Geo-Arbitrage Relocation Calculator
Quantify the real financial impact of relocating to a cheaper city while keeping a remote job: disposable income change, relocation payback period, and your salary's true purchasing power.
Enter both salaries and all money amounts in one currency. Results are before tax; the index does not estimate rent, visas, healthcare or a local salary. Use your own current budget and consistent indices.
When to use this tool:
- Decide whether to relocate for a remote job
- Compare disposable income across two cities
- Estimate how fast a move pays for itself
How it's Calculated
- Target Living Cost = Current Living Cost × (Target Index ÷ Current Index) — your spending rescaled to the cheaper city.
- Disposable Income Change = (Target Salary − Target Living Cost) − (Current Salary − Current Living Cost).
- Payback = One-Time Relocation Cost ÷ Monthly Disposable Gain.
- Real Income = Target Salary × (Current Index ÷ Target Index), i.e. what your new pay is worth at your old city's price level.
Key Assumptions
Defaults are example inputs. See methodology and corrections for how to check results, or report an issue.
- Cost-of-living indices are relative numbers (e.g. Numbeo or your own basket) where a higher value means a more expensive city.
- Living costs are assumed to scale roughly with the index ratio; one-off luxuries and fixed debts are not rescaled.
- If your remote employer cuts pay for the cheaper location, enter that lower figure as the salary after the move.
Actionable Insights
- The biggest geo-arbitrage wins come from holding a high-cost-city salary while paying low-cost-city prices — disposable income, not headline salary, is what actually grows.
- A pay cut can still be worth it: dropping 15% salary to move somewhere 35% cheaper usually leaves you with more money in your pocket each month.
- Watch the payback period — high moving, deposit, and furnishing costs can take a year or more to recoup, so a short planned stay can wipe out the gain.
Frequently Asked Questions
Numbeo, Expatistan, and many salary sites publish city indices. Any consistent source works as long as you use the same scale for both cities — what matters is the ratio between them, not the absolute number.
Add up what you actually spend in a year on rent, food, transport, utilities and discretionary items. Exclude savings and one-off purchases for the cleanest comparison.
Often yes. Enter the reduced salary as 'Salary After Move'. If the city is cheaper by a larger percentage than the pay cut, your disposable income still rises.
That happens when the move does not increase your monthly disposable income, so there is nothing to recoup the relocation cost. Financially, the move does not pay for itself.
It translates your post-move salary back into the price level of your current city, so you can compare like-for-like. If it is higher than your current salary, your purchasing power improved.
Not directly. If moving changes your tax jurisdiction, adjust the salary figures to net-of-tax amounts, or treat the tax difference as part of your living cost.
Use the calculator's currency selector and convert both salary and living costs into the same currency first, so the index ratio is the only thing driving the comparison.
Worked example: a hypothetical relocation
Assume annual salary stays $70,000, current spending is $45,000 and user-supplied indices are 125 and 75. Modeled destination spending is $27,000, a reduction of $18,000. At $6,000 relocation cost, the modeled payback is four months.
These are invented scenario inputs, not verified city data. The difference is before tax; it is not spendable income until taxes and omitted costs are accounted for. A lower index does not imply permission to work in a country or that your employer will retain your salary.
A pay cut with a long payback
With salary falling from $150,000 to $120,000, spending of $90,000 and an index ratio of 65 / 100, modeled destination spending is $58,500. The annual difference improves by only $1,500. A $10,000 move takes 80 months to recover under those assumptions.
Test housing separately, use consistent same-period indices and compare actual after-tax budgets before treating either scenario as a practical option.