Cost of Living Calculator Formula

Understand the math behind the cost of living calculator. Each variable explained with a worked example.

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Formulas Used

Equivalent Salary Needed

needed_salary = current_salary * col_index_new / col_index_current

Salary Difference

salary_difference = current_salary * col_index_new / col_index_current - current_salary

Cost Increase/Decrease

pct_change = (col_index_new - col_index_current) / col_index_current * 100

Variables

VariableDescriptionDefault
current_salaryCurrent Salary(USD)70000
col_index_currentCurrent City COL Index100
col_index_newNew City COL Index130

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.

current_salary = 70000col_index_current = 100col_index_new = 130
  1. 01Ratio = 130 / 100 = 1.30
  2. 02Equivalent salary = $70,000 x 1.30 = $91,000
  3. 03You need $21,000 more to maintain the same lifestyle
  4. 04Cost increase = 30.0%

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