Is $150k a Good Salary in Chicago?

A $150,000 salary in Chicago is good depending on individual circumstances and financial priorities. While it offers a strong foundation in a major metropolitan area, the comfort and lifestyle it affords are shaped by various financial factors. Understanding how this gross income translates into usable funds and what portion is allocated to essential living costs is a crucial first step. This analysis will delve into tax implications, major expenses, discretionary spending, and personal factors that determine the practical value of a $150,000 salary in Chicago.

Understanding Your Net Income

A gross salary of $150,000 annually translates to a lower take-home amount once taxes and common deductions are considered. For a single filer in 2025, federal income tax will be applied across several brackets, resulting in an approximate federal tax liability of $28,846.76. Beyond federal obligations, Illinois imposes a flat state income tax rate of 4.95%, which would equate to $7,425 annually on this income.

Beyond income taxes, employees contribute to FICA (Federal Insurance Contributions Act) taxes. For 2025, the Social Security tax is 6.2% on earnings up to a wage base limit of $176,100, totaling $9,300 for a $150,000 salary. Medicare tax is 1.45% on all earnings, amounting to $2,175, as there is no wage base limit. These mandatory contributions combine for an annual FICA tax of $11,475.

Beyond required taxes, individuals often opt for pre-tax deductions that reduce take-home pay. A common deduction is for 401(k) retirement contributions, where an average employee contributes around 8% of their salary, or $12,000 annually. Health insurance premiums involve an employee contribution, averaging around $114 per month, or $1,368 annually. After accounting for federal, state, and FICA taxes, with these pre-tax deductions, an annual gross salary of $150,000 could result in an estimated monthly net income of approximately $7,400.

Major Cost of Living Components

Housing represents the largest expense for most residents in Chicago, with rental costs varying significantly by unit size and neighborhood. As of early 2025, average rents for an apartment range from $1,588 to $1,827 per month for a studio, $1,960 to $2,297 for a one-bedroom, and $2,483 to $3,138 for a two-bedroom unit. Desirable areas like Near North Side or The Loop command higher prices, while outer neighborhoods such as Albany Park or Edgewater may offer more affordable options.

Transportation costs in Chicago depend on reliance on public transit or personal vehicle ownership. The Chicago Transit Authority (CTA) offers a 30-day unlimited ride pass for $75. For those choosing to drive, the average full-coverage car insurance in Chicago is approximately $3,644 per year, or about $304 per month. Gasoline prices in Illinois averaged around $3.49 to $3.52 per gallon in 2025, and monthly parking can range from $135 to $190, though downtown rates can exceed $295.

Food expenses encompass both groceries and dining out. A single adult might budget between $300 and $500 per month for groceries. Dining out can add considerably to the budget, with a casual meal for one costing $20 to $35, and a mid-range restaurant experience for two potentially reaching $100 or more.

Utility costs include electricity, gas, and internet. Average monthly electricity bills can range from $120 to $184, while gas bills might be between $90 and $100. Internet service costs $60 to $75 per month. Water, sewer, and trash services may add approximately $50 per month if not covered by landlords.

Healthcare expenses, even with employer-provided insurance, involve out-of-pocket costs such as deductibles, co-payments, and prescription fees. Consumers typically incur over $1,100 annually in out-of-pocket healthcare expenses beyond premiums. While health insurance premiums are deducted from paychecks, these additional costs should be factored into a monthly budget.

Beyond Essentials: Lifestyle and Savings

After covering taxes and major living expenses, a $150,000 salary in Chicago provides capacity for discretionary spending and financial planning. Remaining funds allow enjoyment of Chicago’s diverse cultural scene, including theater, museums, sporting events, and dining out. Hobbies, personal care, and travel also become more accessible. The extent of this discretionary spending depends on managing core expenditures.

Beyond immediate needs, a significant portion of net income should be directed towards savings and investments. Contributing to a 401(k) beyond any employer match can maximize tax-advantaged growth. Building an emergency fund of three to six months of living expenses is important. Setting aside funds for specific personal goals, such as a home down payment, future education, or travel, is also realistic.

Personalizing the $150k Salary

The perception of a $150,000 salary in Chicago is highly personal, influenced by individual circumstances. Marital status and the presence of dependents, such as children, significantly alter the financial landscape. A single individual has more disposable income than someone supporting a family on the same salary. Similarly, existing debt obligations, including student loans, credit card balances, or car payments, reduce discretionary income.

Financial goals play a role in how this salary is perceived. An individual aiming for aggressive early retirement or extensive international travel will need stringent budgeting and higher savings rates. Achieving these ambitions impacts whether the salary feels abundant or adequate.

The career stage and industry contribute to the subjective value of a $150,000 salary. For someone early in their career, this income might represent rapid advancement and financial comfort with potential for future growth. Conversely, for a seasoned professional in a high-cost industry, it might be viewed as a mid-level income, limiting financial flexibility compared to industry averages. Ultimately, the “goodness” of $150,000 in Chicago aligns with an individual’s life stage, financial responsibilities, and aspirations.