Compare the raise after expenses, not before
A job offer is usually quoted as gross annual compensation. Rent arrives monthly, as do utilities, commuting, groceries and other costs. Converting both sides to the same period is the first step. Subtract your own realistic effective-tax percentage from both salaries, then compare housing and other expenses in each city.
A worked example, deliberately hypothetical
Imagine your current salary is $80,000 and a new employer offers $98,000. If the current combined effective tax assumption is 25% and the new one is 27%, the planning monthly take-home amounts are $5,000 and approximately $5,962. The $962 increase sounds good. But if monthly housing plus other expenses rises by $1,200, the move actually reduces monthly room in the budget by about $238. These invented inputs illustrate the formula, not actual wages or rents in any particular city.
A three-scenario stress test
- Best case: your signed housing estimate is accurate, and other expenses remain flat.
- Central case: use the rent you are realistically likely to sign and the commute you will actually face.
- Conservative case: increase rent and total recurring costs, lower the bonus you can rely on, and add a moving contingency.
When a lower salary can still be a better decision
Moving in the opposite direction can also pay off. A smaller gross salary may be a good financial choice if housing and recurring costs drop enough. But the comparison is incomplete unless you check health insurance, transport, school or childcare costs, and how long you expect to remain in the new job.
What to do next
Enter both offers and all expenses in the salary-after-rent calculator. Check the salary threshold for your intended planning horizon, then confirm every input against real pay, lease and insurance documents.