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A Health Savings Account (HSA) can be set up in three simple steps, and once it’s up and running, it can help you bridge the gap between what your health insurance covers and your actual costs, among other benefits.

Let’s face it: Many of us these days select a High Deductible Health Plan, or HDHP, when it comes to health insurance. That means you may be paying a lower monthly premium in exchange for a high deductible. You could potentially get hit with a lot of unforeseen healthcare expenses before your benefits kick in. And even after you meet that deductible, you may have charges that are not reimbursed. A Health Savings Account (HSA) can help you set money aside to fill that gap.

Setting up an HSA may sound intimidating, as if you’ll have to fill out reams of paperwork, but that’s not at all the case! Whether through an employer or on your own, once you’re ready to start saving, the steps to opening an HSA account can be as simple as filling out an online form with basic information — easy peasy.

Here’s a look at the steps involved, plus a few important considerations before you take the leap.

What Is a Health Savings Account (HSA)?

The HSA is over 20 years old. In 2003, Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act which created the Health Savings Account. These accounts were meant to help people with high deductible health plans set aside money to pay for out-of-pocket medical expenses: copays, dental care, eyeglasses, prescriptions, psychiatric help, and more. This can happen both before and after you reach your deductible.

In addition to covering health costs, these tax-free accounts can lower your amount of federal income tax owed. What’s more, HSAs can help with saving for retirement and unforeseen emergencies.

How Does an HSA Work?

A Health Savings Account can work just like a checking account. You can make deposits (or contributions), pay bills online, make transfers, and even pay for qualified medical expenses with an HSA debit card. You are free to withdraw HSA funds at any time to pay for health costs not covered by your high deductible health plan. One big note: Once you enroll in Medicare, you can no longer contribute to an HSA.

Deposits can also be contributed by your employer, with direct deposits made into your HSA straight from payroll. A nice aspect of these plans: Health Savings Account contributions roll over every year, so you don’t have to race to spend the pre-tax funds in your account. If you stay healthy, you can build up your emergency fund as well as your retirement nest egg. Your good health can lead to wealth down the line!

Who Can Open an HSA?

According to Federal Guidelines, you qualify to open a Health Savings Account if you:

•   Are covered under a high deductible health plan, or HDHP.

•   Are not covered by any other health plan, including a spouse’s.

•   Are not claimed as a dependent on someone else’s tax return.

•   Are not enrolled in a disqualifying alternate medical savings account, such as an FSA (Flexible Spending Account) or an MSA (a Medicare medical savings account).

•   Are not currently enrolled in Medicare.

How to Set Up a Health Savings Account

Once you’ve established that the pros outweigh the cons, you may wonder exactly how to set up a Health Savings Account (HSA). Fortunately, the process is pretty straightforward:

Step 1: Research Your HSA Options

If an HSA plan is offered directly through your employer, go to Step Two.
If you’re self-employed, investigate HSA options online, or reach out to banks or other financial entities.

Step 2: Fill Out the Necessary Paperwork

The set-up for an HSA is not unlike opening a bank account. You’ll be provided with paperwork or an online form, where you’ll give basic information such as your Social Security Number and proof of your identity (typically verified by a government-issued photo ID).

Step 3: Complete Verification

Be prepared to offer verification of your high deductible health plan (HDHP).

That’s it! It’s a quick and simple process to set up a Health Savings Account.

Once your HSA is up and running, you may be able to opt for automatic regular deposits from your bank account or straight from your paycheck. There is no minimum amount required to open an HSA, but you typically need at least $1,000 in the account in order to invest in certain mutual funds.

HSA Contribution Limits

For tax year 2025, HSA contribution limits are $4,300 for individuals and $8,550 for families with HDHP coverage. For 2026, HSA contribution limits are $4,400 for individuals and $8,750 for families. Those 55 and older can contribute an additional $1,000 as a catch-up contribution in either tax year. There is never a minimum requirement for deposits. Some ground rules to be aware of:

•  You are covered under a high deductible health plan (HDHP), described later, on the first day of the month.

•  You have no supplemental health coverage except what is permitted under other health coverage.

•  You aren’t enrolled in Medicare.

•  You can’t be claimed as a dependent on someone else’s tax return.

Advantages of an HSA

There are many benefits to opening an HSA. Sure, it can provide a cushion or safety net when it comes to out-of-pocket medical costs. But there are other perks beyond covering the price of a new pair of glasses.

Covering Expenses for You and Your Family

From ambulances to acupuncture, a Health Savings Account can cover the costs your HDHP doesn’t. The IRS has an extensive listof ways you can use your HSA funds. One example: Did you know you can also use your Health Savings Account to pay for medical expenses for a spouse or a child — anyone who is part of your tax household — even if they aren’t on your HDHP? It’s true!

