Which country has the highest average salary, the US or Canada?

Two North American powerhouses, the United States and Canada boast robust economies and high standards of living, though the citizens in both nations often earn vastly different amounts.

In terms of raw numbers, the median income in the United States stood at $70,784 USD in 2021, while Canada reported a median income of $68,400 CAD in the same year. However, it’s crucial to note that when converted to USD, the Canadian figure equates to approximately $50,348, creating a more significant gap.

However, it’s important to note that salaries can vary significantly by region within each country. For instance, in the US states like Massachusetts, New York, and California offer higher average salaries, while states such as Mississippi, Arkansas, and West Virginia have averages around Canada’s national level.

While the US may have higher nominal salaries, purchasing power parity (PPP) provides a more accurate comparison of living standards. PPP accounts for the cost of living and inflation rates in different countries. When adjusted for PPP, the gap between US and Canadian salaries narrowsvery slight with the US boasting wages of $80,526 while Canada lags behind at $63,398. Canada’s figurte is actually lower than before the covid-19 pandemic..

What the average salary means in practice

Despite higher salaries, Americans generally face a higher cost of living. For instance, consumer prices in Toronto are about 26.6% lower than in New York City. Rent in Toronto is roughly half the price of renting in New York.

Canada also offers universal healthcare, which leads to significantly reduce out-of-pocket expenses for residents. The US has a privatized healthcare system that leads to higher individual costs. Indeed, the cost of US healthcare is nearly 50% more expensive in the US compared to Canada with Americans spending an average of $11,172 per capita annually on healthcare while Canadians allocate about $7,064 per capita.