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Car sales professionals make an average of $103,042 a year, according to Salary.com. While that’s more than what the average American worker earns annually, the job often requires long hours and your income may depend on how many cars you sell.

Let’s dive into what car salesmen do and how much they can make.

What Are Car Salesmen?

Car salespeople help customers shop for cars. Typical duties include answering questions about the cars on the lot, arranging test drives, and explaining financing options, warranties, and specifications.

Being able to build relationships with customers and close deals can help you succeed as a car salesman. Since car salespeople work directly with customers, the job may not be the best fit for introverts.


💡 Quick Tip: Online tools make tracking your spending a breeze: You can easily set up budgets, then get instant updates on your progress, spot upcoming bills, analyze your spending habits, and more.

How Much Do Starting Car Salesmen Make a Year?

The average salary for entry-level car sales positions in the United States is $38,680 per year, according to ZipRecruiter data. The pay for entry-level jobs in car sales will likely differ based on the dealership’s size, location, and car brand.

While some employers pay a base wage, others offer commission-based pay. Base wages tend to provide a more consistent monthly income, usually between $2,000 and $4,000. With commission-based compensation, you may earn a portion of each sale, typically between 20% and 30%.

What Is the Average Salary for a Car Salesman?

If you’re looking to enter the field, you may wonder, how much does a car salesman make a year?

As mentioned above, the average annual salary for a car salesman is a competitive $103,042, per Salary.com, though pay can range between $88,987 and $119,501. High-achieving salespeople may make more than six figures, particularly if they are employed by luxury car dealerships or in regions with wealthy buyer demographics.

Commission-based arrangements are also a major factor in determining overall income.

Recommended: What Trade Makes the Most Money?

What Is the Average Car Salesman Salary by State for 2024?

A car salesman may not be the highest-paying job in most states, but it can provide a good living. This is especially true if you happen to work in a state like California, New Jersey, or Alaska, where the position tends to pay more. Let’s see how salaries in 2024 vary by state.

State	Salary
Alabama	$94,664
Alaska	$112,418
Arizona	$100,919
Arkansas	$93,902
California	$113,665
Colorado	$104,103
Connecticut	$111,058
Delaware	$105,257
Florida	$97,889
Georgia	$99,984
Hawaii	$108,111
Idaho	$95,670
Illinois	$105,875
Indiana	$100,486
Iowa	$98,611
Kansas	$98,116
Kentucky	$96,962
Louisiana	$97,972
Maine	$99,332
Maryland	$106,242
Massachusetts	$112,140
Michigan	$102,195
Minnesota	$105,597
Mississippi	$91,892
Missouri	$98,183
Montana	$94,200
Nebraska	$96,684
Nevada	$104,154
New Hampshire	$104,402
New Jersey	$113,438
New Mexico	$95,046
New York	$109,956
North Carolina	$98,920
North Dakota	$98,941
Ohio	$101,060
Oklahoma	$95,273
Oregon	$103,598
Pennsylvania	$102,835
Rhode Island	$107,988
South Carolina	$97,283
South Dakota	$90,800
Tennessee	$94,726
Texas	$101,290
Utah	$97,499
Vermont	$99,229
Virginia	$102,423
Washington	$110,553
West Virginia	$92,787
Wisconsin	$101,496
Wyoming	$94,778

Source: Salary.com

Car Salesman Job Considerations for Pay and Benefits

Flexible schedules and possible commissions and bonuses are some attractive parts of being a car salesman. Plus, dealerships might provide extra incentives, such bonuses for hitting or exceeding sales goals, corporate cars, and expense reimbursements. Retirement plans, health insurance, and employee car discounts may also be included in the benefits package.

Recommended: Work-From-Home Jobs for Retirees

Pros and Cons of a Car Salesman Salary

As with any profession, there are advantages and disadvantages of working as a car salesman.

Pros:

•   Performance-driven earnings. Commission-based pay can boost your income, especially during strong sales periods.

•   Flexibility. Compared to standard 9–5 jobs, the position may offer flexibility in terms of work hours.

•   Career advancement. A successful car sales career can lead to managerial roles and a path for professional advancement within the dealership.

•   Diverse work environment. Helping customers find a car that fits their needs and budget can be professionally satisfying.

