Income Parity Calculator

Compare two incomes side by side, or find the salary that keeps your purchasing power when you move. Income ratio mode divides one income by another and shows the parity ratio, the parity percentage, and the dollar gap. Relocation parity mode takes your current salary and two cost-of-living indexes and tells you the salary you would need in the new city, plus the raise required to get there.

What is income parity?

Income parity means two incomes have equal purchasing weight. The basic income parity ratio is simple: divide the first income by the second. A ratio of 1.00 is perfect parity, above 1.00 means the first income is higher, and below 1.00 means it is lower. Multiply by 100 and you get the parity percentage: a ratio of 0.80 means the first income is 80% of the second, a 20% gap.

This ratio is used to compare salaries across jobs, partners in a household, or wage levels between regions. It is a fairness lens, not a verdict: a lower ratio flags a gap worth investigating, not proof of unfair pay.

Income parity worked example

Ratio mode: you earn $60,000 per year and a colleague earns $75,000. Income parity ratio = 60,000 ÷ 75,000 = 0.8000. Parity percentage = 80.0%. Annualized gap = $15,000.00. Interpretation: your income is 80% of the comparison income. Verified against the tool above.

Relocation mode: you earn $72,000 where the cost-of-living index is 100, and you are considering a city indexed at 130. Parity income = 72,000 × (130 ÷ 100) = $93,600.00. Raise needed = $21,600.00. A $72k offer in the new city would buy about 23% less than your current life. Verified against the tool above.

How the relocation parity formula works

Parity income = Current income × (Target COL index ÷ Current COL index). Cost-of-living indexes from sources like the Council for Community and Economic Research (C2ER) or Numbeo use 100 as a baseline, so an index of 130 means roughly 30% higher costs. The formula scales your salary by that cost ratio. It does not adjust for taxes, which can shift take-home pay substantially between states or countries, so treat the result as a starting point for negotiation, not a final budget.

What competing calculators miss

Most income parity calculators do exactly one division and stop: they show the ratio but not the parity percentage, the dollar gap, or what to do with the answer. Others only serve relocations and cannot compare two salaries at all. This page does both jobs in one tool: the ratio mode normalizes annual, monthly, and hourly pay before comparing (so a $65,000 salary and a $31.25/hour wage compare correctly), and the relocation mode computes both the parity salary and the raise needed to reach it.

Frequently asked questions

What is a good income parity ratio?

1.00 is perfect parity. In pay-fairness analysis, ratios between 0.95 and 1.05 are usually treated as roughly equal; persistent gaps below 0.90 are the ones analysts investigate.

How do I compare an hourly wage with an annual salary?

Annualize first: hourly wage × 2,080 hours (40 hours × 52 weeks) or monthly pay × 12, then divide. The ratio mode above does this automatically when you set each income's period.

What cost-of-living index should I use?

Use one consistent source for both cities, such as C2ER's COLI or Numbeo, with 100 as the baseline. Mixing sources mixes methodologies and the ratio will mislead.

Does income parity account for taxes?

The ratio mode compares gross figures as entered, and the relocation mode adjusts for cost of living only. For a true take-home comparison, run both salaries through a tax estimate first.

Is income parity the same as purchasing power parity?

Related but different. Purchasing power parity compares what currencies buy across countries using baskets of goods; income parity compares two income figures directly as a ratio.

Can income parity be over 100%?

Yes. A ratio of 1.25 is 125% parity: the first income is 25% higher than the comparison income.