What a Cost of Living Calculator Actually Tells You
Cost of living is a practical way to compare how far your money goes in different places. A salary that feels comfortable in one city might feel tight in another because essentials like housing, groceries, transportation, healthcare, and childcare are priced differently. Our calculator estimates the equivalent salary you would need in a destination to maintain the same purchasing power you have today, and it breaks down how monthly spending might shift across categories.
Who This Helps
- Professionals evaluating a relocation or remote work move
- Graduates comparing job offers across cities and states
- Families planning for childcare, housing, and commuting tradeoffs
- Employers setting location-adjusted compensation bands
The Salary Equivalence Formula
The core calculation is straightforward:
Equivalent Salary = Current Salary × (Destination Index ÷ Current Index)Index values are a way to express relative prices. A value of 100 represents a baseline location. A destination with an index of 120 is roughly 20% more expensive than the 100 baseline. If you do not have a city index, use state-level Regional Price Parities (RPP) published by the U.S. Bureau of Economic Analysis as a reliable stand‑in. For taxes, the calculator lets you set effective rates for each location so you can compare after‑taxtake‑home as well.
How to Choose Index Values
There are several reputable sources for price comparisons:
- BEA Regional Price Parities (RPP) — state and metro level relative price indexes
- BLS Consumer Price Index (CPI) — inflation over time (useful when adjusting past offers)
- Local Housing Market Data — rents and price-to-income ratios for housing adjustments
For a quick state-to-state comparison, set your current state as the current index and your destination state as the destination index. City‑level tools are useful for a finer lens on housing and commuting costs. Always sanity‑check large gaps by looking at local rents and typical commute costs.
Understanding After‑Tax Impact
Two locations with the same price levels can still feel different after taxes. Use realistic effective tax rates (combined federal, state, and local, after deductions) for each location. If you are unsure, start with your most recent paycheck as a baseline and try our Paycheck Calculator or state‑specific tax tools.
Category‑Level Detail (Optional but Powerful)
Not every category inflates equally. Housing might be dramatically higher while utilities or groceries are similar. Switch the calculator to Detailed mode to set category multipliers. A multiplier of 1.00 means the category moves in line with the overall index. A value of 1.20 means it is about 20% costlier than the overall average at the destination. This makes the projection much more realistic when a single category dominates your budget.
Worked Example
Suppose you earn $85,000 in a baseline area (index 100) and are considering a move to a destination at index 120. The simple equivalence suggests $102,000 to maintain purchasing power (85,000 × 1.20). If your effective tax rate would be 22% in both places, your current take‑home is about $66,300/yr and the destination take‑home is roughly $79,560/yr. If housing is unusually expensive in the destination (say housing multiplier 1.30), the category breakdown will show you how that pressure affects the monthly budget and where you may want to offset elsewhere.
Practical Tips Before You Decide
- Price your top three costs locally: housing, commuting, and childcare (if applicable).
- Confirm employer benefits (health plan, HSA/FSA, commuting, remote stipends) — they change net costs.
- Factor one‑time moving costs and the first month of duplicate expenses into your plan.
- Test a temporary budget for 1–2 months before committing to a long lease.
Limitations and How to Use This Tool Well
No index can capture every household's reality. Local neighborhoods, commute patterns, family size, and lifestyle all matter. Treat the result as a starting point and pressure‑test it with category estimates from real listings, grocery receipts, and insurance quotes. When in doubt, add a 5–10% buffer for uncertainty.
Related Tools
- Budget Calculator — build a destination budget from the ground up
- Paycheck Calculator — estimate take‑home pay based on location
- Savings Calculator — plan emergency funds for moving
Methodology Notes
We use a transparent approach centered on a price index ratio for salary equivalence and an adjustable category model for spending. Suggested sources for index values include BEA RPP for relative price levels and local market data for housing. This approach keeps inputs auditable and adaptable as new data becomes available.
Last updated: September 11, 2025