How two offers are compared
Each offer goes through the full paycheck calculation in its own state: federal income tax, Social Security, Medicare, state income tax and any state payroll levy. That gives take-home pay for the year. Then each figure is divided by its area's price level from the Bureau of Economic Analysis, so both are stated in what the money buys at average U.S. prices. The higher adjusted figure is the better offer on pay alone.
The price level can be the state's or a metro area's. Prices inside a state vary a lot: a metro index is the better guide when you know where you would live. The data year is 2024, the latest the bureau has published.
Worked examples
| Offer | Salary | Take-home | Price level | At U.S. prices |
|---|---|---|---|---|
| Texas | $75,000 | $61,592 | 97.1 | $63,460 |
| California | $90,000 | $66,268 | 110.7 | $59,852 |
| Florida | $80,000 | $65,110 | 103.4 | $62,960 |
| New York | $100,000 | $73,842 | 107.9 | $68,422 |
| Ohio | $65,000 | $52,826 | 92.8 | $56,941 |
| Illinois | $75,000 | $57,880 | 100.0 | $57,904 |
In the first pair the $15,000 higher salary in California buys less once tax and prices are counted, and Texas comes out ahead by $3,608 a year. Between Florida and New York the better offer is New York, by $5,462. Between Ohio and Illinois it is Illinois, by $963. None of these is a rule: run your own numbers, because the answer turns on the exact salaries and places.
What price indexes leave out
An index is an average basket. Your own costs can differ: a renter feels housing prices more than an owner with a fixed mortgage, and someone who drives a lot feels fuel prices more. Commuting time, a partner's job, schools and the chance of a raise matter too, and no index measures them. Use the adjusted figure as one input, not the decision.
Negotiating with the numbers
The comparison gives you a concrete figure to ask for. Find the salary in the second state that makes its adjusted take-home pay equal to your current job's; anything above that is a real raise, and anything below it is a pay cut however the gross looks. Say an employer in a high-cost metro offers a raise that sounds large: if the adjusted figure barely moves, you have a clear, polite reason to ask for more, or for a relocation package that covers the first year's gap.
Remote offers deserve the same treatment. A company may pay by location band, so the same job pays differently depending on where you live. Run both locations through the calculator to see whether moving is worth it once tax and prices are counted.
What the inputs mean
- Salary for each offer: base pay a year. Add a bonus if it is promised in writing.
- State for each offer: where the job is and you would live; tax is worked out for living and working there.
- Price level: the state's index, or pick a metro area inside it.
- Filing status: the same for both offers.
Common mistakes
- Comparing gross salaries. State tax alone can move the answer by thousands of dollars a year.
- Assuming a no-income-tax state always wins. Higher prices or property tax can cancel the saving.
- Ignoring local income taxes, which apply in cities such as New York City and Philadelphia; the paycheck calculator includes them.
Job offer questions
How much more do I need to earn to move to a more expensive state?
Enough to cover both the tax and the price gap. On $75,000 in Texas you keep $61,592 a year. A $90,000 offer in California keeps $66,268, but California's prices are higher, so at national prices it is worth $59,852 against $63,460. Raise the California salary in the calculator until the two adjusted figures match.
What are Regional Price Parities?
A U.S. Bureau of Economic Analysis index of price levels by state and metro area, with the national average set to 100. It covers rent, goods and services together. For 2024, California is 110.7 and Texas 97.1.
Does the comparison include benefits?
No. Compare health premiums, retirement matches and paid leave separately; a generous match can be worth more than a few thousand dollars of salary. Enter premiums and 401(k) amounts in the paycheck calculator for each offer if you want them in the take-home figure.
Sources
Rules checked . How we calculate.