What Is Considered a Good Salary in Alabama?

Defining a “good” salary is complex, transcending a mere numerical value. Various personal and economic elements shape what individuals perceive as adequate compensation. Understanding these factors is crucial for evaluating income potential in Alabama. Individual circumstances, financial aspirations, and economic conditions collectively determine a salary’s true worth.

Understanding What “Good” Means for a Salary

A “good” salary is subjective, reflecting individual finances and aspirations. What one considers sufficient varies based on financial goals like debt repayment, savings, or spending. Household size also plays a role; a salary for a single individual differs from one supporting a family. Personal circumstances, including health, education, or caregiving, further influence income adequacy.

Purchasing power shows how a nominal salary holds different real values by location. A high-cost area salary may offer less disposable income than a lower salary in an affordable region. Evaluating a salary requires looking beyond its face value to what it can buy. A salary’s worth is not just the amount earned, but its capacity to meet needs.

Cost of Living Considerations in Alabama

Alabama’s cost of living is lower than the national average. As of 2023, its cost of living index was 87.9, making it 12% less expensive than the national average. Affordability extends across expenditure categories, though costs vary by metropolitan and rural areas.

Housing expenses are a significant budget item, and Alabama offers low costs. In 2023, the median home price was $295,900, while the average home value was $179,358. For renters, the average monthly rent was $1,048 as of August 2025, with a two-bedroom apartment costing $1,207 per month.

Average utility bills in Alabama are $543 per month, including electricity, gas, cable, and water. Grocery costs are also lower, with Alabamians spending $271.75 per person per month on groceries. This equates to $3,261 annually.

Healthcare expenses in Alabama are among the lowest in the nation, averaging $6,545 per capita annually. Transportation costs are lower, ranging from $5,477 to $15,530 annually. Overall, the average annual cost of living for a single individual was $39,657 in 2023.

Average Salary Benchmarks in Alabama

Alabama’s income landscape provides context for evaluating a “good” salary. In 2023, the median household income was $62,027. The average annual household income was $86,225. These figures represent total household income for those over 15, including wages, pensions, and investments.

The average income per person in Alabama was $34,835. Single-person households had a median income of $31,564. Full-time workers earned an average of $68,391, with a median of $51,679. Income varies by age: 25-44 year olds had a median wage of $68,817, while 45-64 year olds earned $75,342. Younger workers under 25 and those over 65 earn less, with median incomes of $31,909 and $48,232 respectively.

Alabama’s median income was 20.0% lower than the national median household income in 2023. The average annual salary across all occupations was $49,274 as of June 2025. This translates to $23.69/hour, $947.58/week, or $4,106.17/month. Most salaries range from $34,705 to $61,370 annually.

Factors Influencing Salary Levels

Several factors contribute to salary variations. Industry significantly impacts earning potential. Key industries include aerospace, automotive manufacturing, healthcare, education, and heavy industries.

Major automotive manufacturers like Honda, Hyundai, and Mercedes-Benz have facilities. The aerospace sector, with companies like Airbus and Boeing, creates thousands of jobs. Healthcare and social assistance, retail trade, and manufacturing were top employment sectors in 2025.

Experience correlates with higher earnings. Salaries increase as individuals gain years in their profession. Education is another salary determinant.

Associate degree holders earned $48,600, while bachelor’s degree holders earned $59,000 on average. Master’s degree holders earned 26% more than bachelor’s recipients; doctoral or professional degrees more than doubled bachelor’s earnings. In 2023, only 28% of Alabama’s population held a bachelor’s degree or higher.

Geographic location influences salary. Metropolitan areas like Huntsville, Birmingham, and Mobile offer higher salaries. This is due to concentrated higher-paying industries and demand for specialized skills in urban centers. Huntsville and Mobile, for example, have seen job growth in aerospace, advanced manufacturing, and shipbuilding. Supply and demand for specific skills also influence salaries; high-demand professions with limited skilled professionals command higher compensation.