Small business owner salaries by state compared to the U.S. average salary for all occupations
 | June 30, 2025 | 4 min read |
The average income of small business owners varies, sometimes significantly, by state. Meanwhile, according to the latest data from the Social Security Administration, the national average wage for employees across all occupations is $66,621. Using data from ZipRecruiter, the Ooma team compared the average salaries of small business owners in each state to this figure. The analysis revealed how much more one might expect to earn as a small business owner depending on location.
Please note that this does not consider the type of small business (for example, restaurant, call center, etc.). Furthermore, starting your own small business does not guarantee success. However, it’s clear from the data that successful businesses often enable their owners to earn a higher salary than the national average.
Where are the highest average salaries for a small business owner in the U.S.?
Small business owners earn more than twice the national average salary in 15 states and Washington, D.C.:
- Alaska
- Colorado
- Delaware
- Hawaii
- Massachusetts
- Nevada
- New Jersey
- New York
- North Dakota
- Oregon
- Pennsylvania
- South Dakota
- Vermont
- Washington
- Washington, D.C.
- Wisconsin
Small business owners earn the highest average salary in Washington state, at $144,941 annually, which is 2.272 times (127.2 percent more than) the average U.S. salary of $63,795. Washington, D.C., is a close second, with small business owners earning an average of $144,612 per year, 2.267 times (126.7 percent more than) the average U.S. salary.
Why does Washington state have the highest average small business owner salary?
The small business owners in Washington state earn more than those in other states because many of the small businesses there are tech companies. Seattle and nearly the entire Puget Sound region have become tech hubs with abundant coworking spaces, making it easier for startups. Additionally, many employees of large corporations such as Google, Amazon and Microsoft—all with large campuses in Washington—have become dissatisfied with their roles. This has allowed small businesses in the area to attract the local talent they need.
Furthermore, Washington state has no personal or corporate income taxes, allowing businesses to generate higher profits and enabling owners to earn more. However, other fees must still be paid, and Seattle, in particular, has high property and sales taxes. Therefore, while small business owners in Washington may earn more than those in other states, they may also encounter a higher cost of living.
Washington, D.C., in second place, is also a tech hub. The D.C. government offers many programs and incentives for entrepreneurs. And in the nation’s capital, small business owners have easier access to federal government representatives
Where is the lowest average salary for a small business owner in the U.S.?
Regardless of where you start your small business, the average salary for a small business owner is higher than the average U.S. salary, but the state where small business owners earn the least on average is Florida. In Florida, small business owners earn an average of $95,633 per year, which is 1.50 times (49.9 percent more than) the average U.S. salary. Small business owners earn the second-least on average in West Virginia, bringing in an average of $99,072 per year, 1.55 times (55.3 percent more than) the average U.S. salary.
Why is the average small business owner salary in Florida lower?
There are various reasons why small business owners in Florida earn less than those in other states. One reason is competition. Florida is one of the three U.S. states with the highest number of small businesses. The state is primarily supported by its tourism revenue and does not impose a personal income tax, making it an appealing destination for LLCs. However, private-sector companies in Florida are not required to provide certain benefits, such as sick leave, which makes it challenging for many of these companies to find reliable employees unless they invest in comprehensive benefits packages. Doing so would undoubtedly leave less for the owner to take home.
There are numerous factors to consider when operating a small business, whether you’re in Washington, Florida or elsewhere in the United States. One of these is communication. Reliable VoIP phone services from Ooma can be integrated into your CRM and provide essential features for a small business phone system, including virtual receptionist and videoconferencing capabilities.
Annual small business owner salaries by state and comparisons to the national average across occupations
| State | Annual Salary | Compared to the National Average Salary | Percent More |
|---|---|---|---|
| Washington | $144,941 | 2.272 | 127.2% |
| District of Columbia | $144,612 | 2.267 | 126.7% |
| New York | $140,006 | 2.195 | 119.5% |
| Massachusetts | $139,762 | 2.191 | 119.1% |
| Alaska | $137,819 | 2.160 | 116.0% |
| Vermont | $136,067 | 2.133 | 113.3% |
| North Dakota | $135,405 | 2.123 | 112.3% |
| Oregon | $135,303 | 2.121 | 112.1% |
| Colorado | $134,565 | 2.109 | 110.9% |
| Hawaii | $132,958 | 2.084 | 108.4% |
| Nevada | $130,315 | 2.043 | 104.3% |
| New Jersey | $129,922 | 2.037 | 103.7% |
| Wisconsin | $129,169 | 2.025 | 102.5% |
| Pennsylvania | $128,280 | 2.011 | 101.1% |
| Delaware | $128,083 | 2.008 | 100.8% |
| South Dakota | $127,973 | 2.006 | 100.6% |
| Virginia | $126,875 | 1.989 | 98.9% |
| California | $126,297 | 1.980 | 98.0% |
| Minnesota | $125,338 | 1.965 | 96.6% |
| Rhode Island | $125,325 | 1.964 | 96.4% |
| New Hampshire | $124,454 | 1.951 | 95.1% |
| Maryland | $124,202 | 1.947 | 94.7% |
| New Mexico | $124,015 | 1.944 | 94.4% |
| Illinois | $124,009 | 1.944 | 94.4% |
| Maine | $123,903 | 1.942 | 94.2% |
| Wyoming | $123,010 | 1.928 | 92.8% |
| Nebraska | $122,015 | 1.913 | 91.3% |
| Indiana | $121,774 | 1.909 | 90.9% |
| Connecticut | $121,739 | 1.908 | 90.8% |
| Ohio | $121,663 | 1.907 | 90.7% |
| Mississippi | $121,199 | 1.900 | 90.0% |
| Idaho | $120,409 | 1.887 | 88.7% |
| Iowa | $120,200 | 1.884 | 88.4% |
| Missouri | $120,039 | 1.882 | 88.2% |
| Arizona | $119,256 | 1.869 | 86.9% |
| Texas | $119,226 | 1.869 | 86.9% |
| South Carolina | $118,753 | 1.861 | 86.1% |
| Oklahoma | $118,161 | 1.852 | 85.2% |
| Montana | $117,459 | 1.841 | 84.1% |
| Utah | $116,502 | 1.826 | 82.6% |
| North Carolina | $116,302 | 1.823 | 82.3% |
| Tennessee | $116,150 | 1.821 | 82.1% |
| Alabama | $115,993 | 1.818 | 81.8% |
| Kansas | $114,132 | 1.789 | 78.9% |
| Michigan | $111,540 | 1.748 | 74.8% |
| Kentucky | $111,148 | 1.742 | 74.2% |
| Louisiana | $109,432 | 1.715 | 71.5% |
| Georgia | $108,058 | 1.694 | 69.4% |
| Arkansas | $105,821 | 1.659 | 65.9% |
| West Virginia | $99,072 | 1.553 | 55.3% |
| Florida | $95,633 | 1.499 | 49.9% |
Sources:
https://www.ziprecruiter.com/Salaries/What-Is-the-Average-Small-Business-Owner-Salary-by-State
Husain Sumra is a former journalist who reported on the biggest companies in tech, from Apple to Amazon, covering cloud services, consumer technology and communication solutions. His journalism background has helped him bring a customer-first approach to content marketing, creating pieces of content aimed at helping people.
