What is the Cost of Living Comparison?
Comparing salaries across cities requires weighting each cost category by how much of your budget it consumes. Housing dominates — typically 25–40% of spending — so a city with 45% higher rent but similar food costs is nowhere near 45% more expensive overall.
Tax differences matter just as much: a 20% raise moving from a no-income-tax state to a high-tax one can leave you worse off.
Formula & worked example
Salary needed = Current × (1 + blended) × (1 + tax difference)
Worked example: $80,000 salary moving somewhere with 45% higher housing and 12% higher other costs, where housing is 32% of your budget. The blended increase is 0.32 × 45% + 0.68 × 12% = 22.6%, so you need about $98,048 — not the $116,000 the housing figure alone would suggest.
How to use this cost of living comparison calculator
- Enter your current salary.
- Enter the housing cost difference — usually the biggest single factor.
- Enter other costs (food, transport, utilities) separately.
- Set housing as a share of your budget; 30% is typical, higher in expensive cities.
Smart tips
- Housing weighting matters enormously. If you rent a room rather than a flat, a high-rent city hurts far less.
- Include tax differences — moving between a no-income-tax and a high-tax jurisdiction can swing 5–10% of gross.
- Factor commuting: a cheaper suburb with a two-hour commute has real time and transport costs.
- One-off relocation costs (deposit, moving, furniture) often equal 1–3 months of salary.
- Ask about employer relocation assistance; many companies cover a substantial share.
Frequently asked questions
How do I compare salaries between cities?
Weight each cost category by its share of your budget. Housing dominates, so weight it heavily, then adjust for tax differences.
What percentage of income should go to housing?
The common guideline is 30% or less, though in expensive cities 40%+ is unfortunately normal.
Should I include taxes in the comparison?
Absolutely. State, provincial or national tax differences can easily exceed the cost-of-living gap.
What else should I consider beyond cost?
Career opportunities, commute time, healthcare access, and proximity to family often outweigh a modest cost difference.
Want the theory behind the numbers? Read our relocation guides on the Money Blog.
Written by Gurjeet Singh, Sharpen Solutions. Last reviewed 8 Sep 2026. How we check these numbers.