Income Percentile Calculator
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*Estimates based on current US Census and IPUMS ASEC distribution data.
Understanding Income Percentiles
An income percentile is a measure used to determine where a specific income level falls within a broader population. For instance, if your income is in the 70th percentile, it means you earn more than 70% of the individuals (or households) in that data set, while 30% earn more than you.
Using an income percentile calculator helps put your earnings into context within the national economy. It is often more useful than looking at a "mean" or average, as the average is often skewed significantly by extremely high earners.
Key Terms Explained
- Median Income (50th Percentile): The exact middle point of the distribution. Half of the population earns more, and half earns less.
- Top 1%: This represents the highest tier of earners. In the United States, this often requires an annual individual income exceeding $550,000 depending on the current fiscal year data.
- Pre-Tax vs. Post-Tax: Most percentile calculations use "gross" or pre-tax income as it is the standard unit for census data.
How Is Income Distributed?
In most modern economies, income distribution follows a "Power Law" or "Pareto" distribution rather than a normal bell curve. This means there is a very high concentration of people at the lower and middle income levels, with a "long tail" of very high earners stretching toward the right of the graph.
Example Percentile Scenarios
| Annual Income | Approx. Individual Percentile | Socioeconomic Status |
|---|---|---|
| $35,000 | ~32nd Percentile | Lower Middle Class |
| $75,000 | ~58th Percentile | Middle Class |
| $150,000 | ~84th Percentile | Upper Middle Class |
| $250,000 | ~94th Percentile | Upper Class / Top 10% |
Why Percentile Matters More Than Average
The "average" income in a country might be $70,000, but if one person earns $10 million and nine people earn $0, the average is $1 million. This doesn't represent the reality of the nine people. The median (50th percentile) and other percentile ranks provide a more accurate picture of what "typical" looks like.
Frequently Asked Questions
What is the difference between individual and household income?
Individual income counts only what you earn. Household income combines the earnings of everyone living in your home (spouses, partners, etc.). Household percentiles are generally higher for the same dollar amount because many households have two earners.
Is this income before or after taxes?
This calculator uses gross annual income (before taxes, health insurance, or 401k deductions) because this is the data format used by most government census agencies.