Why the same salary ranks differently depending on who measures it
A US income of $100,000 is in the top 18% by Census data but the top 26% on the broad international measure. Here is why both are right.
If you type the same income into different calculators, you can get very different answers. That is not necessarily an error. It usually means the calculators measure different kinds of income for different groups of people.
Two ways of counting income
National statistics count the income people actually report or receive: wages, self-employment income, pensions, benefits, and (depending on the source) interest and dividends. In the United States, the Census Bureau’s “total money income” is the standard. In the United Kingdom, HM Revenue & Customs publishes the incomes of people who pay income tax.
The international measure used by the World Inequality Database is pre-tax national income per adult. It is designed so that everyone’s income adds up to the country’s national income in the national accounts. That means it also includes things that never reach a payslip:
- employer contributions to pensions and social insurance,
- profits that companies keep instead of paying out (allocated to their owners),
- the rent that homeowners “pay themselves” by living in their own home,
- investment income earned inside pension funds.
Because the international measure is bigger for almost everyone, the same salary ranks lower on it.
What that does to your rank
| Amount | Official national statistics | Broad international measure (WID) |
|---|---|---|
| US: $50,000 | top 43% | bottom 47% |
| US: $100,000 | top 18% | top 26% |
| US: $200,000 | top 4.5% | top 7.9% |
| UK: £30,000 | top 34% | bottom 37% |
| UK: £50,000 | top 14% | top 32% |
| UK: £100,000 | top 2.9% | top 7.5% |
For a UK taxpayer earning £50,000, HMRC data put them in the top 14% of adults, while the broad measure puts the same £50,000 only in the top 32%. Part of the UK gap comes from population: HMRC covers taxpayers, and about 16 million adults earn too little to pay income tax. We place them below the personal allowance, so the national rank is among all adults.
Which one should you use?
- To compare yourself with people in your own country, national statistics are usually the more intuitive yardstick: they use the same definition as your tax return. That is why the calculator uses official person-level data for income in Norway, Sweden, Denmark, Finland, the United Kingdom and the United States.
- To compare across countries, you need one definition everywhere. That is what the World Inequality Database provides, and what the calculator uses for global ranks and for the other countries.
A note on households
Most national statistics are per person, but some are per household. Two people sharing a $150,000 household income are not in the same position as one person earning $150,000 alone. WealthPercentile ranks adults, and splits couples’ wealth equally. If you share finances with a partner, enter the joint amount and tick “joint amount” — the calculator then counts your half.
See also: Is $100,000 a good income in the United States? and Is £50,000 a good income in the UK?