•   Incentives and perks. Dealerships often provide extra bonuses and perks, such car discounts for staff members or opportunities for career advancement.

Cons:

•   Income volatility. If you earn a commission, your earnings could decrease during slow times.

•   Pressure to perform. Reaching sales goals is essential, and the stress of closing deals might lower your level of job satisfaction.

•   Long hours. In order to accommodate consumers, you’ll likely need to work weekends and evenings.

•   Customer relations. Resolving complaints and interacting with a variety of client personalities can be difficult.


💡 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

How much does a car salesman make? These professionals have the potential to earn $100,000 or more a year, especially if they can earn a commission based on their sales. They also have the chance to advance their careers and gain a variety of work experiences. That said, the job often requires long hours, income may not be steady, and there’s often a pressure to hit sales goals.

Whatever type of job you pursue, you’ll want to make sure your earnings can cover your everyday living expenses. Establishing a budget — and using online tools to help monitor spending — can help you make progress toward your 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.

With SoFi, you can keep tabs on how your money comes and goes.

FAQ

Can you make $100k a year as a car salesman?

Yes, it is possible to make $100,000 or more as a car salesman. Your salary may depend on your location, base pay, the car brand being sold and how many cars you sell each month.

Do people like being a car salesman?

Some people love being a car salesman, but the job is not a good fit for everyone. Those who enjoy making sales and building customer relationships may enjoy a career as a car salesman.

Is it hard to get hired as a car salesman?

The difficulty of getting hired as a car salesman depends on factors such as the dealership, car brand, location, and your experience. If you’re a people person, willing to put in time, and eager to make sales, you can likely find a position at a dealership.

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*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.

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.

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Business bank accounts can help owners keep professional transactions separate from personal banking and aid in their business cash management. These accounts often come with special conditions and requirements, and they may have various fees.

Here, we’ll take a closer look at these accounts, their pros and cons, and what it takes to open one. Read on to dive into the details about business bank accounts.

What Is a Business Bank Account?

There are three main types of business banking accounts: checking accounts for everyday use, savings accounts for intermediate and long-term savings, and merchant accounts for accepting debit and credit card payments. In this article, you’ll learn about business checking and savings accounts, available from both online and brick-and-mortar banks.

What Is a Business Checking Account?

A business checking account works much the same way a personal checking account does. You use it to deposit payments and make withdrawals, usually an unlimited amount. Like personal checking accounts, business checking accounts typically pay low to no interest on your balance.

What Is a Business Savings Account?

A business savings account will pay more interest than a checking account, so it can be a good place to park cash on an interim basis. You will likely be limited on how many transactions you can make per month without a penalty (typically six), and there may be a monthly minimum balance to maintain. Many business owners find using both a business checking and savings account can meet their banking needs.

How Long Does Opening a Business Bank Account Take?

If you open up a bank account — whether it’s checking, savings, or both — the time commitment needed is usually similar to that of opening a personal checking and savings account. It will likely take just a matter of minutes if you have the necessary information on hand.

•   You will need to provide some details about yourself, your business, and any additional business owners involved in your enterprise.

•   You’ll deposit funds.

•  Keep in mind it can take up to seven business days for final approval before you can actually access funds.


💡 Quick Tip: Banish bank fees. Open a new bank account with SoFi and you’ll pay no overdraft, minimum balance, or any monthly fees.

What Is Needed to Open a Business Bank Account?

Whether you open your bank account online or in person, you’ll need documentation of several personal and business details. Different banks may have their own verification requirements, depending on the type of business you own and the type of account you’re looking to open.

Here is a general list of what you might need to open a bank account for your business:

•   Your name, birthdate, and Social Security number

•   Mailing address and all contact information

•   What percentage you own of the business (anyone who owns 25% of the business or more will likely have to disclose personal details and identification)

•   A government-issued photo ID, such as driver’s license or passport

•   Business name and DBA (“doing business as” name) or trade name, if applicable

•   Business address and employer identification number (EIN) (Note: sometimes Social Security numbers suffice)

•   Industry/type of business

Depending on the type of business you own, you may be asked for the following documents:

•   Sole proprietorships may need the business name registration certificate and the business license.

•   Partnerships may need the partnership agreement, business name registration certificate, business license, and the state certificate of partnership.

