more frequent and costly due to harsh weather conditions.

Earning Potential and Job Market

Earning potential in Alaska is influenced by a unique job market. Average wages are generally higher than the national average, often to offset the increased cost of living. For instance, Alaska’s average weekly wage of $1,310 in May 2025 had a purchasing power equal to $1,288, ranking it 6th among states.

The Alaskan economy is driven by resource-based industries. Oil and gas remain a significant sector, supporting many jobs. Other major industries include fishing, tourism, and mining. Healthcare is also a prominent and growing sector, particularly in Anchorage, which is the top job-producing sector in the city and state.

Government employment, including federal and state positions, is a substantial component of the job market, providing many jobs across the state. Construction and transportation industries also offer employment opportunities. Wages in many sectors are adjusted upwards to account for the higher cost of living and specialized skills often required in Alaska’s unique environment.

Alaska’s Tax Environment

Alaska’s tax environment offers benefits that contribute to residents’ disposable income. The state does not levy a statewide individual income tax, meaning residents do not pay state taxes on their earnings. Retirement income, including pensions and Social Security benefits, is also not taxed at the state level.

Alaska does not impose a statewide sales tax. However, many local municipalities, including boroughs and cities, can impose their own local sales taxes. These rates range from 2% to 5%, though some areas may have rates as high as 9.5%. Anchorage and Fairbanks do not charge a local sales tax.

Property taxes are assessed at the local level, with rates varying by municipality. Some boroughs levy property taxes, and oil and gas properties contribute significantly to local government revenue. Alaska has one of the lowest tax burdens in the United States, positively impacting residents’ financial well-being.