Cost of Living Calculator Formula
Understand the math behind the cost of living calculator. Each variable explained with a worked example.
Formulas Used
Equivalent Salary Needed
needed_salary = current_salary * col_index_new / col_index_currentSalary Difference
salary_difference = current_salary * col_index_new / col_index_current - current_salaryCost Increase/Decrease
pct_change = (col_index_new - col_index_current) / col_index_current * 100Variables
| Variable | Description | Default |
|---|---|---|
current_salary | Current Salary(USD) | 70000 |
col_index_current | Current City COL Index | 100 |
col_index_new | New City COL Index | 130 |
How It Works
How Cost of Living Adjustments Work
Cost of living indexes compare the relative expense of different cities. Scale your salary proportionally to maintain the same purchasing power.
Formula
Equivalent Salary = Current Salary x (New City Index / Current City Index)
An index of 100 is the national average. Higher means more expensive.
Worked Example
You earn $70,000 in a city with COL index 100 and are moving to a city with index 130.
- 01Ratio = 130 / 100 = 1.30
- 02Equivalent salary = $70,000 x 1.30 = $91,000
- 03You need $21,000 more to maintain the same lifestyle
- 04Cost increase = 30.0%
Frequently Asked Questions
What does a cost of living index measure?
It measures the relative price of goods, housing, transportation, and services in different areas. An index of 100 represents the national average.
Where do I find COL index numbers?
The Bureau of Economic Analysis, Numbeo, and various salary research sites publish cost of living indexes for cities and regions.
Is housing the biggest factor?
Yes, housing typically accounts for the largest portion of cost-of-living differences between cities, often 30-40% of the total index.
Ready to run the numbers?
Open Cost of Living Calculator