•   Limited Liability Companies (LLCs) may need the articles of organization, LLC operating agreement, and business license.

•   Corporations may need articles of incorporation, corporate bylaws, and business licenses.

Recommended: Business Cash Management: Tips for Managing Cash

What to Look for in a Business Banking Account

Traditional banks, online banks, and credit unions all offer business bank accounts. All have different fee structures and provide different services. There are many fees and restrictions to consider when choosing a business banking account. But consider this overarching factor: online accounts are usually best for businesses that don’t need to make bank deposits.

Here’s what to compare when you’re looking for an account:

•   Monthly fees, such as account maintenance

•   Any minimum balance requirements

•   No-fee transactions

•   ATM access (for deposits and withdrawals)

•   Transfer, wiring, and payment capabilities

•   Incidental fees (such as, stop payment, overdraft, and nonsufficient funds)

•   Online and mobile banking tools

•   Additional features, such as invoicing, bill pay, or integrations with other business tools (especially tax reporting software)

Benefits of Opening a Business Banking Account

A business account can be a smart tool for a variety of reasons. Business owners may need to keep their personal and business accounts separate for tax and liability reasons. A business bank account also helps you establish a banking relationship that you can draw on in the future for lending or other services that may help your business grow. You will also establish a financial record that can come in handy when it comes time to file taxes and help your concern establish a good credit rating.

Recommended: How to Open a Business Checking Account

Cons of Opening a Business Banking Account

There are very few cases when a business banking account is a bad idea. Some very small sole proprietors may find they don’t need the extra fees and bookkeeping involved. But for most business owners, a separate account can be an efficient tool.

That said, one of the potential drawbacks of a business account is the cost of bank fees. High fees that you may not have anticipated can eat into your business profits. Some fees to look out for include:

•   Monthly fees

•   Transaction fees

•   Monthly balance transfer fees

•   Cash deposit fees

•   ATM fees

•   Wire transfer fees.

These fees add up fast. Be sure to check thoroughly what fees are involved and compare from one financial institution to another.

Pros of a Business Bank Account	Cons of a Business Bank Account
Keeps professional finances separate from personal	May involve additional fees
Establishes a business relationship with a financial institution	May involve more bookkeeping
Creates a financial record that can be useful for tax or credit-rating purposes

Choosing a Business Bank Account

Now that you’ve looked at fees, here are some other considerations as you choose your business bank account:

•   Banking online: Business bank accounts with online-only banks can be great for virtual businesses or any business that is not handling daily cash transactions. Many online banks do not require a monthly minimum balance.

•   Network: If you’re banking in person, be sure there is a conveniently located branch near your business. Also, find out how many no-fee ATMs are available in your area.

•   Electronic services: Check if online bill pay, electronic fund transfers, and other electronic services that can support your business are available for low or no fees.

•   Electronic payments: Does your bank accept Zelle and Venmo? If so, are there additional fees involved? How long will it take for transactions to post? Electronic payments are increasingly becoming the lifeblood of many businesses.

•   Software compatibility: Is the bank account you’re considering compatible with the bookkeeping software you use? That can make life easier when you need to track or get access to cash flow, outstanding receivables, and other items each month.

Other support: Does the bank offer small business loans, lines of credit, business credit cards, and other financial support for entrepreneurs that you may need in the future?

The Takeaway

While we’re on the topic of bank accounts, have you reviewed your personal accounts lately?

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with 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.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall. Enjoy up to 4.60% APY on SoFi Checking and Savings.

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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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.

Our account fee policy is subject to change at any time.

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To make homeownership more affordable, the federal government offers programs for first-time homebuyers and buyers with low to moderate incomes. The mortgage credit certificate (MCC) program is one option that helps eligible first-time homebuyers save money on their mortgage.

This guide will unpack how a mortgage credit certificate works, the pros and cons, and claiming it on your taxes.

What Is an MCC?

A mortgage credit certificate, sometimes called a mortgage certificate credit, is designed to help homebuyers recoup a portion of the interest paid on their home mortgage loan. An MCC is a dollar-for-dollar federal tax credit of up to $2,000 on the mortgage interest paid annually. It’s a nonrefundable credit, which just means that the amount of your credit can’t exceed the amount of income tax owed for that filing year.