Lowering Taxable Income

Here’s another bonus to having this kind of account: Your HSA contributions are made before taxes are deducted, thereby lowering your taxable income. As a result, you may pay less in taxes.

Rollover Contributions

There’s no “use-it-or-lose it” pressure when you have a Health Savings Account. Unused HSA funds don’t disappear at the end of the year. You can roll them over again and again, accumulating tax-free interest. Those earnings can turn into savings to be invested in the future or used for life’s little surprises — say, a chipped tooth.

Saving for Retirement

At age 65, you can start using the funds in your Health Savings Account for anything, without penalty. Withdrawals will be taxed the same as they would from a 401(k) or IRA, but any funds waiting for use will avoid taxes while earning interest.

Additionally, if you are lucky enough to be able to max out your annual IRA and/or 401(k) contributions, an HSA is another way to save more tax-free money toward retirement. Beyond covering copays, an HSA is a great way to get your money working for you.

Disadvantages of an HSA

Okay, now you know the upside of opening an HSA. But there are potential downsides that are worth knowing about and considering before you sign up.

Penalties for Unqualified Expenses

Until you turn 65, HSA funds cannot be used for anything but eligible medical expenses. To do so would subject withdrawals to income taxes and a 20% penalty.

Monthly Fees

Health Saving Account providers may charge a monthly fee. These fees generally tend to be lower than $5 bucks per month, but they do add up. While there are providers out there that don’t charge account management fees, all will assess an investment fee. Do your homework to find the vehicle with the lowest fees.

Potential Losses

Like an IRA or 401(k), any invested money in an HSA can mean monetary gains and losses. As with any investment account, you need to be prepared for your HSA balance to dip if the market trends downward.

Keeping Tabs for Your Tax Records

HSA contributions and expenditures must be reported on your tax return. It may not be a deal-breaker, but for some people, keeping records of your HSA activity can be a nuisance.

Things to Consider When Choosing an HSA

If your job offers a Health Saving Plans, great! They’ve done the research for you. Employers may also offer Flexible Spending Accounts (FSAs). But unlike FSAs, which are owned by an employer and can be inflexible, a Health Savings Account has higher contribution limits and is controlled by you.

If you are self-employed, do your research. You’ll find an array of Health Savings Plans to choose among; HSA comparison websites can help you navigate the search. Remember to pay attention to any monthly/annual fees so you know exactly what to expect. Ideally, you’ll want an HSA that makes it easy to manage your account online. Many banks and credit unions offer HSAs, so check with your financial institution.

The Takeaway

Once you’ve made the decision to enroll in a Health Savings Account, the steps to set it up are relatively painless. You can start using your HSA funds right away to help cover qualified health-related costs. Contributions are made with pre-tax dollars, don’t need to be used up by the end of the year, and can potentially even help boost your retirement fund. A Health Savings Account goes beyond just covering your healthcare expenses and can serve as one of the best tax-advantaged savings vehicles available. It can enhance your sense of security and keep your wealth growing.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

How do I set up an HSA account?

With a valid government-issued photo ID, Social Security number, and proof of your HDHP, you can fill out a basic paper or online HSA form, provided by an employer or financial institution.

Can I start an HSA on my own?

Yes. As long as you are enrolled in an HDHP and not covered under someone else’s policy, you can start an HSA.

How much does it cost to open an HSA?

The initial sign-up is free, and there is no minimum deposit amount to start. But expect investment fees and possibly monthly management fees.

Photo credit: iStock/AndreyPopov

Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet

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Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning the APY for account holders with Eligible Direct Deposit, we encourage you to check your APY Details page the day after your Eligible Direct Deposit posts to your SoFi account. If your APY is not showing as the APY for account holders with Eligible Direct Deposit, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning the APY for account holders with Eligible Direct Deposit from the date you contact SoFi for the next 31 calendar days. You will also be eligible for the APY for account holders with Eligible Direct Deposit on future Eligible Direct Deposits, as long as SoFi Bank can validate them.

Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, Wise, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi Bank shall, in its sole discretion, assess each account holder's Eligible Direct Deposit activity to determine the applicability of rates and may request additional documentation for verification of eligibility.

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News anchors earn an average salary of around $106,030 a year, according to the U.S. Bureau of Labor Statistics (BLS), which includes them in the category of news analysts, reporters, and journalists.

But keep in mind that salaries vary widely and there are many factors that go into determining pay, including your experience, the market size, the location, and the size of the employer. For example, news anchors working in locations with larger audience sizes and for bigger networks or cable news will generally make higher salaries.

Let’s take a closer look.

