Is $120k a Good Salary in NYC? A Look at the Numbers

A $120,000 annual salary in New York City often prompts questions about its sufficiency for comfortable living. The city’s unique economic landscape, characterized by elevated costs, means this income requires a thorough financial assessment. Understanding the true purchasing power of a $120,000 salary in this environment necessitates a detailed examination of various financial factors.

Housing Costs in New York City

Housing represents the most significant financial consideration for residents in New York City, consuming a substantial portion of income. Average rental prices vary considerably depending on the borough, neighborhood, and dwelling size. For instance, a studio apartment in Manhattan can start around $2,000 per month, with one-bedroom units ranging from $2,500 to $4,000 or more.

Moving outside Manhattan, boroughs like Brooklyn and Queens offer slightly lower, though still elevated, rental costs. In Brooklyn, studio apartments might begin around $1,500 monthly, while one-bedroom apartments average around $3,560. Queens can present median asking rents around $3,427, indicating that even outside Manhattan, significant housing expenses remain. Proximity to public transportation, amenities, and neighborhood desirability heavily influence these prices.

Overall, the average rent for an apartment in New York City was around $4,031 per month as of August 2025, and $3,260 for a studio. This figure is significantly higher than the national average. A substantial portion of a $120,000 salary will therefore be allocated to housing, potentially exceeding the commonly recommended 30% of gross income.

Essential Non-Housing Expenses

Beyond housing, New York City residents face a range of other unavoidable daily living expenses. Transportation costs are a primary concern, with public transit being the most common mode of travel. The base fare for a subway or bus ride is currently $2.90. A 7-day fare cap of $36 using the OMNY system offers unlimited rides after 12 paid trips, providing a more economical option for frequent commuters.

Utilities also contribute significantly to monthly expenditures. A typical one-bedroom apartment in NYC might incur electric bills ranging from $70 to $100 per month. Gas and internet services add further to these costs, with overall utilities for a single person estimated to be between $150 and $250 monthly.

Food expenses, encompassing both groceries and dining out, are notably higher in New York City compared to national averages. For a single person, grocery costs can range from $200 to over $500 per month. While employer-sponsored health insurance often covers a portion of healthcare costs, out-of-pocket expenses for co-pays, deductibles, and prescription medications remain a factor. Other necessities like personal care items, household supplies, and cell phone plans further contribute to the monthly budget.

Understanding Your Tax Burden

A gross salary of $120,000 in New York City is subject to multiple layers of income taxation, significantly reducing the actual take-home pay. These taxes include federal, New York State, and New York City income taxes, alongside federal payroll taxes. For a single filer, federal income tax is progressive. A $120,000 income falls into several federal tax brackets, with the highest portion taxed at 24%.

New York State also levies its own progressive income tax, which can range from 4% to 10.9% depending on the income bracket. Additionally, New York City imposes its own income tax on residents, further reducing disposable income. These city-specific rates are applied on top of both federal and state taxes.

Beyond income taxes, federal payroll taxes (FICA) are withheld from wages. These include Social Security and Medicare taxes. The Social Security tax rate is 6.2% on earnings up to $168,600, and the Medicare tax rate is 1.45% on all earnings, with no wage limit. For a $120,000 salary, the combined FICA tax rate is 7.65%. Considering these various taxes, a $120,000 gross salary for a single individual in New York can result in an average tax rate of approximately 29.9%, leaving an estimated net pay of around $84,143 per year, or $7,012 per month.

Budgeting and Lifestyle Considerations

After accounting for significant expenses such as housing, essential non-housing costs, and taxes, the disposable income from a $120,000 salary in New York City becomes clearer. With an estimated monthly net pay of about $7,012, and considering average non-rent expenses of around $1,698 for a single person, the remaining funds for discretionary spending and savings are approximately $5,314 before rent. Once rent is factored in, such as an average of $4,031 for a one-bedroom apartment, the remaining disposable income is further reduced to about $1,283 per month.

This remaining amount dictates the feasibility of financial goals like saving for retirement, establishing an emergency fund, or pursuing other investments. While saving is possible, it requires diligent budgeting and prioritization. Discretionary spending, which covers entertainment, dining out, cultural activities, and travel, will need careful management. The city offers a vast array of such opportunities, but indulging frequently can quickly deplete the remaining funds.

Ultimately, whether $120,000 is considered a “good” salary in New York City depends heavily on individual lifestyle choices and financial priorities. While it is a substantial income, the city’s exceptionally high cost of living means it does not afford the same level of luxury or savings potential as it might in other, less expensive urban centers. Living comfortably often involves making trade-offs, such as choosing a smaller apartment, residing in a less central borough, or limiting frequent high-cost activities.