If you take out a mortgage to buy a home, your monthly payment has four components: principal, interest, taxes, and insurance. State and local housing finance agencies issue MCCs, and if you receive one you can claim the dollar equivalent as a tax deduction to reduce the amount you owe in federal taxes. (Not all states offer MCCs, however. Michigan offers one, for example, while Massachusetts does not.) Eligible homeowners can take advantage of an MCC even if they take the standard deduction rather than itemize deductions. If you are one of the few homeowners who itemizes, any remaining mortgage interest not accounted for in an MCC may qualify for the mortgage interest deduction.

Eligibility for this program is based on income and is generally only available for first-time homebuyers who qualify, though others may be able to buy a home in a “targeted area” designated by the state or Department of Housing and Urban Development and claim a mortgage tax credit.

Keep in mind that different mortgage types may have fixed or variable interest rates. Most fixed-rate loans are eligible for an MCC.

Recommended: First-Time Homebuyer Guide

How Does It Work?

Getting a handle on tax credits and deductions can be confusing as a new homeowner, and that’s OK.

To reiterate, an MCC lets you claim a tax credit for a portion of the mortgage interest paid in a year. This lowers your tax liability, which is the amount you owe to the federal government.

The portion of the mortgage interest you can claim with an MCC, known as the tax credit percentage, depends on the state you live in. Generally, the tax credit percentage ranges from 10% to 50% of a homeowner’s total annual mortgage interest.

The tax credit percentage, the mortgage amount, and interest rate are needed to calculate the total MCC. Note, however, that an annual MCC deduction is capped at $2,000 and can’t exceed a recipient’s total federal income tax liability after factoring in other deductions and credits.

It’s helpful to show how claiming an MCC works in practice. You’ll need to know some mortgage basics, like the interest rate, before getting started.

For instance, a homeowner with a $250,000 mortgage, 3.5% interest rate, and tax credit percentage of 20% could receive a first-year MCC tax credit of $1,750.

Here’s how to break this calculation down by steps:

1.    Determine the mortgage loan balance ($250,000), interest rate (3.5%), and tax credit percentage (20%)

2.    Multiply the loan balance and interest rate to calculate the total interest paid ($250,000 x 0.035 = $8,750)

3.    Multiply the total interest paid by the tax credit percentage to calculate the MCC tax credit ($8,750 x 0.2 = $1,750)

The $1,750 would be applied to your total federal tax bill, rather than deducted from your income. Let’s take a closer look at how claiming an MCC in this example would affect your federal income taxes.

	With an MCC	Without an MCC
Income	$70,000	$70,000
Mortgage Interest Paid	$7,000 (total mortgage interest – MCC tax credit)	$8,750
Taxable Income	$63,000	$61,250
Federal Taxes Owed (22% tax rate)	$13,860	$13,475
MCC Tax Credit	$1,750	0
Total Federal Tax Bill	$12,110	$13,475

In this example, a mortgage credit certificate could lower the amount owed in federal income taxes by $1,365. If you don’t have a mortgage yet, use this mortgage calculator to estimate your interest rate, loan amount, and, on the amortization chart, interest paid.

Mortgage Credit Certificate Pros and Cons

The mortgage credit certificate program was established by the Deficit Reduction Act of 1984 to make homeownership more affordable for low- and moderate-income first-time homebuyers. While an MCC tax credit can provide financial benefits, there are some potential drawbacks to consider, too.

Here’s a side-by-side comparison of MCC pros and cons to help you figure out if an MCC is right for you if you’re a first-time buyer.

Pros	Cons
You can receive up to $2,000 in savings on taxes owed every year you’re paying mortgage interest, and carry over unused portions to following years.	A portion of MCC benefits may be subject to a recapture tax if you move before nine years, have a significant increase in income, or experience a gain from the home sale.
MCCs can reduce the cost of interest and decrease your debt-to-income ratio to help with mortgage preapproval and qualification.	If you have limited tax liability, a MCC tax credit may not pose much benefit since it’s nonrefundable.
MCCs are eligible with most fixed-rate mortgage options, including FHA, VA, USDA, and conventional loans.	Obtaining a MCC may come with processing fees, depending on the lender.
First-time homebuyer requirement is more flexible than other programs and can be waived for active military and veterans or if purchasing a home in targeted areas designated by federal and state government.	The mortgage tax credit cannot be applied to a secondary residence and might not be reissued when refinancing.

