How Much Income Puts You in the Top 1%, 5%, 10%?

How much money do you need to earn to be in the top 1%, 5%, or 10% of earners? The amount varies by location and local wage trends.

Individuals in the top 10% earn at least six figures annually. In some areas, those in the top 1% must make over $1 million per year, while in others, the threshold is lower. Both the earnings and wealth of top earners have increased in recent decades.

Annual Incomes of Top Earners

Data from tax year 2021 (as reported on Americans' 2022 tax returns) shows that taxpayers in the top 1% had adjusted gross income (AGIs) of at least $682,577, according to an analysis by the Tax Foundation. Those in the top 5% had AGIs of at least $252,840, while breaking into the top 10% required an income of at least $169,800.

Those numbers are averages and can vary widely across the country. According to GoBankingRates, also using 2021 data but adjusting it for inflation, qualifying for the top 1% now requires an AGI of over $1 million in five states (California, Connecticut, Massachusetts, New Jersey, and Washington), with Connecticut having the highest threshold, of $1,192,947.

Meanwhile, residents of Mississippi, New Mexico, and West Virginia could qualify with less than $500,000 in AGI, with West Virginia setting the lowest bar at $435,302.

Note that AGI includes both earnings from work and taxable investment income. An Economic Policy Institute (EPI) study examined Social Security Administration data to break down the top tiers regarding average annual earnings. Here is what it found:

Data from the 2022 census found that households at the highest quintile (incomes higher than 80% of other earners) had a mean income of $277,300 per year. The top 5% of households had a mean income of $499,900.

Income and Wealth Disparities Between Top and Bottom Earners

Income inequality has become a major political issue in recent years, driven partly by rising disparities between the highest earners and everyone else.

These disparities are most dramatic when examining wage distribution since 1979. According to the EPI, "The top 1% earned 14.6% of all wages in 2021—twice as high as their 7.3% share in 1979. The bottom 90% received just 58.6% of all wages in 2021, the lowest share on record and far lower than their 69.8% share in 1979."

Based on the same data, the EPI notes that wages for the top 1% and top 0.1% surged by 206.3% and 465.1%, respectively, while wages for the bottom 90% grew by just 28.7%.

Statistics on individual wealth reflect similar trends. Between Q1 1990 and Q2 2024, the wealth held by the top 1% grew from 16.5% to 23.3%, while the wealth held by the top 2% to 20% rose from 43.7% to 47.4%. At the same time, the percentage held by every other group either fell or remained flat.

The Federal Reserve reports that as of Q2 2024, the top 1% now holds 23.3% of the nation's wealth, or nearly three times as much as the 8.1% held by the middle 40% to 60% of U.S. households (often used to define the middle class by economists). This means that the top 20% of Americans control more than 70% of the nation's wealth, leaving the bottom 80% with less than 30%.

The Bottom Line

To be a top earner in the U.S., you'll need to make at least six figures—possibly seven. The wealthiest Americans have grown richer much faster than the rest of the population since at least 1979. The pace of income disparity, particularly among the highest and lowest earners, is striking.