Cost of Living · Updated June 2026
Cost of living salary adjustment formula
The formula itself is one line: Adjusted salary = current salary × (destination index ÷ origin index). Everything interesting lives in the inputs – which index, whose weights, and what the result does and doesn't cover.
Worked example: $120,000 in Austin (index 63) moving to San Francisco (93): 120,000 × 93/63 = $177,100. That's the purchasing-power-neutral figure – anything less is a real pay cut wearing a bigger number.
Cost of living calculator
Equivalent salary
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- Budget A
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- Budget B
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- Rent share of pay A
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- Rent share of pay B
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Line-by-line, monthly
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Composite 2026 index incl. centre rent (NYC = 100). Salary figures are gross – taxes not included; pair with the salary after tax calculator.
Key insights
Key insights
- Adjusted salary = salary × (destination ÷ origin index).
- Divide indexes; never subtract points.
- Renters need rent-inclusive indexes – always.
- Gross formula + tax solve = decision-grade number.
- Corporate asymmetric caps are policy, not arithmetic.
| City | COL index | Single budget /mo | Avg net salary /mo | Power ratio |
|---|---|---|---|---|
| New York City | 100 | $5,759 | $7,200 | 1.25 |
| San Francisco | 93 | $4,954 | $8,200 | 1.66 |
| Austin | 63 | $2,825 | $6,000 | 2.12 |
| Chicago | 68 | $3,322 | $5,800 | 1.75 |
| Miami | 73 | $3,718 | $5,200 | 1.40 |
| London | 79 | $3,980 | $4,400 | 1.11 |
| Berlin | 56 | $2,526 | $3,300 | 1.31 |
| Lisbon | 50 | $2,126 | $1,700 | 0.80 |
Derivation and common errors
The formula holds a consumption basket constant: if a basket costs I_a in city A and I_b in city B, equal affordability requires salary × (I_b/I_a). Three frequent errors: subtracting index points instead of dividing; using ex-rent indexes for renters; and applying the gross result to net-pay decisions.
Reverse application (expensive → cheap) is symmetric: $177,100 in SF maps back to $120,000 in Austin. Corporate policies often break this symmetry – full cuts down, capped raises up – which is a policy choice, not math.
Adding the tax term
For decisions, extend the formula: target net = current net × (I_b/I_a), then solve for the destination gross that produces it under the destination's tax schedule. Between US states this correction moves answers by up to ~9%; across countries, far more.
MovingCal's salary after tax calculator does the solve numerically for every covered state and country.
FAQ
Frequently asked questions
What is the cost of living adjustment formula?
Adjusted salary = current salary × (destination index ÷ origin index), using a consistent rent-inclusive index pair. With NYC = 100: $90k at index 60 → $90k × 100/60 = $150k NYC-equivalent.
Why is subtracting index points wrong?
Indexes are ratio scales. A 30-point gap means +50% from base 60 but +33% from base 90. Subtraction treats both as equal and misprices the adjustment.
How do taxes enter the formula?
Convert at the net level: target net = current net × index ratio, then gross up under destination tax rules. Skipping this overstates what high-tax destinations deliver.
Does the formula work internationally?
Yes, with USD-normalised indexes (as here) and destination-country tax grossing. FX adds noise for cross-currency earners – revisit after big moves.
What adjustment should I ask for in negotiation?
Open with the full ratio figure and credible index data; settle no lower than ~70–80% of it plus one-time relocation cash, or the move cuts your real income.
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Plan the whole move, not just one number.
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