Key Points

What Are News Anchors?

News anchors are journalists who are responsible for delivering the news to their audience. These professionals can work for a television, radio, cable, or media outlet. Some work in local markets, while others broadcast in national markets or on cable news.

News anchors spend some days in the newsroom and others covering a story out in the field. Many start their careers as reporters, covering a specific beat or coverage area, like state and local government, education, or local businesses.

As a news anchor, it’s important to stay up to date on current events and have strong interviewing, researching, and writing skills. And since you’ll likely handle breaking news from time to time, it also helps if you’re good at multitasking and staying calm under pressure.

News anchors also have a lot of interaction with other people and work with a team, including producers, reporters, audio engineers, and camera operators. If this much interaction isn’t the right fit for you, you may want to look into jobs for introverts.

Like many journalism roles, a news anchor position requires a bachelor’s degree. Internships can be a great way to gain experience in the field, establish contacts, and start building your professional network.

💡 Quick Tip: When you have questions about what you can and can’t afford, a spending tracker app can show you the answer. With no guilt trip or hourly fee.

How Much Do Starting News Anchors Make?

An entry-level news anchor makes an average of $48,077 a year, according to ZipRecruiter.

That said, there are many factors that come into play when determining salary, such as location and market size. It’s common for news anchors to start their careers as reporters in small local markets and work their way up to anchor desks in larger news markets. Bigger markets — and more viewers — typically bring higher salaries.

As you evaluate what makes a good entry-level salary, take into accounts factors like work schedule flexibility, paid time off, and benefits like health insurance and a retirement plan.

Recommended: How to Save for Retirement

What Is the Average Salary for a News Anchor?

As mentioned, the average salary for someone working in the field of news analysis, reporting, and journalism, including news anchors, is $106,030 a year, according to the BLS. If you want to break it down to how much a news anchor makes an hour, the average is roughly $51.

The top 10% of earners can bring in $162,430 or more a year, while the bottom 25% earn $40,420 or less. Many news anchors, usually those working at major news networks, can make more than $100,000 a year.

However, no matter how much you earn, it’s a good idea to set short- and long-term financial goals. A money tracker app can help you monitor your spending and saving and also provide useful insights.

What Is the Average News Anchor Salary by State?

While some news anchors take home a hefty salary, journalism roles tend not to be the highest-paying jobs in a state.

Here are the average salaries for news analysts, reporters, and journalists, a category which includes news anchors, by state, according to the U.S. Bureau of Labor Statistics.

Recommended: What Is Competitive Pay?

News Anchor Job Considerations for Pay and Benefits

Being in the news industry means covering fresh stories and meeting new people every day, but the pace can be relentless. Breaking news can happen at any time and anywhere, which can mean working beyond a typical nine-to-five schedule and having to travel unexpectedly.

News anchor compensations can also include benefits like a retirement savings plan and health insurance. Some roles may also come with added perks like car services and wardrobe stipends. Bonuses are also possible in this industry.

It’s important to note that the journalism industry can be shaky and is expected to shrink in the coming years. The BLS forecasts that employment of news analysts, reporters, and journalists will drop 4% from 2024 to 2034. That means that it expects there to be 47,400 jobs in the industry in 2034 compared to 49,300 in 2024.

💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

Pros and Cons of a News Anchor Salary

There are many factors to consider when evaluating a salary, including the local cost of living and your spending and debt levels. Advancing into bigger markets can bring a substantial pay increase for many news anchors.

The life of a news anchor can seem glamorous when you consider the wardrobe, hair and makeup, and lights and cameras. But the news cycle can be draining, and there isn’t a lot of flexibility when it comes to your schedule or remote work options.

Morning news anchors will start their days before the sun comes up, preparing for interviews, catching up on news, and reviewing their show’s rundown. If you are looking for roles with more flexibility, you may want to explore work-from-home jobs.

The Takeaway

Becoming a news anchor means taking on the responsibility of delivering news to viewers. The average salary for the news analysts, reporters, and journalists category is around $106,030 a year, per the BLS.

But that figure can vary widely depending on experience, the size of the employer, the size of the market, and other factors. Typically, news anchors start their careers in smaller, local markets. As they gain more experience, they may have opportunities to advance to larger markets, which tend to pay more.

If you’re passionate about the news and want to help keep your community informed, a career as a news anchor may be right for you.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What is the highest-paying news anchor job?

Generally speaking, news anchors can make more working in a major, national market. For instance, prime-time television news anchors who work for major media broadcasters can earn millions per year.

Do news anchors make $100k a year?

Many news anchors can earn around $100,000 annually, especially those who work at a major news network.

How much do news anchors make starting out?