How to Get a Mortgage Credit Certificate

Borrowers are issued an MCC through their lender before closing. Thus, it’s important to discuss options early in the process and when shopping for a mortgage.

Eligibility for an MCC varies by location. State housing finance agencies (HFAs) have established requirements for obtaining an MCC, if one is offered. These include limits on household income, loan amount, and home purchase price.

Other criteria to get an MCC include the following:

•   HFA-approved lender: The HFA may require borrowing from an approved list of lenders.

•   First-time homebuyer status: Borrowers must not have owned a principal resident in the past three years.

•   Primary residence: Only owner-occupied homes are eligible for an MCC.

•   Homebuyer education: HFAs may require borrowers to participate in education courses during the purchase process.

Claiming a Mortgage Credit Certificate on Your Taxes

To claim the MCC each year on your taxes, fill out IRS Form 8396. You’ll need to know the amount of interest you paid on the mortgage that year and the tax credit percentage set for the MCC.

Once complete, you’ll also know if any credit can be carried over for the following tax year.

The Takeaway

What is a MCC? A mortgage credit certificate is a federal income tax credit on a portion of the mortgage interest paid annually for low- to moderate-income first-time homebuyers or people purchasing a home in a targeted area.

The home buying process is a serious undertaking, especially for first-time homebuyers. To get up to speed, SoFi’s mortgage help center is a useful place to start and have your mortgage questions answered.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Who gives you the mortgage credit certificate?

A mortgage credit certificate program is administered by state-level housing finance agencies and issued by mortgage brokers or lenders.

Does everyone get a mortgage credit certificate?

No, mortgage credit certificates have borrower income limits and other eligibility requirements. For context, only 10,836 MCCs were issued in 2022, down from 22,298 issued in 2019, likely due to the fact that some states have discontinued their MCC program.

Can I refinance with a mortgage credit certificate?

A mortgage credit certificate does not prevent you from refinancing, but you’ll lose the MCC on your current loan. Many programs, though, allow borrowers to apply to receive a new MCC issued with their refinanced mortgage.

How do I know if I have an MCC?

Borrowers apply for an MCC prior to closing and receive a physical copy with a unique certificate number from their local or state government.

Do I lose my mortgage credit certificate if I refinance?

The original mortgage credit certificate becomes void if you refinance, but you may be able to have the MCC reissued if the principal balance on the refinanced loan is lower than the original.

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Photo credit: iStock/Morsa Images

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

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Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

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.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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The average barber’s salary is $52,123 a year, according to the latest data from ZipRecruiter. But barber salaries can range from about $17,500 to more than $86,000.

How much money you can make as a barber may depend on several factors, including education, certifications, experience, and where you’re located. Here’s a look at what barbers do and how they get paid.

What Are Barbers?

A barber’s main job is to cut and style hair, usually for male clients. Barbers also may trim or shave facial hair, fit hairpieces, and provide hair-coloring services.

To become a barber, you must obtain a license in the state where you plan to work. Licensing qualifications can vary, but you’ll likely have to meet a minimum age requirement, have a high school diploma or equivalent, and have graduated from a state-licensed barber program. You may also have to pass a state licensing exam.

A barbershop often doubles as a social hub where men can go to swap stories and catch up on the latest news while they enjoy a little personal care. If mingling with clients all day isn’t your thing, you may want to check out jobs with less human interaction.


💡 Quick Tip: Online tools make tracking your spending a breeze: You can easily set up budgets, then get instant updates on your progress, spot upcoming bills, analyze your spending habits, and more.

How Much Do Starting Barbers Make?

An entry-level salary for a barber can range from $8.41 to $41.35 or more an hour, according to ZipRecruiter. Brand-new barbers tend to earn the highest hourly wages in New Jersey, Wyoming, and Wisconsin.

Recommended: What Trade Jobs Make the Most Money?

What Salary Can a Barber Expect to Make?

