What Is 6 Figures in Money? A Definition of the Term

The phrase “six figures” is often encountered when discussing income or financial status. It describes a range of earnings, often signifying substantial financial achievement. Understanding its meaning provides clarity regarding income discussions.

Defining Six-Figure Income

A six-figure income refers to a monetary amount with six digits. This range begins at $100,000 and extends up to $999,999. The “figures” relate directly to the number of digits before any decimal point in a whole dollar amount. For instance, an income of $125,000 is a six-figure income, as is $500,000, and even $999,999.

Understanding Income Figures

The concept of “figures” in income terminology extends beyond just six figures, providing a consistent framework for describing various earning levels. For example, a five-figure income encompasses amounts from $10,000 to $99,999, such as $15,000 or $80,000. These incomes are characterized by having five digits. In contrast, a seven-figure income starts at $1,000,000 and goes up to $9,999,999, with examples including $1,500,000 or $7,000,000. This pattern continues, with eight-figure incomes starting at $10,000,000, illustrating that the number of “figures” consistently corresponds to the count of digits in the whole dollar amount of the income.

Components of Your Income

When discussing income levels like “six figures,” the amount typically refers to gross income. Gross income is the total amount an individual earns before any deductions, such as taxes, insurance premiums, or retirement contributions, are subtracted. This contrasts with net income, often called “take-home pay,” which is the amount remaining after all deductions have been made. For financial discussions and reporting, including on documents like Form W-2, gross income is the standard measure.

Various sources can contribute to an individual’s total gross income. The most common is salary and wages earned from employment, which includes regular pay, overtime, and commissions. Bonuses, often provided as additional compensation for performance, also contribute to gross income. Individuals who are self-employed or operate a business count their business profits as part of their gross income.

Investment income further adds to an individual’s total earnings. This category includes dividends received from stocks, interest earned from savings accounts or bonds, and rental income from properties. Capital gains, which are profits realized from the sale of assets like real estate or stocks, also form part of gross income. All these diverse income streams combine to establish the total gross income, which is then categorized by its “figure” status.