According to ZipRecruiter, an entry-level news anchor earns around $48,077 per year. Location, experience, and the size of the employer can all play a role in a starting salary for a news anchor.

Photo credit: iStock/milanvirijevic

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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Self-employment tax consists of Social Security and Medicare tax, which are the same taxes that would be withheld from your pay if you worked for an employer. If you work for yourself, you’ll need to ensure you’re handling your tax filing correctly. That means paying self-employment tax, typically in four estimated quarterly installments along with any federal, state, and local income tax owed.

Here’s what you should know about self-employment tax if you’re contemplating being your own boss or are already up and running as a freelancer.

What Is Self-Employment Tax?

Self-employment tax is the income tax you pay on net earnings, as mandated by the Self-Employment Contributions Act (SECA). The IRS determines who must pay self-employment tax.

SECA taxes help to fund Social Security and Medicare benefit programs for people who are elderly, retired, or disabled, as well as their eligible dependents. That’s the same as Federal Insurance Contributions Act (FICA) taxes, which are part of your income tax withholding if you work for an employer.

Self-employment tax exists to ensure that people who work for themselves pay their share of federal income tax. It’s important to understand how much you’re making and what tax bracket you’re in, and to report your self-employment income accurately, because what you earn influences what you’ll be able to collect from Social Security when you retire.

Recommended: Credit Monitoring

How Much Is Self-Employment Tax?

The Internal Revenue Service sets the self-employment tax rate at 15.3%. There are two parts to the tax:

•   12.4% for Social Security, which is also referred to as Old-Age, Survivors, and Disability Insurance (OASDI)

•   2.9% for Medicare

The amount you pay in self-employment tax depends on how much you earn from self-employment for the year and what you deduct. It doesn’t matter what profession you are pursuing, whether you’re an actor or a nature photographer (which can be a good job for introverts).

What is the amount of the self-employment tax (SECA), and how does it compare to FICA taxes? The tax rates are the same. What’s different is how they’re paid.

•   If you’re self-employed, you’re responsible for calculating and paying all SECA taxes.

•   If you work for someone else, your employer determines how much to withhold from your checks each pay period.

Employers cover half of the tax for their employees. So, instead of paying 15.3% yourself, you’d pay 6.2% for OASDI (Social Security) taxes and 1.45% for Medicare tax, while your employer pays the rest. However, you as a self-employed individual may deduct the other half of this payment (the portion an employer would pay) on your tax return when calculating your adjusted gross income.

Recommended: How Much Do You Have to Make to File Taxes?

Who Has to Pay Self-Employment Tax?

The IRS requires you to pay self-employment tax if either of the following is true:

•   Your net earnings from self-employment are $400 or more

•   You had church employee income of $108.28 or more

Those rules apply to sole proprietors, independent contractors, partners, and single-member limited liability corporations (LLCs).

Net earnings are the part of your gross income you keep after subtracting “ordinary and necessary” trade or business expenses. If you’re self-employed as a sole proprietor or independent contractor, you use Schedule C to calculate your net earnings from self-employment. Self-employment tax is reported on Schedule SE of your Form 1040.

There’s no age exemption for self-employment tax. If you owe it, you’ll need to pay it even if you already receive Social Security benefits.

Self-Employment Tax Rate for 2025 and 2026

If you’re preparing for tax season, it helps to know if there are any updates to tax rates. The self-employment tax rate for the 2025 tax year is 15.3%; it’s the same for 2026. So for returns you file in 2026 and 2027, you’ll calculate self-employment tax as 15.3% of net earnings.

What’s different for each tax year is the amount of your net earnings that are subject to Social Security tax. This is called the wage base limit.

•   For 2025, the wage base limit for the Social Security portion of self-employment tax is $176,100.

•   For 2026, the wage base limit increases to $184,500.

How much is self-employment tax, in terms of your total income? According to the IRS, the amount of net earnings subject to self-employment tax is 92.35%. All your net earnings are subject to the Medicare tax.

Certain self-employed individuals are subject to an additional Medicare tax of 0.9%. This tax applies if your income is above a certain threshold for your filing status. Here are the current thresholds for both 2025 and 2026:

Recommended: What Are the Different Types of Taxes?

How to Calculate Self-Employment Tax

A self-employment tax calculator (options are available online) can help you estimate what you’ll owe, and using an online budget planner can help you monitor your money year-round.

That said, you don’t always have to rely on tech. It’s possible to do the calculations yourself. Here’s how to calculate self-employment tax in a few simple steps.

1.    Calculate your net earnings from self-employment, which again is the difference between your gross income and deductible expenses.

