The average U.S. salary is higher than the average U.K. salary, but that doesn’t automatically mean people in the U.S. have more money to spend. Even though U.S. workers have more income, other factors influence this amount, including healthcare, taxation and more.
The United States (U.S.) and the United Kingdom (U.K.) have many differences. One of the most significant contrasts is income.
Average U.S. salaries versus U.K. salaries are vastly different, but for a good reason. Many factors influence how much employers pay their workers, including benefits, healthcare costs and more.
Below, we will summarize some of the essential information you should know when considering salary differences between these places.
Average Salary in the US vs. the UK
The average salary in the U.S. in 2021 was around $58,260 across all occupations. In the U.K., the average salary in 2021 was about $38,291 when converted to dollars.
The difference in salaries between the U.S. and the U.K. is not drastic when considering the factors that play into pay levels.
However, it is still important to consider the gap between salaries in these regions of the world and why they differ.
US Statistics: Monthly Salary and Gender Gap
In June of 2022, the average monthly salary in the U.S. was $4,427. The U.S.'s unemployment rate in June of 2022 landed at 4%.
The weekly median income for women in 2022 is $943. For men, the median weekly pay in 2022 is $1,144. These income rates vary based on age, occupation type, race and ethnicity.
The Bureau of Labor Statistics reported men aged 35 to 64 years old take home the highest weekly income in the U.S.
UK Statistics: Monthly Salary and Gender Gap
In May of 2022, the average monthly salary in the U.K. was £2,989 ($3,658). The U.K.'s unemployment rate in May of 2022 stood at 4%.
The Office for National Statistics reported that the gender pay gap in the U.K. rose in 2021 to 15.4%. Among full-time employees, the gender pay gap percentage landed at 7.9% in 2021, which is lower than what it was in 2020.
Why Are UK Salaries Lower Than the US?
The average salary in the U.K. versus the U.S. is lower for all demographic groups, and the reasons why vary.
The key difference is that the social welfare benefits in the U.K. are not the same as those in the U.S. The U.K. also has more protections for employees than the U.S., which impacts pay rates.
The five primary factors impacting these salary differences include:
1. Pension Benefits
Employees in the U.K. have a pension automatically because this is a mandatory benefit. U.S. employees may determine a financial pension plan and save for this benefit, but it is not something employers must offer.
Additionally, since employers in the U.K. must contribute at least 3% to this pension, this is a huge financial benefit for U.K. employees that U.S. employees may not receive.
2. Healthcare
The average monthly salary in the U.S. factors in the fact that Americans don’t have a nationalized healthcare program like those in the U.K.
Healthcare in the U.S. is more accessible, but it costs a lot more for the average person to pay out-of-pocket costs or obtain health insurance coverage.
3. Holiday Benefits
Employees in the U.K. have more paid vacation days and holiday benefits than those in the U.S.
U.K. employees receive:
Even though their overall wage is slightly lower, they can take more time off from work on average without penalty to rest and recharge, which is a massive benefit for many employees.
4. Income Disparity
Income inequality in the U.S. is a huge factor influencing pay discrepancies. Even though the U.K. faces a similar issue, the level of inequality in the U.K. is not quite as prominent as in the U.S.
5. Difference in Cost of Living
The U.S. and U.K. both have similar costs of living, but the U.S. is still slightly more expensive. The cost of living drastically changes when considering major cities, such asLondon vs. New York City, against smaller cities or towns. The higher salaries in the U.S. reflect this difference.
Factors Influencing Income Disparity in the US vs. the UK
Income disparity refers to the gap between the highest-paid and lowest-paid workers. This impacts how much a person can spend as a consumer, affecting the nation’s economy.
In 2020, the richest people (the top 5% of earners) earned 23% of all income in the U.S. However, the lowest earners (the bottom 20%) only made 3% of the nation’s income.
The U.K. also has a high level of income inequality. In 2019 and 2020, 42% of income in the U.K. went to the top earners. 7% of all income went to the bottom earners (before housing costs).
Major factors that influence income disparity and inequality include:
Highest-Paying Industries in the UK and the US
Some of the highest-paying industries to consider for those in the U.S. include:
Employees in the U.K. receive the highest incomes in the following industries:
Because of the subsidization of specific industries in the U.K., such as healthcare and education, workers would expect a lower salary. However, with the benefits that come with some of these positions, the lower pay is worth it.
Key Takeaways
What is the average salary in the U.K. versus the U.S.?
(Reporting by NPD)
