Purchasing Power Parity (PPP) Calculator
Compare salaries and cost of living between countries. Find out how much you need to earn abroad to maintain your current lifestyle.
Location & Salary
To maintain the same standard of living in United States, you would need:
Equivalent Salary Across Major Economies
* Green indicates your source country, Blue indicates your target country.
What this means
A salary of ₹10,00,000 in India buys you the same amount of goods and services (rent, food, healthcare, etc.) as $42,553 would buy in United States.
Note: This calculator uses Purchasing Power Parity (PPP) conversion factors, which compare the cost of living. It does not use the nominal currency exchange rates you see on Google or at the bank.
Understanding Purchasing Power Parity (PPP)
When comparing salaries across different countries, simply converting the currency using the current market exchange rate is highly misleading. This is because the cost of living—rent, groceries, healthcare, and services—varies drastically between nations.
The "Basket of Goods"
PPP solves this by comparing how much it costs to buy a standard "basket of goods" in different countries. If a basket of groceries costs $100 in the US, and the exact same basket costs ₹2,350 in India, the PPP exchange rate for those groceries is $1 = ₹23.5 (even if the bank exchange rate is $1 = ₹83).
Why is PPP important for expats?
If you are offered a job in the US with a salary of $100,000, and you currently earn ₹20 Lakhs in India, you might think you are getting a massive raise (since $100k is ~₹83 Lakhs).
However, because everything from rent to haircuts is more expensive in the US, your purchasing power might actually decrease. Using PPP helps you negotiate a salary that truly matches or exceeds your current standard of living.
Frequently Asked Questions
What is Purchasing Power Parity (PPP)?
Purchasing Power Parity (PPP) is an economic theory that compares different countries' currencies through a 'basket of goods' approach. It tells you how much money would be needed to buy the same goods and services in two different countries.
Why use PPP instead of nominal exchange rates?
Nominal exchange rates fluctuate daily based on financial markets and don't reflect the actual cost of living. PPP accounts for the fact that non-tradable goods (like haircuts, rent, and local food) are usually much cheaper in developing countries. PPP gives a more accurate picture of your actual standard of living.
How should I use this calculator for salary negotiation?
If you are relocating to another country, you can use this calculator to find the 'equivalent' salary that maintains your current lifestyle. For example, if you earn ₹10 Lakhs in India, you need a specific amount in USD to buy the same goods and services in the US, which is often much lower than what the nominal exchange rate suggests.
Where does this PPP data come from?
The PPP conversion factors used in this calculator are based on approximate data provided by the World Bank and the OECD. These factors are periodically updated based on comprehensive international price surveys.