2.    Multiply your net earnings by 92.35%.

3.    If the amount is less than $176,100 (in 2025) or $184,500 (in 2026), multiply it by 12.4% to calculate your Social Security tax. Otherwise, multiply $176,100 (in 2025) or $184,500 (in 2026) by 12.4%.

4.    Multiply the amount you got in step two by 2.9% to calculate your Medicare tax.

You should now have two amounts. The final step is to add them together.

Example Self-Employment Tax Calculation

If you’re new to self-employment tax (and possibly paying taxes for the first time as well), it can help to have an example to follow of how to calculate what you owe.

Say you start an e-commerce store. You bring in $110,000 in gross income and have $10,000 in home office expenses, leaving you with $100,000 in net earnings. Now you can do the math.

•   $100,000 x 92.35% = $92,350

•   $92,350 x 12.4% = $11,451.40

•   $100,000 x 2.9% = $2,678.15

•   $11,451.40 + $2,678.15 = $14,129.55 in self-employment tax

You can deduct one-half of what you pay in self-employment tax. Deductions reduce your taxable income for the year, which can help you to owe less or get a bigger refund.

How to Pay Self-Employment Tax

Self-employment tax is typically paid in four installments, called quarterly estimated payments. These payments reflect the amount you estimate you’ll owe in taxes based on your expected net earnings.

Quarterly payments are typically due:

•   April 15 for income earned from January 1 to March 31

•   June 15 for income earned from April 1 to May 31

•   September 15 for income earned from June 1 to August 31

•   January 15 of the following year for income earned from September 1 to December 31

Making quarterly payments doesn’t mean you don’t have to file a federal income tax return. You don’t want to miss your tax filing deadlines for those quarterly payments, but you’ll still need to hit the annual tax filing deadline, which is usually April 15.

If you’ve underpaid your estimated taxes, you may owe when you file. The IRS could also impose an underpayment penalty if you owe more than $1,000. Underpayments and missed payments are two of the biggest tax filing mistakes to avoid when you’re self-employed.

Tax Deductions for Self-Employment

Claiming tax deductions can shrink your taxable income. Some deductions are designed for people who are self-employed or run businesses, while other deductions are available to anyone who qualifies.

Examples of self-employed deductions include:

•   Half of the self-employment tax you paid, as noted above

•   Contributions to a self-employed retirement plan, such as a solo 401(k) or SEP IRA

•   Contributions to a traditional IRA

•   Health Savings Account (HSA) contributions (if you have a high deductible health plan)

•   Health insurance premiums

•   Home office expenses (an online money tracker can help you keep tabs on these)

•   Mileage and travel expenses, if that applies to the type of business you run

You may also be able to claim other deductions as well, based on how you file. For example, a sole proprietor can write off mortgage interest, student loan interest, and charitable contributions alongside business expenses.

Worth noting: If you’re filing taxes on investment income, you can also deduct expenses related to maintaining the property.

“It’s a good idea to check your pay stubs periodically to ensure that the deductions being taken out are accurate and align with your financial goals,” says Brian Walsh, CFP® and Head of Advice & Planning at SoFi. “To make sure the appropriate amount of taxes are being withheld from each paycheck, you may also want to revisit your W-4 annually and make any adjustments as your circumstances change.”

The Takeaway

Self-employment tax refers to the Social Security and Medicare taxes that earners who are not employees must pay. Typically, employers pay half this amount, but the self-employed must pay the full 15.3% amount and can then deduct half when doing their taxes. Understanding how and when self-employment taxes are due can play an important role in tracking and managing your money well.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

Why do I have to pay self-employment tax?

You have to pay self-employment tax because that is the law. Paying self-employment tax isn’t that different from the tax withholding your employer would take from your check if you had a regular 9 to 5 job.

What is 30% tax for self-employed?

The 30% rule of thumb for self-employed taxpayers suggests holding back 30% of your gross income to cover your tax obligations. The idea is that by setting aside this much, you should be able to comfortably cover your self-employment tax obligations.

What is the 20% self-employment deduction?

Some self-employed individuals may be able to take advantage of the Qualified Business Income (QBI) deduction. This deduction allows you to write off up to 20% of your QBI, plus 20% of any qualified real estate investment trust (REIT) dividends you receive. This deduction is only available, however, to businesses in certain trades and industries.

How do I get the biggest tax refund when self-employed?

Getting a tax refund means that you’ve paid in more tax than you owe. The simplest way to increase your refund size is to maximize your deductions. Maxing out a tax-advantaged retirement plan, itemizing every eligible business expense, and deducting other expenses, like charitable contributions or mortgage interest, could help you snag a bigger refund.

How much can an LLC write off?

