How is the cost of living index calculated?

The cost of living index compares the overall price level in a city to a national baseline of 100. A city at 130 is 30% more expensive than the national average; a city at 85 is 15% cheaper. The index blends housing, groceries, utilities, transportation, and healthcare, with housing carrying the largest weight. This comparison uses the index to adjust your current salary into an equivalent salary that maintains your purchasing power in each city.

What is an equivalent salary?

An equivalent salary is the amount you would need to earn in a target city to maintain the same standard of living you have now. It is calculated as your current salary multiplied by the target city's cost index divided by 100. If you earn $100,000 in a baseline city and move to a city with an index of 130, your equivalent salary is $130,000. Any raise above that amount increases your real purchasing power.

Why does rent burden matter when comparing cities?

Housing is the largest and least flexible household expense, so rent burden (annual rent as a percentage of salary) is a strong proxy for financial stress. A common guideline is to keep rent under 30% of gross income. Two cities with similar cost indexes can have very different rent burdens if one has high rents and low other costs and the other has the opposite. The comparison reports rent burden for each city so you can spot this.

What is disposable income and why is it the key metric?

Disposable income here is the equivalent salary minus annual rent — what is left to cover food, transportation, savings, and discretionary spending. It is the clearest single metric for comparing two cities because it accounts for both the salary adjustment and the largest expense. A city with a higher equivalent salary can still leave you with less disposable income if its rents are high enough.

Does this comparison account for taxes?

No — the cost of living index reflects prices, not taxes. State and local income taxes, property taxes, and sales taxes can differ significantly between cities and should be considered separately. For example, moving from a no-income-tax state like Texas to a high-tax state like California can reduce take-home pay by 5% to 10% on top of the cost of living difference. Use our tax calculators to model the tax impact.

How accurate are cost of living indices?

Cost of living indices from sources like the Bureau of Economic Analysis, C2ER, and Numbeo are reasonably accurate for broad comparisons but can miss neighborhood-level variation and lifestyle-specific costs. A national chain grocery basket may differ little between cities, while rent for a specific apartment type can vary by 200% across neighborhoods. Treat the index as a starting point and verify rent and major expenses for your specific situation before relocating.

Cost of Living Comparison: City vs City Calculator

A city vs city cost of living comparison tool is a free online tool that compares expenses between two cities. It shows housing, groceries, transportation, and the salary adjustment needed to maintain your lifestyle. Free, no sign-up required.

Cost of Living Inputs

Current Salary?Enter your current salary.

City A Cost Index?Enter your city a cost index.

City B Cost Index?Enter your city b cost index.

City A Monthly Rent?Enter your city a monthly rent.

City B Monthly Rent?Enter your city b monthly rent.

Cost index baseline is 100 (national average). Most U.S. cities range from 85 to 180.

End of inputs

City vs City Cost of Living

Metric	City A Cost index 100, rent $1,800.00/mo	City B Cost index 130, rent $2,800.00/mo
Equivalent Salary	$100,000.00	$130,000.00
Rent Burden	21.60%	25.85%
Disposable Income	$78,400.00	$96,400.00

City B leaves $18,000.00 more disposable income per year.

Key Insights

City A (index 100) requires an equivalent salary of $100,000.00 to match your current standard of living.

City B (index 130) requires $130,000.00.

Disposable income is the clearest metric: it accounts for both the salary adjustment and the largest expense (rent). The city with higher disposable income is the better financial choice.

Guide

How to Use This Calculator

1Enter your current salary — the baseline you want to maintain purchasing power against.
2Set City A's cost of living index (the baseline is 100; most U.S. cities range from 85 to 180).
3Set City B's cost of living index — the city you are considering moving to.
4Enter the annual rent in each city to compute rent burden and disposable income.
5Review the side-by-side comparison: equivalent salary, rent burden %, and disposable income for each city.
6Read the AI Insight panel for a personalized take on whether the target city's higher salary (or lower cost) actually leaves you better off.

Formula

How It's Calculated

EQUIVALENT SALARY:
  equivalentSalary = currentSalary × (cityCostIndex / 100)
  City A at index 100 → equivalentSalary = currentSalary (baseline)
  City B at index 130 → equivalentSalary = currentSalary × 1.30

RENT BURDEN:
  rentBurden = (cityRent × 12) / equivalentSalary
  A rent burden above 30% is considered cost-burdened; above 50% is
  severely cost-burdened.

DISPOSABLE INCOME:
  disposableIncome = equivalentSalary − (cityRent × 12)
  This is the salary left after housing — the clearest single metric
  for comparing real purchasing power across cities.

COMPARISON:
  The city with the higher disposable income wins. A higher equivalent
  salary does not always mean more disposable income: a city with a
  high cost index often pairs high salaries with even higher rents,
  leaving you worse off. Rent burden shows whether housing is
  sustainable at the equivalent salary.

Glossary

Key Terms

FAQ

Frequently Asked Questions

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