Is $200k a Good Salary in Los Angeles?

Is earning $200,000 annually a substantial income in Los Angeles? This question resonates with many considering a move to this Southern California metropolis, known for its high cost of living. A gross salary of $200,000 is significant, but its purchasing power in Los Angeles depends on numerous factors. This article explores what this salary translates to after taxes and how it measures against the city’s major expenses, assessing the financial comfort and savings potential it affords.

Understanding Income and Taxation

A gross annual salary of $200,000 is subject to mandatory deductions before it becomes net income. Federal income taxes are progressive, with different portions of income taxed at increasing rates. For a single filer in 2024, a $200,000 salary falls into several federal tax brackets, with marginal rates applying to specific income tiers. This progressive structure allocates a substantial portion of gross income to federal obligations.

California also imposes its own progressive state income tax, adding another layer of deductions and further reducing take-home pay. Social Security and Medicare contributions, known as FICA taxes, are withheld from earnings. For 2024, Social Security tax is 6.2% on income up to $168,600, while Medicare tax is 1.45% on all earnings, with an additional 0.9% Medicare tax applying to income exceeding $200,000 for single filers.

After accounting for these mandatory federal and state income taxes, along with FICA contributions, a $200,000 gross salary for a single individual in Los Angeles results in an estimated annual net income ranging from $125,000 to $135,000. This translates to a monthly take-home pay of roughly $10,400 to $11,250. This calculation does not include voluntary deductions like health insurance premiums or 401(k) contributions, which reduce spendable income but are common payroll withholdings.

Housing Costs in Los Angeles

Housing is the most significant expense for Los Angeles residents, greatly impacting how far a $200,000 salary stretches. The rental market is competitive, with prices varying by property type and neighborhood. As of August 2025, average rent for a studio apartment ranges from $1,583 to $2,135 per month, a one-bedroom costs $2,062 to $2,800 monthly, and two-bedroom apartments command $2,795 to $4,000 per month.

Rental costs vary across the city. Desirable areas like Santa Monica or West Hollywood are on the higher end, while more affordable options exist in outlying areas or the San Fernando Valley. Beyond base rent, tenants often face additional expenses such as parking fees, pet deposits, and utilities not included in the lease, which can add several hundred dollars to the monthly housing burden.

For homeownership, the Los Angeles County housing market presents a considerable financial hurdle. In July 2025, the median home price in Los Angeles County ranged from $882,839 to $995,000. A $200,000 annual income makes purchasing a median-priced home challenging without a substantial down payment or a dual-income household. Mortgage payments, including property taxes and homeowner’s insurance, consume a large portion of net income, making homeownership a long-term goal requiring significant savings and financial planning.

Other Major Living Expenses

Beyond housing, Los Angeles residents face other substantial living expenses. Transportation costs are notable, as car ownership is often a necessity. Vehicle expenses include car payments, insurance, and fuel, which are higher than the national average. Full-coverage car insurance in Los Angeles ranges from $3,149 to $4,222 annually. Public transportation, like the LA Metro, offers an economical alternative with monthly passes around $100, though its viability depends on commuting routes and residential location.

Food expenses are a significant part of the monthly budget. A single person might spend $300 to $500 monthly on groceries. Dining out adds considerably to food costs, with a mid-range dinner for one often costing $30 to $50 or more, and these figures can quickly escalate with frequent restaurant visits or ordering takeout.

Utility bills, encompassing electricity, gas, water, internet, and mobile phone services, are another recurring expense. Monthly utility costs for an apartment range from $180 to $500, with internet services costing $50 to $70. Mobile phone plans average $121 to $157 per month. Healthcare expenses also factor into the budget, with average annual out-of-pocket costs for employees exceeding $1,100, and deductibles around $1,787.

Additional expenses include personal care and entertainment. Spending on personal care items, gym memberships, and various entertainment activities, such as movies, concerts, or social outings, can add $250 to $332 to monthly expenditures. This category can vary widely depending on individual lifestyle choices. Other potential costs, like student loan payments or childcare, if applicable, further reduce discretionary income.

Evaluating Financial Comfort and Savings

A $200,000 gross salary in Los Angeles allows for a comfortable, yet financially conscious, lifestyle. After taxes and mandatory deductions, the monthly net income of $10,400 to $11,250 must cover substantial housing costs, consuming 20% to over 35% depending on residence type and location. Adding other major expenses—transportation, groceries, utilities, and healthcare—leaves funds for discretionary spending and savings. For instance, a hypothetical monthly budget might allocate $2,200-$3,500 for rent, $400-$600 for transportation, $400-$500 for groceries, $200-$400 for utilities, and $100-$300 for healthcare, leaving $5,000-$6,000 for personal care, entertainment, and savings.

The lifestyle afforded by a $200,000 salary in Los Angeles is comfortable, enabling residents to enjoy many city amenities and cultural offerings. However, it requires careful budgeting and awareness of spending habits. This salary does not automatically grant a lavish lifestyle, especially if one desires to live in highly sought-after neighborhoods or frequently partake in high-cost activities. Saving for significant financial goals, such as retirement, a home down payment, or other investments, requires disciplined financial management.

While $200,000 is a substantial income by national standards, Los Angeles’ elevated cost of living means a larger portion is allocated to necessities. Individuals with this salary can live well, but building significant wealth or achieving major financial milestones necessitates diligent financial planning, budget adherence, and a clear understanding of personal spending priorities. The definition of a “good” salary remains subjective, contingent on an individual’s financial aspirations, debt obligations, and desired quality of life.