Tax Calculation Methodology

We apply each country's official income tax brackets, social security rates, and applicable deductions to calculate net (take-home) pay from gross salary. Our tax engine processes:

Progressive income tax brackets (federal, state, and local where applicable)
Mandatory social security contributions (employee and employer portions)
National insurance and pension contributions
Standard deductions and personal allowances
Tax credits and personal allowances

Official Tax Data Sources by Country

We source tax rates directly from government authorities:

United States: IRS Tax Brackets – Federal income tax rates and standard deductions

United Kingdom: HMRC – UK income tax rates, National Insurance contributions

Germany: Bundesfinanzministerium – German federal tax rates and social security

France: impots.gouv.fr – French income tax scales and social contributions

OECD Countries: OECD Taxing Wages – Comparative tax data for 38 OECD member countries

Update frequency: Tax rates are updated when governments publish new fiscal year rates. All 48 supported countries are reviewed for each fiscal year and when major tax law changes are enacted.

Cost of Living Data

Instead of relying on a single data provider, we combine cost-of-living indices from multiple independent sources into a composite index. This reduces the bias inherent in any single dataset and produces more accurate city-level comparisons.

Data Sources

Three independent providers, plus one index we compute ourselves from their published prices:

Numbeo

The world's largest cost-of-living database — 9.9 million prices across 12,860 cities from 886,000 contributors, with manually collected figures weighted above user submissions. It is the base source for all 558 cities here, and the only one for those outside the composite.

Expatistan

Peer-to-peer cost comparison tool used by expats. Present for 121 of the cities in the composite.

LivingCost.org

Independent cost-of-living database. The narrowest of our sources: present for 34 cities, so most composites are built without it.

SIM Price Index

Not a fourth data provider: our own recomputation, pricing one fixed monthly basket for a single professional using the item-level prices published by Numbeo and Expatistan. It gives a second reading of the same underlying prices under a basket we define, and covers 120 cities.

How the Composite Index Works

For each city we collect the cost-of-living index from up to four sources — Numbeo, Expatistan, LivingCost and our own SIM index — and compute a trimmed composite:

Collect the available indices for the city (2 to 4 sources; 117 of the 127 have at least three).
Outlier trimming: if 3+ sources exist and one deviates by more than 10% from the leave-one-out average, it is dropped.
Average the remaining values to produce the final composite index.

All indices are normalized to the same scale (New York City = 100) before merging.

Coverage: 127 of the 558 cities on the site have enough independent sources for a composite. Everywhere else — and for every sub-index — the figure is Numbeo's, unblended. The number of sources behind a city is shown on its own page, so you can see which kind of number you are looking at.

Sub-indices (Rent, Groceries, Restaurants, Purchasing Power) remain sourced from Numbeo only, as we do not yet have multi-source data for individual spending categories.

Categories Covered

Housing

• Rent (1-bedroom, 3-bedroom, city center vs. suburbs)
• Utilities (electricity, water, gas, internet)

Food & Groceries

• Supermarket staples (milk, bread, eggs, meat)
• Fresh produce (fruits, vegetables)
• Dining out (restaurants, cafes, fast food)

Transportation

• Public transit (monthly pass, single ticket)
• Taxi/ride-sharing
• Gasoline prices

Entertainment & Lifestyle

• Gym memberships
• Movie tickets, entertainment
• Clothing, personal care

Update frequency: Cost-of-living data is refreshed periodically from all sources. When a source publishes updated indices, they are merged into the composite within the next data update cycle.

Currency Conversion

Exchange rates come from FloatRates, which publishes mid-market rates sourced from central bank feeds. Mid-market is the midpoint between buy and sell prices, so the conversion carries no spread of ours.

Update frequency: Rates are refreshed periodically rather than in real time — the date of the set in use is shown alongside cross-currency results, so you can always see how current it is
Rate type: Mid-market spot rates (not bank transfer rates)
Coverage: 147 currencies

Important note: We use mid-market rates. Actual transfer rates may differ due to bank fees, spreads, and transfer service charges. For large transfers, consult a foreign exchange specialist.

Step-by-Step Calculation Process

When you enter a salary comparison, here's exactly what happens behind the scenes:

1

Input: You enter your gross annual salary and select your origin and destination cities (e.g., "$80,000 in New York" vs "London")
2

Origin tax calculation: System applies US federal tax brackets, state tax (NY), FICA (Social Security + Medicare), and standard deduction to calculate your net (take-home) salary
3

Destination tax calculation: System applies UK income tax brackets and National Insurance to calculate net salary in London
4

Currency conversion: If countries use different currencies (USD vs GBP), we apply mid-market exchange rates to normalize the comparison — the date of the rate set is shown with the result
5

Cost of living adjustment: We apply the city's cost of living index — the trimmed composite where the city has one, Numbeo's otherwise — to show purchasing power. If London is 15% more expensive than NYC, we adjust the comparison accordingly
6

Results display: You see net salary comparison, purchasing power difference, detailed tax breakdown, and category-by-category cost of living breakdown

Data Limitations & Disclaimers

While we strive for accuracy, our calculations have inherent limitations:

Tax Calculation Limitations

Standard employment only: Calculations assume W-2 employment (US) or PAYE (UK). Self-employed, contractor, and freelance tax situations are not supported
Standard deductions: We use standard deductions. Itemized deductions (mortgage interest, charitable donations, medical expenses) are not calculated
Simplified scenarios: We assume single filer with no dependents unless otherwise specified. Married filing jointly, head of household, and dependent credits require manual adjustment
Regional tax coverage: US state taxes are included for major states, but some local city taxes and Canadian provincial variations may not be fully captured

Cost of Living Limitations

City-wide averages: Data represents city averages. Neighborhoods within cities vary significantly (Manhattan vs. Brooklyn, Central London vs. Outer London)
Lifestyle assumptions: Calculations assume moderate lifestyle. Luxury vs. budget living can differ by 50%+ from averages
Crowdsourced data quality: Numbeo data is user-contributed. Quality varies by city (major cities have more data points, smaller cities may have limited samples)

Currency & Timing

Exchange rate volatility: Currency rates fluctuate daily. Results are point-in-time estimates, not long-term guarantees
Transfer fees not included: Actual money transfer involves fees (wire fees, FX spreads) which can reduce effective exchange rates by 1-5%

Professional Advice Recommended

ShouldIMove provides estimates for informational purposes. Always consult a qualified tax professional or financial advisor before making binding financial decisions. Individual circumstances can significantly affect actual tax liability and cost of living.

Methodology Review & Updates

This page was last reviewed in August 2026. Tax rates reflect the 2026 brackets for all supported countries. It is updated when new fiscal year rates are published or when major tax law changes occur.

To report data errors or suggest methodology improvements, contact us at hello@shouldimove.co.