Barber jobs in the U.S. can pay anywhere from $17,500 to $86,000 or more, according to ZipRecruiter data. How much you can expect to make may depend on several factors, including how many hours you work and how many clients you serve; if you live in a region with more competitive pay; and if you work on commission, rent a chair at a shop, or own your own barbershop.

Here’s a look at the average barber’s income by state.

State	Average Salary for a Barber
Alabama	$49,572
Alaska	$53,033
Arizona	$50,968
Arkansas	$40,073
California	$46,632
Colorado	$50,860
Connecticut	$47,890
Delaware	$48,177
Florida	$40,869
Georgia	$46,181
Hawaii	$51,460
Idaho	$44,515
Illinois	$46,962
Indiana	$52,044
Iowa	$47,980
Kansas	$44,493
Kentucky	$42,214
Louisiana	$44,134
Maine	$45,672
Maryland	$46,693
Massachusetts	$53,224
Michigan	$42,137
Minnesota	$50,551
Mississippi	$47,266
Missouri	$45,239
Montana	$50,200
Nebraska	$45,804
Nevada	$50,144
New Hampshire	$54,449
New Jersey	$53,861
New Mexico	$50,829
New York	$60,841
North Carolina	$43,866
North Dakota	$52,473
Ohio	$49,290
Oklahoma	$44,358
Oregon	$52,559
Pennsylvania	$55,714
Rhode Island	$48,681
South Carolina	$44,791
South Dakota	$49,593
Tennessee	$47,059
Texas	$44,130
Utah	$46,849
Vermont	$60,007
Virginia	$47,628
Washington	$53,744
West Virginia	$43,029
Wisconsin	$52,882
Wyoming	$53,101

Source: ZipRecruiter

Recommended: Highest Paying Jobs by State

Barber Job Considerations for Pay and Benefits

A barber’s compensation is traditionally set up in one of two ways:

•   Renting a chair or booth: Barbers who rent a chair at a barbershop pay the owner or franchise a fee for the space where they work, but they keep the rest of what they earn. This can give barbers more control over their work schedule and the services they choose to offer.

•   Earning a commission: Barbers who work on commission are paid a percentage of what they earn (typically between 40% to 70%). Or they could receive a predetermined hourly wage or salary plus a bonus commission. New barbers may choose to work a few years on commission to gain knowledge of how the business works and build a clientele, and then switch to renting a chair.

In addition, barbers can earn tips, usually about 15% to 20% of the price of a haircut or other service provided. Online tools like a money tracker app can help you keep track of your spending and saving from month to month.

Pros and Cons of a Barber’s Salary

As with any job, there are pros and cons to working as a barber, including:

Pros

•   Attending a barber school can take less time (usually a year or less) and is far less expensive than getting a college degree. Tuition is about $14,000 on average (not including books and supplies), but costs can range from about $4,000 to $25,000, depending on the program. Financial assistance may be available through federal or private student loans, grants, and scholarships.

•   Job prospects for barbers are good. According to the U.S. Bureau of Labor Statistics, employment for barbers is projected to grow by 7% over the next decade, which is faster than the average for all occupations.

•   Popular barbers often can work the hours they choose while serving clients who appreciate their creativity — and reward them with their loyalty and generous tips. If you like the idea of becoming an entrepreneur, you may even decide to start your own business someday.

Cons

•   It can take time to build a reputation and a reliable list of repeat customers. In the meantime, you may experience some income instability, and tips may vary from one client to the next. This could make budgeting and spending difficult at times.

•   As a barber, you may not receive the same employee benefits that other careers generally offer, including health insurance, a 401(k) or similar retirement plan, paid sick leave, or vacation pay. You might have to work nights, weekends, or a fluctuating schedule that makes it hard to plan your social life. And you may have to pay for your own work tools.

•   You might also want to consider how long your career as a barber might last. Though it can be a fulfilling job, the work can be hard on your neck, back, hands, and feet.


💡 Quick Tip: We love a good spreadsheet, but not everyone feels the same. An online budget planner can give you the same insight into your budgeting and spending at a glance, without the extra effort.

The Takeaway

Your income potential as a barber will likely depend on where you work and the loyalty of your clientele. If you’re a creative and skilled stylist who likes keeping up with the latest trends, and you have good social skills, being a barber could be a great career choice. It also can help to have some business skills, as you may face unique challenges when it comes to managing your income, tracking your cash flow, planning for retirement, and paying taxes.