Technically, there’s no limit on the dollar amount an LLC, or limited liability company, can write off. However, each expense you deduct must be legitimate and reflect the amount you actually spent. It’s wise to keep a paper or digital trail to document your deductible business expenses, just in case the IRS comes knocking with an audit.

What happens if my LLC makes no money?

If your only source of income is an LLC and you make no money, then you wouldn’t owe any taxes since there are no net earnings to report. You would, however, still need to file your return and document any net operating losses. A net operating loss happens when your business spends more than it brings in.

About the author

Rebecca Lake

Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.

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As long as people rely on indoor plumbing, we will need experienced, skilled plumbers to install, repair, and maintain the systems we use every day. Being a plumber is not only an in-demand job but one that generally pays well. A plumber’s average annual salary in the U.S. is $69,940, according to the Bureau of Labor Statistics (BLS).

A plumber’s expertise spans from diagnosing and repairing leaks in people’s homes to planning commercial piping and municipal sewer systems.

If you enjoy working with both your hands and machinery, have strong attention to detail, and are a good problem-solver, being a plumber might be the right job for you. Read on to learn more about how much plumbers make per hour, how salaries vary by region, and other factors to consider before you decide to pursue a career in plumbing.

What Are Plumbers?

Plumbers are skilled professionals who install, maintain, and repair plumbing systems that supply residential and commercial properties with water and gas and carry away waste. Plumbers play a crucial role in ensuring these systems function properly and efficiently. Their expertise applies both to municipal sewers and single-home septic systems.

Plumbers diagnose and fix various issues related to plumbing systems, such as leaks, clogs, and malfunctions in pipes or fixtures. They also perform routine maintenance to prevent problems and keep plumbing systems in good working order.

In some cases, plumbers are involved in the initial design and planning stages of construction or renovation projects, ensuring that plumbing systems are installed efficiently and meet local building codes and regulations. Some plumbers may specialize in specific areas, such as commercial plumbing, industrial plumbing, or specific types of systems like hydronic heating.

How Much Does a Plumber Make Per Year Starting Out?

A plumber can make a good entry-level salary that continues to increase over time. For example, plumbers with less than one year of experience earn, on average, $47,096, while the average salary for a plumber with more than 10 years of experience is $68,325 per year, per Indeed.

What Is the Average Salary for a Plumber?

Plumbers can earn either an hourly rate or an annual salary, depending on the type of work they do. How much a plumber makes per hour can range anywhere from around $19 to $55. The average hourly pay for a licensed plumber in the U.S. is $33.63 an hour, per the BLS. As mentioned, the current national average for how much a plumber makes a year is $69,940.

How much money a plumber makes can vary by location. What follows is a breakdown of how much plumbers make a year (on average) by state.

Recommended: 15 Entry-Level Jobs for Antisocial People

Plumber Job Considerations for Pay & Benefits

Plumbing has become a popular trade because of the various perks and financial advantages that come along with the job. First, the average starting salary of $47,096 is higher than in many industries. Plus, some plumbers are union members, which means that their salaries are protected by a contract and they may receive attractive health insurance and retirement packages.

Learning to be a plumber is also less demanding than obtaining a four-year bachelor’s degree. You can study to be a plumber by attending trade school or technical college. Usually, it takes anywhere between four and 24 months to complete your schooling.

Furthermore, plumbers-in-training typically can become apprentices while they’re completing their education. Apprenticeships let you work and learn simultaneously, meaning you’ll earn competitive pay while you work toward certification. For these reasons, plumbers can often finish their education with little to no student loans.

Plumbing is also a steady profession that will likely always be in demand. Even during economic downturns, residential and commercial buildings won’t stop needing running water and working toilets.

Lastly, plumbers can advance through the ranks to increase their pay and move into new roles. For example, attaining journeyman status often leads to a significant bump in salary. On average, journeyman plumbers earn $69,723, per ZipRecruiter — a $22,627 increase over the average starting salary.

Likewise, you could become a plumbing engineer or a superintendent to manage municipal jobs. Many plumbers also start their own businesses, which could lead to a job that pays $100,000 or more.

Regardless of how much you make as a plumber, a money tracker app can help you keep tabs of where your income is going.

Pros and Cons of a Plumber Salary

As with any profession, there are both advantages and disadvantages to being a plumber. Carefully considering each can assist you in determining if this is the right career for you.

Pros of Being a Plumber

Becoming a plumber can offer several attractive advantages:

•   Job security Plumbing is an essential service that is always in demand. Even during an economic recession, people will always need plumbing services.

•   Good pay Plumbers are well compensated for their expertise from the get-go. With experience and expertise, plumbers can earn a substantial income. Plus, less need for student loans means debt likely won’t erode your earnings.

