Is $120,000 a good salary in Austin?

Austin, Texas has become one of the most desirable cities to live in the United States thanks to its vibrant culture, thriving job market, and high quality of life. But with a growing population and increasing demand, the cost of living in Austin has also been on the rise. So a key question many people considering a move to Austin are asking is: Is a salary of $120,000 enough to live comfortably in this booming city? Let's take a closer look at the numbers.

Cost of Living in Austin

According to Numbeo, the cost of living in Austin is 1% higher than the national average as of May 2024. Some notable expenses:

- Rent for a 1-bedroom apartment in the city center averages $2,263/month 

- Utilities for a 915 sq ft apartment average $165/month

- A meal at an inexpensive restaurant costs around $18

Payscale provides additional cost of living data for Austin:

- Housing expenses are 16% higher than the national average

- Grocery prices are 12% lower than the national average

- Healthcare costs are 3% higher than the national average

So while certain costs like housing and healthcare are higher in Austin compared to the rest of the country, this is somewhat offset by lower prices for groceries and utilities. Overall, the cost of living in Austin is only slightly higher than the U.S. average.

Average Salaries in Austin

To determine if $120,000 is a good salary, it's helpful to compare it to what most people in Austin are earning. According to Payscale, the median annual salary in Austin is around $65,250 as of May 2024. 

Salaries can vary significantly by industry and occupation though. For example, the average salary for a software engineer in Austin is $93,000 while a project manager earns around $75,000 on average.

At $120,000 per year, you would be earning nearly double the median salary in Austin. This would put you in the top 20% of earners in the city.

Affordability of Housing

For most people, housing is the biggest expense. Rents and home prices have been soaring in Austin in recent years due to high demand. 

RentCafe shows average rents in Austin are:

- $1,707 for an average apartment 

- $1,470-$1,390 for a 1-bedroom

- $1,630-$1,720 for a 2-bedroom

To comfortably afford a $1,700 apartment, experts recommend earning at least $5,100 per month or $61,200 per year. 

For homebuyers, the median home price in Austin is around $550,000-$570,000 according to Texas Real Estate Source. To afford a home at that price with a 10% down payment, you would need to earn around $130,000-$135,000 per year.

So with a $120,000 salary, you could very comfortably afford to rent in Austin and could likely afford to buy a home, especially if you have a dual income household. Housing would be very affordable to you compared to the average Austin resident. Austin cleaning service prices are very reasonable, making it a worthwhile splurge.

Taxes

One financial advantage of living in Texas is that there is no state income tax. However, sales and property taxes are higher compared to other states.

The sales tax rate in Austin is 8.25% and property taxes average 1.86% of home value according to Spyglass Realty. So that is an added cost to factor in if you plan to buy a home.

The Austin Independent School District tax rate for 2024 is $0.8595 per $100 of taxable value. So for a $500,000 home, annual school district taxes would be around $4,300.

Even with the higher sales and property taxes though, a $120,000 earner in Austin will likely pay less in overall taxes compared to living in a state with an income tax. The lack of a state income tax allows you to keep more of your $120,000 salary.

Job Opportunities 

In addition to the cost of living, it's important to consider the job market and opportunities for career growth. Austin has been one of the fastest-growing major metros in the country thanks to its booming tech scene.

Major employers in Austin include Apple, Dell, IBM, Amazon, and Tesla. The city has become a hub for industries like advanced manufacturing, clean technology, digital media, and more. In 2024, the Austin Chamber of Commerce reported that jobs in Austin have grown by 22% over the past five years.
This strong job market bodes well for high earners like those making $120,000 or more. There are ample opportunities to grow your career and increase your earnings in a city like Austin.

Quality of Life

Finally, it's important to factor in quality of life when determining if a city is affordable. Even if you can comfortably afford housing and other expenses, you'll ultimately be unhappy if you don't enjoy living in the city.

Austin is known for its vibrant culture and endless activities. The city has a thriving live music and arts scene, an amazing food culture, abundant outdoor recreation, and great weather. It's a very livable city with something to offer everyone.

US News & World Report ranked Austin the #1 Best Place to Live in the US for 2022-2023. The city scored high marks for desirability, job market, quality of life, and net migration. 

So while the cost of living may be a bit higher than other cities in Texas or the US average, many people find the premium to be well worth it for the lifestyle Austin offers. With a $120,000 salary, you would be able to enjoy all Austin has to offer while still living well within your means.

The Verdict

So is $120,000 a good salary in Austin? The answer is a resounding yes. Based on the cost of living data, a $120,000 salary would allow you to live very comfortably in Austin. You could afford a nice apartment or even buy a home, cover all your expenses, and still have plenty of disposable income left over to save or enjoy the city life.

Compared to the median household in Austin earning $65,250, a $120,000 earner is in a great position. You would be among the top 20% of earners with plenty of opportunities to advance your career in Austin's robust job market.

And with no state income tax, you get to keep more of your $120,000 salary compared to living in many other major metros. While sales and property taxes are higher, it's still likely that you'll owe less in overall taxes.

When you factor in Austin's high quality of life and desirability, a $120,000 salary should provide for a very comfortable life in this vibrant city. Just be sure to budget for higher housing costs and property taxes if you plan to buy a home. And don't forget to take advantage of all the city has to offer - from trying new restaurants to listening to live music to enjoying the outdoors. 

One tip, with more disposable income, you may want to consider hiring a cleaning service Austin to help maintain your home so you have more free time to experience the city.