How Much Is 5 Figures? A Simple Guide to Understanding Large Sums of Money

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5 figures is an amount that refers to a number between or equal to $10,000 and $99,000. This is a 5 digit number that is used in conversations talking about businesses, careers, and finances. 

A 5 figure salary usually includes your salary at work, any commissions or bonuses you make, and other earnings outside of your base income.

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A large majority of the population in the U.S. earns a 5 figure salary and lives comfortably, especially if you’re closer to the higher range of 5 figures.

However, how comfortable you are greatly depends on where you live in the U.S., since cities and states can vary widely in cost of living.

For example, a 5 figure salary will go a lot farther in a small town in Illinois, versus a major city in California. There are also other important factors to consider such as your lifestyle and spending habits.

Understanding 5 Figures

You may have heard someone say that their income is 5 figures.

What does earning 5 figures mean?

In the next section, we go over what 5 figures are and share some examples to help you further understand this term.

What are 5 Figures?

5 figures refers to a number between $10,000 and as high as $99,999. This is any number that has 5 digits. An example is $12,345. That is a 5 figure number and so is $90,000.

When people say they have a “5 figure salary”, they are saying their yearly income falls within $10,000-$99,999.

There is quite a significant income between a person with a $10,000 salary and a person with a $90,000 salary.

Examples of 5 Figures

Here are a few examples of what 5 figures looks like in different careers:

  • An entry-level receptionist will typically earn around $30,000 a year.
  • A website designer may charge $50/hour, which can result in a 5-figure income if they work full-time hours.
  • A garbage collector has an average salary at $40,000.

5 figures can also refer to other financial amounts, like the total cost of a car or RV. If you buy a car that is worth 5 figures, this can be between $10,000 and $99,999.

As you can see, there are many jobs that are in the 5 figure area. Knowing this will help you better understand what jobs to look for and how you can negotiate your salary.

5 Figure Careers

Are you looking for a 5-figure salary job? There are many options available to you.

Here are a few most common type of 5 figure jobs.

Entry-Level 5 Figure Careers

Entry-level jobs typically start with a 5-figure salary and they are a great way to start your career. These careers typically require almost no experience and can be found in most industries.

Here are some examples of entry-level 5 figure jobs.

  • Sales Associate: You can work in a variety of industries as a sales associate, including retail, real estate, and even insurance. The starting pay for this job is typically between $20,000 and $45,000 a year.
  • Customer Service Representative: A customer service rep is responsible for supporting customers through concerns, questions, and other issues. Starting pay is between $25,000 and $40,000 per year usually.
  • Administrative Assistant: Administrative assistants provide support to people at their company, typically an executive and other professionals. This job typically pays between $25,000 and $40,000 a year.

High-Paying 5 Figure Careers

There are many jobs in the higher 5 figure salary area, but you’ll need to have experience and certain qualifications depending on the industry and job.

Here are a few examples of high paying 5 figure jobs.

  • Bartender/servers: Many bartenders and servers make 5 figures (with some even making 6 figures) and can make a comfortable income.
  • Medical assistant: Medical assistants are in high demand and have an average income of $40,000.
  • Owning a small business: Many small businesses make a 5 figure income and whether they are on the lower or higher end depends on many factors.

A 5 figure salary might not be enough for you depending on where you live or if you have outstanding debt.

However, it’s a good starting point for most people so they can get experience and time in a certain field.

Cost of Living and 5 Figures

A 5 figure salary can go far depending on how you spend it. One of the most important factors that will affect your spending is where you live. 

Here’s what you should know about 5 figures and cost of living.

Rent and Living Costs

People on a 5 figure salary often have rent as their biggest expense.

If your rent is high and if it’s possible for you to get a remote job, you may want to consider moving to a low cost of living area. This can greatly reduce how much you spend on rent each month and make a huge difference in your annual cost of living.

It’s likely that rent is taking up a significant portion of your income. If you earn a 5 figure salary, no more than 30% of your income should go to rent.

If you’re earning $50,000 a year, you should try to spend less than $15,000 a year on rent, or $1,250 each month.

You also need to consider other living costs such as utilities, food, transportation, entertainment, childcare, etc. All of these things greatly vary depending on where you live.

For example, someone in a big city may need to spend more money on transportation and entertainment rather than if you lived in a small town.

Budgeting on a 5 Figure Salary

Living on a 5 figure salary means it’s important to stick to a budget. This will help you spend your money wisely and avoid overspending and going into debt.

Here are a few tips for budgeting on a 5 figure salary.

  • Use apps for saving money: Ibotta and Rakuten are great ways to get cash back on everyday items you purchase.
  • Use a meal plan when shopping for groceries.
  • Buy generic items over name brand.
  • Use a budget app to keep track of your finances.
  • Read books on finances and get comfortable with managing your money
  • Meet people who also have financial goals and don’t keep up with the Joneses
  • Instead of going on vacations every few months, try to incorporate staycations in your area

Everyone’s financial situation is different so what works for one person may not work for another.

What is important is finding ways to save money that work for you and your family.

Taxes and 5 Figures

You are required to pay taxes on your earnings when you earn a 5 figure income. The amount you owe in taxes will depend on where you live, income level, filing status, and many other things.

Now we will discuss tax rates and deductions for 5 figure incomes.

Tax Rates for 5 Figure Incomes

What you pay in taxes on a 5 figure income depends on your income level and filing status. The IRS has several different tax brackets depending on your income level.

For example, in 2023, if you are single and your taxable income is between $10,000 and $40,000, your tax rate is 12%.