•   Daily exercise Plumbing work often involves physical tasks such as lifting, bending, and carrying equipment. This aspect of the job provides plumbers with regular physical activity, contributing to a healthier lifestyle.

•   Promotion and business ownership opportunities As a plumber gains experience and expertise, they can ascend the ranks (such as moving from journeyman to master plumber) to increase their pay and access new projects. Additionally, some plumbers choose to start their own businesses, which can be highly profitable and offer independence.

•   Variety during work Plumbers typically encounter a wide range of challenges and tasks on the job. For example, you might replace piping one day and fix a host of leaky faucets the next. This variety can keep the work exciting and engaging.

Recommended: 30 Low-Stress Jobs for Introverts Without a Degree

Cons of Being a Plumber

However, plumbers also face the following challenges:

•   Physically taxing. Plumbing work often requires physical strength and endurance. Plumbers may need to lift heavy equipment, crawl into tight spaces, and crouch for hours on end. These repeated tasks can lead to strain or fatigue.

•   Lack of routine. Plumbing work can be less predictable than some office jobs that follow a set schedule. The unpredictability can be stressful for those who want the same pattern in their work every day or week.

•   Working at all hours. Plumbing issues can arise at any time, including nights, weekends, and holidays. Plumbers may need to be on-call or work during off-hours to address urgent situations. These situations impact work-life balance and require a degree of flexibility in one’s schedule.

•   Risk of injury. Working with plumbing systems and tools can pose certain risks. Plumbers may be exposed to sharp objects, hot surfaces, chemicals, and falling pipes. Additionally, working in confined spaces or at heights can increase the risk of accidents or injuries.

•   High-pressure environment. Addressing leaking sewage and malfunctioning water systems can be stressful and clients may be stressed and difficult to work with. Furthermore, plumbers must navigate unpredictable environments and situations, necessitating the ability to remain composed even in hazardous conditions.

Recommended: 11 Work-From-Home Jobs Great for Retirees

The Takeaway

Plumbers make a desirable starting salary with plenty of room to advance their careers. They can enjoy the satisfaction of helping others with an essential aspect of life and rest in the fact that the profession isn’t going anywhere.

However, plumbing can impose physical wear and tear, cause injuries, and require work in extreme conditions. The tradeoff for low or no student debt and consistent, lucrative work is the tough physical labor and the possibility of working late hours.

Even after weighing the potential cons, however, you may decide that a trade profession such as plumbing can help you further your professional and financial goals.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What is the highest paying plumber job?

The highest paying plumber job is a plumbing engineer, which requires engineering knowledge and project management skills. This position can pay as much as $129,500 annually, according to ZipRecruiter.

Do plumbers make 100K a year?

Plumbers at the highest levels of the profession can make $100,000 per year. Specifically, plumbing engineers (who design plumbing systems for private, public, or commercial buildings) and plumbers who own their own companies can potentially earn six figures a year.

How much do plumbers make starting out?

Plumbers with less than one year of experience earn, on average, $47,096 per year.

About the author

Ashley Kilroy

Ashley Kilroy is a seasoned personal finance writer with 15 years of experience simplifying complex concepts for individuals seeking financial security. Her expertise has shined through in well-known publications like Rolling Stone, Forbes, SmartAsset, and Money Talks News. Read full bio.

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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The average annual salary for a personal trainer is $51,360 a year, according to the latest data from the U.S. Bureau of Labor Statistics (BLS), which groups them with exercise trainers and group fitness instructors. However, salaries typically fall somewhere between $27,580 (10th percentile) and $82,050 (90th percentile).

How much you can make as a personal trainer depends on several factors, including where you live, who you work for, your training experience, and your areas of expertise. Let’s unpack this.

What Are Personal Trainers?

A personal trainer develops customized exercise programs for clients based on individual skill levels, health goals, physical limitations, and other considerations. These professionals work with clients of all ages and skill levels to improve their strength, flexibility, and endurance; complete workouts safely and without injury; support them on their weight loss journey; and more.

Trainers are often paid hourly, but they may earn a yearly salary if they work for a gym or high-end client. How much money a personal trainer makes depends on the range of services and level of attention they provide — in general, the more, the better.

In addition to exercise and training skills, it also helps if you have good people skills, as you’ll be working closely with clients. (Not much of a people person? You may want to look into jobs for introverts instead.)

💡 Quick Tip: When you have questions about what you can and can’t afford, a spending tracker app can show you the answer. With no guilt trip or hourly fee.


💡 Quick Tip: When you have questions about what you can and can’t afford, a spending tracker app can show you the answer. With no guilt trip or hourly fee.

How Much Do Starting Personal Trainers Make an Hour?

