Cost of Living vs. Salary: Why $100K Means Very Different Things
A $100,000 salary in San Francisco is worth less than $60,000 in Austin. Here's how to compare salaries across cities and states correctly.
The Number That Lies
A job offer of $120,000 sounds great — until you realize it's in San Francisco, where a one-bedroom apartment averages $3,200/month and state income tax hits 9.3%. The same $120,000 in Nashville, where rent averages $1,600/month and there's no state income tax, is a fundamentally different financial reality.
Comparing salaries without adjusting for cost of living is like comparing distances in miles and kilometers without converting. The numbers look the same but mean something completely different.
The Most and Least Expensive States (2025)
| State | Cost of Living Index | $100K Equivalent |
|---|---|---|
| Hawaii | 142 | $70,400 |
| Washington D.C. | 145 | $69,000 |
| California | 138 | $72,500 |
| New York | 132 | $75,800 |
| Texas | 98 | $102,000 |
| Tennessee | 90 | $111,100 |
| Mississippi | 83 | $120,500 |
The Remote Work Arbitrage
The rise of remote work has created a powerful financial opportunity: earn a San Francisco salary while living in a low-cost state. A software engineer making $180,000 in San Francisco who moves to Boise, Idaho (cost of living index: 96) effectively gets a $60,000+ raise without changing jobs — purely from the cost of living difference.
This is why "geographic arbitrage" has become one of the most discussed personal finance strategies of the 2020s.
How to Evaluate a Job Offer Across Cities
When comparing offers in different locations, use this formula:
Adjusted Salary = Offered Salary × (Your Current COL Index ÷ New Location COL Index)
Example: You currently live in Austin (COL: 98) and receive an offer for $150,000 in Boston (COL: 125).
Adjusted value = $150,000 × (98 ÷ 125) = $117,600 in Austin-equivalent purchasing power.
Our salary checker automatically applies cost of living adjustments by state, so you always see an apples-to-apples comparison.
Beyond Rent: What Else Drives Cost of Living
Housing gets the most attention, but it's not the only factor:
- State income tax — ranges from 0% (Texas, Florida, Nevada) to 13.3% (California)
- Property taxes — New Jersey averages 2.2%; Hawaii averages 0.3%
- Groceries and utilities — can vary 20–40% between states
- Healthcare costs — employer plan quality varies significantly by region