If your income is between $40,000 and $86,350 in 2023, your tax rate is 22%. These rates are always changing.

Deductions for 5 Figure Incomes

You can claim deductions when you file your taxes on a 5 figure income.

Here are a few common deductions for people earning 5 figures.

  • Standard deduction: This is a deduction that any taxpayer can claim. In 2023, the deduction for singer filers is $12,550. For example, if you’re income is $30,000, you can deduct $12,550 from your income, leaving you with a taxable income of $17,450.
  • Retirement contributions: If you contribute money to a qualified retirement account like a 401(k) or IRA, you can deduct the contributed amount from your taxable income. 
  • Student loan interest: If you’re paying off student loans and paid off interest, you can deduct up to $2,5000 from your taxable income.
  • Charitable donations: If you donate to a qualified charitable organization, you can deduct the amount of your donation from your taxable income.

Make sure to keep track of your deductions so you are taking advantage of all deductions you are eligible for.

To sum things up, you’re required to pay taxes on a 5 figure income.

How much you pay in taxes will depend on your filing status, income level, and other things. Reduce your taxable income by claiming certain deductions that you are qualified for.

It’s important to talk to a qualified tax professional regarding all of the deductions you can qualify for.

Building Wealth on 5 Figures

You can build wealth on a 5 figure income and I’m going to tell you how. First, you need the right mindset and strategy going forward.

Investing on a 5 Figure Income

One of the best ways to build wealth is by investing. You can start with small amounts and they will grow over time.

There are many investment options available including stocks, bonds, mutual funds, and real estate. 

Before you start investing, make sure you do your research and know what you’re doing. You may want to book an appointment with a financial advisor to help you make an informed decision.

There are also many books, courses, and YouTube videos on investing online. Be careful with these because some can be money making schemes. 

I learned how to invest via the course “Build Wealth By Investing In Index Funds“. This course makes it incredibly easy to understand what to do and helps you make informed decisions on your wealth building strategy. 

Net Worth and 5 Figures

Are you wondering what your net worth is? Net worth is the total value of your assets minus your liabilities.

So if you’re earning a 5 figure income, you can increase your net worth by getting rid of debt and increasing assets. 

A great way to increase your assets is by investing. You can also start a side hustle or take on a part-time job to increase your annual income. 

Building wealth takes time and patience, but it can also be a lot of fun and quite rewarding. Set realistic goals and have a weekly or monthly check in on how you’re doing.

Alternative Income Streams

If you want earn a 5 figure income, here are several income streams you can explore.

Side Hustles for 5 Figure Incomes

You can work a side hustle even if you have a full-time job, and often the schedule is quite flexible.

Here a few of my favorite side hustles that can earn you a 5 figure income.

It’s helpful to choose a side hustle you enjoy. It’ll be less stressful, and it can even turn into your full-time job. You can achieve your financial goals faster by increasing your income with a side hustle.

Influencers & Bloggers and 5 Figures

Becoming an influencer or blogger is an option and you can a great living doing this depending on how much work you’re willing to put in.

How influencers & bloggers Make 5 Figures

Influencers can make 5 figures via many methods including affiliate marketing, brand deals, sponsorships, and more. Brands pay influencers to talk about their product and promote it to their followers.

Typically, the more followers an influencer has, the more they can charge for the sponsored partnership.

An influencer can also make money selling things. They can sell things like clothes, makeup, and other merchandise that is related to their brand. This can amount to quite a lot of money.

Many influencers make money via affiliate marketing. This is when someone recommends a product and a follower buys the product via their affiliate link. The influencer gets a portion of the income from the item purchased.

Earning 5 Figures on platforms like YouTube, Instagram and TikTok

YouTube, Instagram, and TikTok are some of the most popular platforms for influencers. You’ll need to have a large following and high engagement rates to do well.

Influencers on YouTube make money through ads, brand deals, and stuff they sale.

You can start earning money on your videos via ads once you have at least 1,000 subscribers and 4,000 watch hours in the last 12 months. 

Influencers on apps like TikTok and IG can make money all sorts of ways, including affiliate marketing (where people buy things through their affiliate links, and they get a portion of the income), selling things like clothes, coffee, and skincare, and so much more. 

What’s going to take you far in the influencer world is building trust with your audience and recommending high quality items. One bad brand deal can be a big deal and really hurt your trust in the community.

This isn’t a small business or side hustle idea that is easy. Influencing takes a lot of hard work and is oftentimes a 24/7 job, and it can be hard to know when to take a break.


5 figures is a term used a lot, and some people don’t understand what it means, but now you do. You can use this term when you’re in a conversation about business, career building, your salary, and more. 

Now that you know what this term means, it can even help you make important decisions about finances.

For example. say you’re running a small business. You can make a 5 figure goal in your business. Maybe your goal is to make $25,000 in one year with your Etsy printable business. That’s a great goal and totally possible. 

If you have a career in insurance, understanding the term 5 figures can help you determine the right amount of coverage for a client.

Depending on a persons income and cost of living, a 5 figure salary may be enough to cover their basic needs, but they may need more insurance coverage to protect certain assets or to protect their family in case of an unexpected loss.

Maybe you’re in tech. You might use the term 5 figures as a benchmark for your salary expectations. 5 figures may be a good starting point depending on your qualifications and how much experience you have.

This can also be a sign that it’s time to negotiate for a higher salary. 

To sum things up, 5 figures has many applications in the world of finance and business.

Understanding this term can help you make informed decisions regarding your finances and future. Next time you hear someone saying 5 figures, now you’ll know what they mean and how it applies to their situation.

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