The average entry-level wage for a personal trainer in the United States is approximately $21 per hour, or $43,677 a year, according to the International Personal Trainer Academy. But depending on a host of factors, personal trainers with more experience can earn anywhere from $13.26 to $39.45 or more an hour, according to the BLS.

So is it possible to make $100,000 a year or more as a personal trainer? Short answer: yes. A six-figure income may be attainable once you gain enough experience and establish a steady client base. But keep in mind that those things often take time to develop.

Recommended: What Is Competitive Pay?

What Is a Personal Trainer’s Yearly Salary by State?

Location can play a major factor in a personal trainer’s income. A professional who’s established in their career may earn an average of $51,380, but as the chart below shows, take-home pay can vary significantly from state to state.

Recommended: The Highest-Paying Jobs in Every State

Personal Trainer Job Considerations for Pay and Benefits

When you’re just starting out as a personal trainer, there are many factors that may influence the direction of your career. For instance, working at an established commercial gym can offer an opportunity to gain experience, build up a client network, and receive job benefits.

If you’re a self-starter and prefer more independence, working as a self-employed personal trainer might be the better fit. You’ll have the ability to set your own hours and hourly rate. However, you’ll also have to pay for health benefits and set money aside for retirement.

Here are some questions to ask yourself when starting a career as a personal trainer:

•   How many hours are you willing to work?

•   Would you rather work for someone else or be your own boss?

•   Do you need health insurance benefits?

•   Where do you see yourself in five to 10 years?

•   What type of clients do you want (for example, senior citizens, athletes, or some other group)?

•   Are you willing to commute or relocate?

•   What additional certifications might you need?

•   What are your financial goals?

Establish what you need to earn as a personal trainer in order to cover your expenses and maintain the lifestyle you want. It can help to sit down and create a budget.

As your personal trainer career gets going, you can lean on financial tools like a money tracker app to help you monitor your spending and saving.

Tips to Increase a Personal Trainer’s Salary

Clients can come and go for a number of reasons, but there are some things you can do as a personal trainer to keep the ones you have and attract new ones. Here are some strategies to consider:

•   Listen to your clients, and be willing to adapt to their needs.

•   Sharpen your motivational skills. Learn from other successful trainers and how they inspire their clients.

•   Be empathetic. Many clients may struggle during their workouts, both physically and psychologically.

Empathy can go a long way toward maintaining healthy client relations.

•   Go where you’re needed. Investigate niches where your expertise can be of use, be it an elderly care center, a health center, or a new neighborhood gym.

•   Network and market yourself. Chat up members at your gym and discuss their fitness goals.

You can also promote your own fitness journey and methods on social media.

•   Earn new certifications. Get certified in CPR, yoga, Pilates, and nutrition, for example.

The more you know, the more in-demand you may be.

Pros and Cons of Being a Personal Trainer

As with any job, there are pluses and minuses to working as a personal trainer. Here are some of the benefits and challenges of the field:

Pros:

•   Flexible hours. You can often schedule clients when you want to.

•   Professional control. You’re able to build up your business through marketing and networking, adding clients as you raise your earning goals.

•   Staying physically fit. You’ll be able to practice what you preach. Staying in shape is a job requirement.

•   Personal satisfaction, especially when you help a client meet their goals.

Cons:

•   Fluctuating income/job security. There’s no way to predict how many clients you may have month-to-month or year-to-year.

•   Lack of benefits. Many personal trainers work for themselves and have to pay for their own health and dental insurance, plus save for retirement.

•   Nontraditional work hours. Although you have the ability to make your own schedule, most of your working clients will likely request early morning, evening, or weekend sessions.

•   Shorter career lifespan. Even the most in-shape trainer ages, and there may come a day where you struggle physically to keep up with your clients.


💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

The Takeaway

A personal trainer’s earnings can rise and fall with the ebb and flow of clients, but there is also no limit to the amount of money you can make. Whether you’re working with a few dedicated clients or creating your own global fitness brand, being a personal trainer can be a great way to earn a salary while keeping yourself and your finances in shape.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What is the highest-paying personal trainer job?

Personal trainers who work for wealthy clients and celebrities typically command lucrative salaries. The most popular fitness influencers on TikTok and Instagram, for example, may be able to make more than $1 million a year.

Do personal trainers make $100k a year?

A well-established personal trainer may be able to make $100,000 a year with experience, marketing savvy, good time management skills, and a loyal client base.

How much do personal trainers make starting out?

The average starting wage for a personal trainer in the United States is $21 per hour, or $43,677 a year.

Photo credit: iStock/Drazen Zigic

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

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This content is provided for informational and educational purposes only and should not be construed as financial advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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