About Tech Cities Index
I wanted to find out where I have the best purchasing power as a software engineer around the world. This website combines data from multiple reliable sources to help tech professionals make informed decisions about their next career move.
Data Sources
- Salary Data: Sourced from levels.fyi, providing median compensation data for software engineering roles across different cities
- Cost of Living: Based on Numbeo's Cost of Living Including Rent Index, providing standardized city-to-city cost comparisons including housing expenses
- Tax Rates: Calculated effective tax rates based on median software engineering income levels, including all mandatory contributions and social security
Methodology
Our core metric is the local purchasing power ratio, which tells you how far your software engineering salary will actually go in each city. Here's how we calculate it:
- 1. Get the median total compensation for software engineers in each city
- 2. Apply local tax rates to calculate take-home pay (net salary)
- 3. Factor in local costs using Numbeo's comprehensive Cost of Living Index
- 4. Calculate the purchasing power ratio:
Net Salary / Cost of Living Index
This ratio represents your real spending power. A higher ratio means your salary goes further in that city.
When comparing cities, we normalize these ratios relative to your selected base city (set to 100) to make the comparisons more intuitive. This helps you easily see which cities offer the best financial opportunity when accounting for both salary and living costs.
Why This Matters
Raw salary numbers can be misleading. A $150,000 salary in San Francisco might provide a lower standard of living than a $100,000 salary in Austin due to differences in taxes and living costs. Our purchasing power ratio helps you make apples-to-apples comparisons between cities, considering:
- Housing costs (often 30-50% of expenses)
- Local tax burden
- Daily expenses (food, transport, utilities)
- Lifestyle costs (entertainment, dining, etc.)