How to use the cost of living salary calculator
- Choose Salary needed there to translate your pay to a new place, or What an offer is worth to translate an offer back to where you live now.
- Enter the yearly salary. In the first mode it is your pay now. In the second it is the offer in the new place.
- Enter a cost of living index for each place. Use any index you trust, and use the same one for both places. The values shown are examples.
- Read the matching salary, the change in dollars and percent and the monthly equivalent.
Formula
Salary needed in the new place = current salary x new index / current index
Offer in home terms = offered salary x current index / new index
Change = result - salary entered
An index compares the price of a fixed basket of goods, so the ratio of two index values says how much more or less the same lifestyle costs in the second place.
Moving from an index of 100 to an index of 125
Suppose you earn $80,000 where the index is 100 and you are weighing a move to a place with an index of 125. The matching salary is 80,000 x 125 / 100 = $100,000, which is $20,000 or 25% more, or $8,333.33 a month.
Turn it around: a $90,000 offer in the place with an index of 125 is worth 90,000 x 100 / 125 = $72,000 in your current terms, which is 20% less than the offer looks. Moving to a cheaper place works the same way, so $80,000 at an index of 100 needs only $64,000 where the index is 80.
Why an index is only a start
An index summarizes prices for a fixed basket of goods, mostly housing, food, transportation and services. Your own spending may be quite different, for example if you rent in one place and own in the other, have children in school or commute by car. A smaller place may also have lower pay for the same job, which the index does not show.
What to compare next
Income tax and local taxes differ between places and are not modeled, so compare take-home pay after you know the tax in each place. The Job Offer Comparison Calculator adds benefits to pay, the Moving Cost Calculator totals the one-time cost of the move and the Inflation Calculator shows how prices change over time.
Assumptions and limits
- Both index values come from the same source and describe the same basket of goods.
- The ratio of index values scales all spending the same way.
- Taxes, benefits and job-specific pay differences are not modeled.
- Nothing is uploaded. Calculations run in your browser.
Frequently asked questions
Where do I find a cost of living index?
Several public and commercial sources publish them for cities and regions. Pick one source for both places so the basket of goods matches. The values on this page are examples, and no index is built in.
Does a 25% higher index mean I need 25% more pay?
To keep buying the same basket, yes, because the salary scales with the index ratio. Your own mix of spending, such as housing, may differ from the basket, so the real need could be higher or lower.
Does this include taxes?
No. Income, sales and property taxes differ by place and are left out. Compare the after-tax result separately before you decide.
What do I do with an offer from a cheaper place?
Use the second mode. It tells you what the offer is worth in your current place, so you can compare it with your current pay on equal terms.