What is the average salary of a Wall Street trader?

Answer 1

Salaries are considered play money for wall street traders. People must realize there is a difference between a traders salary and bonus, those two added together equal a traders total compensation. Their salary received is their guaranteed money that is paid to them every two weeks in a tax reduced paycheck just like any other job. The average salary for a wall street trader is 300,000 dollars before taxes. This would put them in the highest tax bracket so approx. 40% of this is going to Uncle Sam. So, after taxes they will be netting approx. 180,000 dollars per year. Their bonus is a completely different subject and is based upon their "desks" performance throughout the year. these bonuses are usually paid sometime in mid-December and are subject to a higher tax bracket usually approx. 45%. Since there is no way to determine an exact bonus since they fluctuate year to year I will give you an example. For the year 2007 when the mortgage desk at Goldman Sachs bet, or hedged, very heavily against sub-prime mortgages, meaning they guessed that people would default on them, the mortgage desk made approx 4.4 billion dollars for the company when the mortgage collapse eventually occurred. The traders involved in these bets on average received 10-15 million dollar bonuses. Not bad for a years work (actually 6 months work since they didn't start shorting the mortgages until May or June). Therefore, it is very lucrative to be a trader on Wall Street. I hope this helps a bit!!