How to use the cost of living calculator
There is no built-in city database here. You enter both sides of the comparison, which means the result describes your life, not a statistical average.
- Enter your current monthly costs in the left field of each pair: housing, food, transportation, healthcare, childcare, utilities and everything else. Bank and card statements for the last three months give the most honest figures.
- Price the same lifestyle in the new city in the right field. Use real rent listings for a comparable home, daycare quotes, the cost of the commute you would actually make, and the insurance premiums you would pay there. If a cost disappears, enter 0.
- Enter your current salary, yearly and before tax.
- Choose how to measure spending. By default the calculator treats twelve months of your current costs as your yearly spending. If your list leaves things out, choose to enter the share of salary you spend instead.
- Add state and local income tax rates if they differ between the two places. Leave both empty to ignore taxes.
The chart puts the two cities side by side for each category, and the table shows the monthly difference and the percentage change.
How the salary needed is calculated
The method keeps two things constant: what your spending buys, and the dollars left over for taxes and savings.
Spending now = 12 × Current monthly costs (or Salary × Share spent)
Kept amount = Salary × (1 − Current local tax) − Spending now
Salary needed = (Spending now × Cost ratio + Kept amount) ÷ (1 − New local tax)The kept amount covers federal tax, payroll tax and savings. It stays the same in dollars, so only the spending part of your salary moves with local prices. Local tax rates are your effective state and local income tax rates.
The quick method many people use is simpler: Salary × Cost ratio. The calculator shows that figure too, labeled if the whole salary scaled, so you can see how far apart the two answers are.
A worked example
You earn $85,000 and spend $5,100 a month. The same life in the new city would cost $6,270, mainly because housing rises by $800 and childcare by $400 a month, while transportation falls by $200.
The new city costs +22.9% more, or $14,040 a year. Your yearly spending of $61,200 becomes $75,240, while the $23,800 that goes to taxes and savings stays the same.
The salary needed is $99,040, a raise of +16.5%. Scaling the whole salary by the cost ratio would have suggested $104,500.
Why the simple method overstates the raise
If prices are higher by +22.9%, it is tempting to ask for a raise of the same size. That would be right only if you spent every dollar of gross pay on local goods. In reality part of your salary goes to federal tax and to savings, and neither of those costs more because rent is higher.
How much the two methods differ depends on how much of your salary you spend:
| Share of salary spent | Salary needed | Simple method |
|---|---|---|
| 60% | $96,700 | $104,500 |
| 72.0% (from the costs) | $99,040 | $104,500 |
| 85% | $101,575 | $104,500 |
The more you save, the smaller the raise you need. The same logic works in reverse: moving somewhere cheaper, the simple method suggests you can accept a larger pay cut than you really can. With housing at $1,300, childcare at $700 and other costs at $550 in the new city, costs fall 17.3% and the salary needed is $74,440; the simple method would have said $70,333.
Where the difference usually comes from
Housing is normally the largest line and the one that varies most between places, so it decides most comparisons. Childcare comes next for families with young children, and it can vary as much as rent. Food, utilities and everyday spending tend to differ much less.
Transportation can move in either direction. A move from a car-dependent suburb to a city with good transit may remove a car payment, insurance and fuel; the reverse adds them. Count the whole cost of the car, not just fuel.
Taxes change the answer
State and local income taxes differ widely across the US, from none at all to rates of several percent. A raise is taxed before you can spend it, so a higher local tax increases the salary you need even if prices are the same.
| Local income tax | Salary needed |
|---|---|
| Same in both places | $99,040 |
| 0% now, 5% in the new city | $104,253 |
| 5% now, 0% in the new city | $94,790 |
Use effective rates, meaning the tax paid divided by salary, not the top bracket. Property tax and sales tax belong in housing and in everyday costs respectively.
What this calculator does not include
- Accuracy of the inputs. The result is only as good as the costs you enter. Guessing the new city’s rent from a single listing, or forgetting a cost such as parking or higher car insurance, changes the answer directly.
- Moving costs. Movers, deposits, a lease break and travel to find a home are one-off costs not counted here.
- Federal tax brackets. A higher salary can push part of your income into a higher federal bracket, so the true raise needed is slightly larger. Our salary after tax calculator shows the effect.
- Lifestyle changes. The comparison assumes you live the same way. Many people choose a smaller home or drop a car after a move; enter those choices as your new-city costs if you plan them.
- Future price changes. Rents and wages grow at different speeds in different places.