FAQ

Can you make $100,000 a year as a barber?

Once you establish yourself and build a solid clientele, you may be able to earn six figures as a barber. Your success, though, will likely depend on how in demand you are, how willing you are to travel or work long hours, the clientele you cater to, and if you own your own shop.

Do people like being a barber?

Though barbering can be hard work, barbers on Payscale.com gave their job an average of 4.2 stars out of 5. If cutting hair and providing other personal care services is your passion — and you’d enjoy building a bond with your clients — you could find a career as a barber is right for you.

Is it hard to get hired as a barber?

According to the U.S. Bureau of Labor Statistics, the job outlook for barbers should be solid for at least the next decade. If you get the proper training, become a licensed barber, and can demonstrate that you have the skills and demeanor for the job, it shouldn’t be too hard to find work.

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Photo credit: iStock/dusanpetkovic

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The median annual salary for pediatricians is $198,420, according to the most recent data from the Bureau of Labor Statistics. There are many different paths a doctor can take when it comes to choosing their medical specialty. Doctors who enjoy helping children feel their best and live healthy lives will likely find a lot of fulfillment in their jobs.

To learn more about how much a pediatrician makes a year, keep reading.

What Are Pediatricians?

A pediatrician is a type of doctor who provides medical care to children ranging from infancy to adolescence. They specialize in diagnosing and treating injuries, developmental issues, and illnesses children commonly experience. From routine exams to issuing vaccines to providing medicine to sick children, pediatricians can help.

The path to becoming a pediatrician can be a long and expensive one. Typically, that means college, medical school, a residency, and possibly a fellowship. Medical school can easily cost $250,000 in tuition. It’s wise to consider this investment when pursuing a career as a pediatrician. Many doctors have a high amount of medical school debt when starting out.

Also, keep in mind that being a pediatrician involves interacting with children and their families all day. This may not therefore be the best job for introverts.


💡 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 Pediatricians Make a Year?

While pediatricians can eventually earn very competitive salaries, like any job, they tend to earn less when they are entry-level. The lowest 10% of earners in this role make just $75,670, which is significantly lower than the median annual salary for all physicians of $198,420.

What is the Average Salary for a Pediatrician?

On average, a pediatrician can make a salary that is considerably higher than the American average for all jobs. Where a pediatrician chooses to work can greatly impact how much a pediatrician earns. This is a quick glance at the annual mean wage for a variety of workplaces where a pediatrician may be employed:

•   Offices of physicians: $203,690

•   General medical and surgical hospitals: $180,790

•   Outpatient care centers: $232,420

•   Colleges, universities, and professional schools: $84,810

•   Specialty (except psychiatric and substance abuse) hospitals: $201,100.

Another factor that also affects pediatrician earning potential is the state the doctor works in. This table below highlights how average pediatrician salaries vary by state, with typical pay arranged from highest to lowest by location.

In addition, it shares how much a pediatrician’s hourly pay vs, salary is.

