A Job Offer in Two Cities: Comparing Real Take-Home After Cost of Living

A $110,000 offer in San Francisco looks like it beats an $85,000 offer in Austin by $25,000. It does not. After California’s income tax and its payroll deductions, the San Francisco job takes home about $79,151 a year against Austin’s $68,628, a nominal edge of $10,524. Divide each by what a dollar actually buys in that metro and the gap closes to nothing: about $68,470 of national-price buying power in San Francisco versus $69,957 in Austin. Austin is ahead. You can run your own city pair in the Cost of Living Calculator, but read this first so you know which number to trust.

That box is the whole argument. The salary you are offered is a sticker price. What you keep, and what that keeps buys, are two more subtractions the offer letter never shows. Do them in order and the ranking can flip.

Start with take-home, not the salary

The first subtraction is tax, and this is where Texas and California stop being comparable. Both offers pay the same federal income tax schedule and the same 7.65% FICA (6.2% Social Security plus 1.45% Medicare, per the SSA; neither salary reaches the $184,500 Social Security wage base, so the full rate applies to every dollar). After that they part ways.

On the $85,000 Austin salary, federal income tax runs $9,870 and FICA takes $6,503. Texas levies no state income tax at all (Texas Comptroller), so the state line is $0 and the take-home is $68,628. That keeps 80.7% of gross.

On the $110,000 San Francisco salary, federal tax is $15,370 and FICA is $8,415. Then California adds its own income tax, about $5,634 here (the calculator uses a simplified flat estimate for California and flags it; the exact progressive figure is close), plus a mandatory State Disability Insurance withholding of 1.3% of every dollar of wages with no cap (California EDD, 2026), another $1,430. Texas has no equivalent to either. Put those together and the take-home is $79,151, or 72.0% of gross.

So the higher salary keeps a smaller share. San Francisco nets $10,524 more in real dollars in your account, not $25,000. That is the first correction, and it is only half of it.

Then divide by what a dollar buys

Take-home tells you how many dollars you keep. It says nothing about what a dollar is worth where you spend it, and a dollar buys very different amounts of rent, groceries, and everything else in the two metros.

The clean, sourced way to measure that difference is the Bureau of Economic Analysis Regional Price Parity, or RPP. It sets the national average price level at 100 and reports each metro as a percentage of it. For 2024, the latest year published, the all-items RPP is 98.1 in Austin-Round Rock and 115.6 in San Francisco-Oakland-Berkeley (BEA, via FRED). Prices in Austin run about 1.9% below the national average, and prices in San Francisco run about 15.6% above it. California’s statewide RPP of 110.7 in 2024 was the highest of any state.

To convert take-home into buying power, divide by the price level: real take-home equals nominal take-home divided by (RPP divided by 100). Austin’s $68,628 divided by 0.981 is $69,957 in national dollars. San Francisco’s $79,151 divided by 1.156 is $68,470. The offer that looked $25,000 bigger buys less.

Read the bottom row, not the top one. San Francisco wins the gross salary and even wins the raw take-home. It loses everything that follows: a bigger tax bite, a smaller share of gross kept, a much higher price level, and less real buying power at the end.

The $25,000 raise that isn’t

Line the real numbers up and the story is stark. Before you even count California’s SDI, the two offers are within $250 of each other in buying power, essentially a tie. Count the SDI, which Texas has no version of, and San Francisco falls to about $68,470 against Austin’s $69,957. Austin leads by roughly $1,487.

You can state the same thing the other way. Express the San Francisco take-home in Austin’s price dollars by multiplying by (98.1 divided by 115.6), and $80,581 becomes about $68,382 of Austin spending power, below Austin’s actual $68,628. Either framing lands in the same place. A $25,000 nominal raise into a higher-tax, higher-cost metro is a real-terms pay cut.

One qualification: the San Francisco premium is concentrated in housing, and the all-items RPP averages housing in with everything else. California’s housing-rents price parity was 154.3 in 2024, far above its 115.6 all-items figure (BEA). A young renter spends a much larger share of income on housing than the all-items basket assumes, so for that person the gap is wider than the table shows. The Cost of Living Calculator uses a broader index that weights housing more heavily than the all-items RPP, which is why it shows an even larger gap between coastal metros and Texas. Both point the same direction.

The four-step method for any two offers

You can run this on any city pair, and it is always the same four steps. Do not skip to the last one.

1. Compute take-home in each city. Start from gross, subtract federal income tax (2026 brackets, $16,100 single standard deduction), subtract FICA at 7.65%, then subtract state income tax. That last line is $0 in Texas, Florida, and the other no-tax states, and progressive in California, plus California’s 1.3% SDI. The Cost of Living Calculator and the take-home tools do the first three lines for you.
2. Look up each metro’s price level. Use the BEA Regional Price Parity, national average equals 100. It is published by metro and by state.
3. Convert to real buying power. Real take-home equals nominal take-home divided by (RPP divided by 100). Now the two numbers are in the same currency of buying power.
4. Compare the real numbers, not the salaries. Or state offer B in offer A’s price dollars by multiplying by (RPP of A divided by RPP of B).

The caveat. These are estimates from published rates, not a promise about your paycheck. The BEA RPP is an all-items index built on average national spending weights and is published a year or two behind, so the 2024 figures are the best consistent basis, not a live price feed. The California income tax here is the calculator’s simplified flat estimate, and the exact 2026 progressive number may differ by a few dozen dollars without changing the conclusion. The comparison assumes a single filer taking the standard deduction, no 401(k) or HSA contributions, and no local income tax, which San Francisco does not levy on employees but some metros do (New York City, parts of Ohio and Pennsylvania). A pre-tax retirement contribution lowers taxable income in both cities and shifts the dollars but not the direction. And if you rent, get an actual rent quote in each city before you decide, because housing is where the coastal premium really lives.

Run your real offers through the Cost of Living Calculator, then keep reading. The pillar hub, money decisions and comparisons, collects the rest of these side-by-sides. If you want the take-home math on its own, how much of a $60,000 salary do you keep walks the paycheck line by line, and once you have picked the city, budgeting and everyday money turns the real number into a plan you can actually live on.