Is your salary good in Memphis?

Is your salary good in Memphis?

Median household income in Memphis was about $51,736 as of the most recent 2024 American Community Survey estimate, well below the national median household income. Because the city's overall price level sits about 8% below the U.S. average, a salary that would feel merely adequate in a higher-cost metro tends to go further in Memphis, particularly on housing.

A single adult earning $50,000-$60,000 in Memphis is generally in a solid position relative to local costs, while approaching SmartAsset's 2026 comfortable-salary estimate of about $86,300 (gross, pre-tax) starts to comfortably cover savings and discretionary spending on top of necessities. Dual-income households or those earning above the local median have meaningfully more room than the raw income figure suggests, given how far housing dollars stretch locally.

Housing — renting and buying

As of recent 2025-2026 rental market data, a typical 1-bedroom apartment in Memphis rents for around $1,050-$1,100 per month, and a 2-bedroom runs roughly $1,150 per month; rent growth has been minimal over the past year, with reported year-over-year increases well under 1%. These figures are consistent with the BEA's finding that Memphis housing costs run about 20% below the national average overall.

On the buying side, the median home value in Memphis was approximately $157,100 as of the latest American Community Survey estimates, still less than half the national median home value. A different metric, Redfin's median sale price, runs higher at around $210,000, reflecting recent sales activity rather than the full owner-occupied housing stock; the two figures measure different things and are not directly comparable. Homeownership rates in the city (under 45%) run well below the national average, reflecting both a large rental stock and price points that remain accessible relative to most major U.S. metros.

Everyday costs

Groceries and other goods in Memphis price out close to the national average, with the BEA's goods index at 96 (about 4% below average) — noticeably less of a discount than housing offers. Utilities are the cheapest major category, indexed at 74 (about 26% below the U.S. average), reflecting relatively low regional energy costs and lower housing-related overhead.

Other services — a broad category covering things like healthcare, personal care, and recreation — run about 5% below the national average (index of 95). Transportation costs in Memphis are shaped by its car-dependent layout; while gas and vehicle costs track close to national norms, most residents budget for a car as a near-necessity, which offsets some of the savings seen elsewhere.

Taxes in Memphis

Tennessee has no state income tax on wages or salaries, a significant advantage for take-home pay compared with most states; the state's old Hall Tax on interest and dividend income was fully repealed effective January 1, 2021. In place of income tax, Tennessee relies more heavily on sales tax: the state rate is 7%, Shelby County adds 2.25%, and the City of Memphis adds a further 0.5% local-option rate, bringing the combined sales tax within Memphis city limits to about 9.75% — among the highest combined rates of any major U.S. city.

Property taxes are relatively low statewide, with an average effective rate around 0.45% and a median annual bill of about $1,488 — roughly half the national average. Shelby County is a notable exception, however, with an effective property tax rate of about 0.89%, nearly double the state average and the highest of any Tennessee county, which meaningfully narrows the property-tax advantage for Memphis homeowners specifically.

A living wage vs a comfortable salary

The MIT Living Wage Calculator puts the bare-necessities living wage for a single adult in Shelby County at about $20.75/hour, or roughly $43,150/year before taxes, covering housing, food, transportation, healthcare, and other minimum costs. A genuinely comfortable single-adult salary is a different, higher bar: SmartAsset's 2026 salary-needed-to-live-comfortably study, which applies a 50/30/20 budget framework (50% needs, 30% wants, 20% savings) to gross, pre-tax income, puts that figure at about $86,300 a year for a single adult in Memphis.

For a family of four with one working adult and one at home, MIT estimates bare-necessities expenses at about $36.17/hour, or roughly $75,224/year before taxes — with housing (about $15,400/year), transportation (about $14,300/year), and food (about $13,000/year) as the largest line items. SmartAsset's 2026 study estimates a comfortable gross household income for a Memphis family of four, under the same 50/30/20 framework, at just under $198,400 — notably, Memphis ranked among the most affordable major metros nationally for a family of four under that study.

Who Memphis suits

Memphis works well for remote workers, retirees on fixed incomes, and new grads who want low housing costs and no state income tax to stretch an early-career salary; the combination of cheap rent and cheap utilities is a particular advantage for anyone not tied to a high local salary. It also suits buyers priced out of pricier Southern metros, since the median home value remains well under half the national figure.

It is harder on residents who rely heavily on public transit or don't drive, since the metro is car-dependent and a personal vehicle is close to a necessity for most jobs and errands. Higher earners chasing career growth in tech, finance, or other high-wage industries may also find fewer opportunities locally than in larger regional hubs, even though the cost savings on housing are real.

How Memphis compares

Against Nashville, Tennessee's other major metro, Memphis is meaningfully cheaper on housing — Nashville's home prices and rents have risen well above the national average in recent years, while Memphis has stayed comparatively flat and affordable — though Nashville offers a stronger job market and higher median incomes. Both cities share Tennessee's no-income-tax advantage.

Compared with similarly sized Southern peer metros like Birmingham, Alabama and Louisville, Kentucky, Memphis is broadly competitive on cost of living, with all three offering below-average housing costs; Memphis's chief differentiator is the absence of state income tax, since both Alabama and Kentucky levy one, which can meaningfully widen the take-home-pay gap for higher earners choosing between the three.

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