A college graduate with MBA degree can expect a median entry level salary of $100,000. Some have scored as much as $680,000 depending on the student and the hiring company.
It’s not easy pinning down exact MBA salary numbers because it’s such a varied field. An MBA can be an accountant, marketing manager, CFO or HR manager. That said, $100,000 is a solid middle-of-the-road figure. Students who graduate from one of the top ten business schools will see a higher median pay of $140K. After ten years of solid work, many MBA graduates can see their pay rise into the $200,000 to $500,000 range or even higher.
An MBA is a two year add-on for a four year business degree. By some accounts, it nearly doubles the starting salary of many business jobs. We break down all the MBA salary facts below.
MBA Salary Facts
Just how much money does an MBA make? The short answer is, about $100,000 straight out of college. That goes up to $300,000 for those with talent after a decade of hard work. On the outside of the bell curve, some MBA graduates can make as little as $50,000 a year or as much as $700,000. Meanwhile, those with only a four-year business degree typically land work for $60,000 a year fresh out of school. The table below breaks down the top-line MBA pay facts.
MBA Salary Facts | |
---|---|
Median MBA new graduate salary | $100,000 |
Median business bachelor degree salary | $60,000 |
Median MBA salary according to the Graduate Management Admission Council | $100,000 |
Median salary of all 45,000 MBA jobs listed on Indeed.com | $95,000 |
Median MBA salary according to the U.S. Bureau of Labor Statistics | $118,000 |
High end MBA salary (for example top jobs in the hedge fund world) | $700,000 |
Average MBA salary for graduates of the top 10 business schools | $140,665 |
Probable MBA salary after 10 years of solid work | $175,000 |
MBA salary for top workers after 10 years of solid work | $300,000 |
How We Know an MBA Grad Earns $100,000
One downside of swallowing a fact like this whole is that it pays to consider the source. The GMAC is a nonprofit organization of leading graduate business schools. In other words, the top graduate business schools all got together and released a study that says buying what they’re selling will nearly double any business grad’s salary. It’s kind of like asking a car salesperson if you should buy a car from him or her. We’re absolutely not saying GMAC is lying. We’re saying it doesn’t help them any to say an MBA’s not worth the money. In fact, it turns out GMAC’s study isn’t that far from the truth. We just thought we ought to mention it because so many online publications cite it as a source for MBA salary data, including the Wall Street Journal.
Digging a little deeper, a check of Indeed.com reveals a handy tool. If it’s impressive that GMAC conducts an annual survey of 800 recruiters, what about a by-the-minute survey of 160,000 actual jobs? That’s what Indeed.com has hidden in a corner of its website. Indeed lists 160,000 business admin jobs and 45,000 of them require MBAs. The MBA jobs have an average salary of $95,000. The jobs requiring only a BA average $65,000. That’s not quite the same thing GMAC advertises, but it’s not apples to apples either. Averages aren’t the same as medians, and the jobs listed on Indeed.com are likely to skew somewhat lower salary-wise than the pool of all jobs in general. Still, it at least gives evidence that GMAC’s data is in the ballpark of reality.
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How Much Money an MBA Makes According to the U.S. Government
If these numbers seem low for people with MBA’s who’ve been in the workforce for 10 or 20 years, don’t panic. Though BLS figures may seem incredibly official, it’s just mass data collected and in many cases estimated by the government. For example a deep analysis of firefighter salaries found that in many cases, firefighters made a lot more than BLS data indicated.
MBA Career | Salary |
---|---|
Marketing Manager | $125,000 |
Sales Manager | $114,000 |
IT Manager | $132,000 |
HR Manager | $104,000 |
Financial Manager | $118,000 |
Median | $118,000 |
The Ted Talk below suggests an alternative to the MBA education path.
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Median MBA Salary for the Top 10 Business Schools
Getting into specifics, the table below shows average salaries for the top 10 business graduate schools in the United States. The average of all those averages is $140,665. That’s the average starting salary of every new hire MBA from all ten schools. That’s according to 2015 data from U.S. News and World Report’s annual survey of the top business schools.
Starting MBA Salaries from the Top 10 Business Schools | |
---|---|
School | Average MBA Salary |
Stanford Graduate School of Business | $142,834 |
Harvard Business School | $144,750 |
Pennsylvania - Wharton | $142,574 |
Chicago - Booth | $137,615 |
Columbia Business School | $139,006 |
Northwestern - Kellogg | $136,357 |
MIT - Sloan | $142,936 |
Dartmouth - Tuck | $142,489 |
Duke - Fuqua | $137,154 |
UC-Berkeley - Haas | $140,935 |
Average of All Top 10 Schools | $140,665 |
Down the Road: Long Term Pay for MBAs
MBA vs Business Degree
The million-dollar question for business students is, “Should I hit the workforce now and start earning a paycheck, or should I stick it out two more years and make more money later?” The MBA vs business dilemma is a tricky one. The table below breaks it down in real terms. Once we figure in tuition and all other expenses such as cost of living, an MBA from a top school costs about $140,000. Add in $110,000 from two years spent not working as a four-year business school graduate and the total bill comes to a quarter of a million. The median extra pay from an MBA is $55,000. That means it will take the typical MBA grad 4.5 years to pay off their MBA degree. That’s not the end of the story though. Generally speaking, the employee with the MBA degree will earn a lot more than the non-MBA worker for the rest of his or her career.
MBA vs Business Degree | |
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Cost of MBA (including tuition and all other expenses) | $140,000 |
Lost income from not working for two years | $110,000 |
Total cost | $250,000 |
Extra pay per year from an MBA | $55,000 |
Years to break even | 4.5 |
Interested in finding out more about how much money people make in different careers? Check out our articles on nurse salary, firefighter salary and doctor salary by clicking the links here. For fun, see our article on NBA salary too.