What is the Average Pediatrician Salary by State for 2023

State	Annual Salary	Monthly Pay	Weekly Pay	Hourly Wage
Oregon	$222,171	$18,514	$4,272	$106.81
Alaska	$221,079	$18,423	$4,251	$106.29
North Dakota	$221,044	$18,420	$4,250	$106.27
Massachusetts	$218,405	$18,200	$4,200	$105.00
Hawaii	$216,375	$18,031	$4,161	$104.03
Washington	$211,404	$17,617	$4,065	$101.64
Nevada	$209,030	$17,419	$4,019	$100.50
South Dakota	$208,910	$17,409	$4,017	$100.44
Colorado	$206,290	$17,190	$3,967	$99.18
Rhode Island	$205,782	$17,148	$3,957	$98.93
New York	$196,083	$16,340	$3,770	$94.27
Delaware	$193,921	$16,160	$3,729	$93.23
Vermont	$191,477	$15,956	$3,682	$92.06
Virginia	$191,115	$15,926	$3,675	$91.88
Illinois	$191,057	$15,921	$3,674	$91.85
Maryland	$187,806	$15,650	$3,611	$90.29
Nebraska	$183,797	$15,316	$3,534	$88.36
Missouri	$182,659	$15,221	$3,512	$87.82
California	$182,152	$15,179	$3,502	$87.57
South Carolina	$181,082	$15,090	$3,482	$87.06
Pennsylvania	$179,627	$14,968	$3,454	$86.36
New Jersey	$179,258	$14,938	$3,447	$86.18
Oklahoma	$177,994	$14,832	$3,422	$85.57
Maine	$177,900	$14,825	$3,421	$85.53
Wisconsin	$177,526	$14,793	$3,413	$85.35
North Carolina	$177,345	$14,778	$3,410	$85.26
New Hampshire	$174,681	$14,556	$3,359	$83.98
Idaho	$174,250	$14,520	$3,350	$83.77
Texas	$173,077	$14,423	$3,328	$83.21
Kentucky	$172,518	$14,376	$3,317	$82.94
Wyoming	$171,910	$14,325	$3,305	$82.65
Minnesota	$171,467	$14,288	$3,297	$82.44
Michigan	$170,777	$14,231	$3,284	$82.10
New Mexico	$170,501	$14,208	$3,278	$81.97
Indiana	$169,638	$14,136	$3,262	$81.56
Ohio	$166,670	$13,889	$3,205	$80.13
Arizona	$166,130	$13,844	$3,194	$79.87
Connecticut	$165,286	$13,773	$3,178	$79.46
Mississippi	$164,126	$13,677	$3,156	$78.91
Iowa	$163,921	$13,660	$3,152	$78.81
Montana	$163,627	$13,635	$3,146	$78.67
Arkansas	$163,030	$13,585	$3,135	$78.38
Alabama	$161,584	$13,465	$3,107	$77.68
Utah	$159,236	$13,269	$3,062	$76.56
Tennessee	$159,121	$13,260	$3,060	$76.50
Kansas	$154,538	$12,878	$2,971	$74.30
Georgia	$150,529	$12,544	$2,894	$72.37
Louisiana	$149,706	$12,475	$2,878	$71.97
West Virginia	$138,728	$11,560	$2,667	$66.70
Florida	$133,219	$11,101	$2,561	$64.05

Source: ZipRecruiter

Pediatrician Job Considerations for Pay & Benefits

Alongside earning a $100,000 salary or more, most pediatricians also receive superior employee benefits. If a pediatrician runs their own practice, they will need to supply themselves and their employees with these benefits.

Those who are employed by employers like hospitals or medical groups can expect to gain access to benefits like paid time off, health insurance, and retirement accounts. They may also have unique benefits like continuing education allowances and malpractice insurance coverage.


💡 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 Pediatrician Salary

The main advantage associated with competitive pay for pediatricians is that they are quite high. With a median salary of $198,420, pediatricians are greatly rewarded for their hard work.

However, they must pursue many years of higher education to earn that salary. Many young doctors struggle under the weight of their student loan payments. So, while this salary may seem high at first glance, much of it can go towards student loan debt initially.

It’s also worthwhile to consider work-life balance. Being a pediatrician and improving the health of children can be a very rewarding career, but it can also involve long, tiring hours and being on call for patients on nights and weekends. Medical problems and emergencies crop up all the time, so this is a factor to acknowledge.

Recommended: How Much House Can I Afford?

The Takeaway

Pediatricians can earn very high pay while making a big difference in the lives of their patients and their families. They do have to commit to many years of schooling and education to become a pediatrician, but once they do, they can earn a great living.

SoFi helps you stay on top of your finances.

FAQ

Can you make 100k a year as a pediatrician?

Most pediatricians make $100,000 a year or more, especially after gaining a few years of work experience. The median annual salary for a pediatrician is $198,420.

Do people like being a pediatrician?

Pursuing a career in pediatric medicine is a major commitment and those who are passionate about this field and patient care are likely to really enjoy their work. However, this role requires many hours of patient interaction a day, so even if someone finds the work fascinating, it won’t be a good fit for them if they are antisocial.

Is it hard to get hired as a pediatrician?

The main challenge in getting hired as a pediatrician surrounds not having the right credentials. Potential pediatricians must pursue medical school and any required medical licenses in order to find a job in this field, which is no easy feat.

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Photo credit: iStock/alvarez

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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.

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

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