A $75,000 salary feels very different in Mississippi than in Manhattan. Housing, taxes, groceries, and healthcare vary enormously across states – so much that a pay cut to move can actually raise your standard of living. Here’s how cost of living differs by state and how to compare offers across state lines.
Comparing two job offers in different states? Our salary calculator helps you break any salary into comparable hourly and monthly figures first.
How Cost of Living Is Measured
The Bureau of Economic Analysis publishes Regional Price Parities (RPPs) – an index where 100 equals the national average price level. A state at 113 is roughly 13% more expensive than average; a state at 87 is roughly 13% cheaper. The index covers housing, goods, and services.
Housing is the biggest driver: it can be 2-3× more expensive in coastal metros than in the rural South or Midwest, while groceries and healthcare vary less dramatically.
The 10 Most Expensive States
Based on BEA Regional Price Parities (all-items index, approximate):
| Rank | State | Approx. price level |
|---|---|---|
| 1 | Hawaii | ~113 |
| 2 | District of Columbia | ~112 |
| 3 | California | ~111 |
| 4 | New York | ~110 |
| 5 | New Jersey | ~109 |
| 6 | Massachusetts | ~108 |
| 7 | Connecticut | ~106 |
| 8 | Maryland | ~105 |
| 9 | Alaska | ~104 |
| 10 | Washington | ~103 |
Hawaii tops every list: nearly everything is shipped in, and median home prices run several multiples of the national median.
The 10 Least Expensive States
| Rank | State | Approx. price level |
|---|---|---|
| 1 | Mississippi | ~87 |
| 2 | Arkansas | ~88 |
| 3 | Alabama | ~89 |
| 4 | Oklahoma | ~89 |
| 5 | West Virginia | ~90 |
| 6 | Kansas | ~90 |
| 7 | Missouri | ~90 |
| 8 | Iowa | ~91 |
| 9 | Indiana | ~91 |
| 10 | Tennessee | ~91 |
In Mississippi, housing costs run roughly 25-30% below the national average – the main reason it anchors the bottom of every ranking.
What $75,000 Buys in Different States
Adjusting $75,000 by approximate price levels:
| State | $75,000 feels like |
|---|---|
| Hawaii (~113) | ~$66,400 in purchasing power |
| California (~111) | ~$67,600 |
| National average (100) | $75,000 |
| Texas (~97) | ~$77,300 |
| Tennessee (~91) | ~$82,400 |
| Mississippi (~87) | ~$86,200 |
A $75,000 salary in Mississippi buys roughly what a $97,000 salary buys in Hawaii – before taxes.
Don't Forget State Income Taxes
Cost of living isn’t just prices. Nine states levy no individual income tax on wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Meanwhile, California’s top marginal rate exceeds 12% and New York City residents pay city tax on top of state tax.
Example: a $100,000 earner in Texas keeps roughly $5,000-$8,000 more per year than the same earner in California, purely from state income tax differences – and Texas housing costs less too.
How to Compare Offers Across States
- Convert to hourly for apples-to-apples math ($100,000 ÷ 2,080 = $48.08/hr).
- Adjust for price level: divide by the state’s RPP index ratio (e.g., offer × 100 ÷ 111 for California).
- Subtract state tax differences using each state’s effective rate at your income.
- Price housing specifically – check actual rents/home prices in the neighborhoods you’d live in, since state averages hide huge metro variation.
Frequently Asked Questions
What is the cheapest state to live in?
Mississippi consistently ranks lowest on the BEA’s Regional Price Parity index, driven mainly by low housing costs.
What is the most expensive state to live in?
Hawaii, by a wide margin – its price level runs roughly 13% above the national average, with housing far above that.
Which states have no income tax?
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming have no tax on wage income.
Should I take a lower salary in a cheaper state?
Often yes. A 15% pay cut moving from California to Tennessee can still raise your disposable income once housing and taxes are factored in – run both offers through the math above.
Does cost of living affect remote workers?
Yes. Many employers now adjust remote pay by location, and even without adjustment, choosing a low-cost state stretches a national salary dramatically.
How much salary do I need to live comfortably in an expensive state?
A common rule: multiply your current comfortable salary by the ratio of price levels. Comfortable on $60,000 in Tennessee (~91)? You’d need roughly $60,000 × 111/91 ≈ $73,200 in California (~111) for equivalent purchasing power – before state tax differences. Plug both figures into our salary calculator to compare them side by side in hourly and monthly terms.
*Figures are approximate, based on BEA Regional Price Parities and widely reported state tax data. Local costs vary within states.*
