$120K in Los Angeles vs. Austin: What Salary Do You Need in Austin to Keep the Same Take-Home Pay and Purchasing Power?

You're a $120K earner in Los Angeles. A recruiter in Austin offers you $105K and says, "The cost of living is lower, so you'll come out ahead." Or your current employer says you can move to Austin and keep your pay. Or the offer is $120K flat, and you wonder whether that's a raise, a wash, or a quiet pay cut.

Answering that takes one number: the salary you would need in Austin to have the same real income you have now. This post builds that number step by step, and you can swap in your own inputs at each step.

One note on method. I don't have a proprietary dataset behind this post, so every dollar figure below is a worked example built from stated assumptions. The federal and state tax figures are rounded estimates for a single filer taking the standard deduction. The cost index is a placeholder that you should replace with the BLS regional price parity (RPP) figures for your two metros. The framework is the useful part. The exact outputs will move with your inputs.

Step 1: Start with take-home pay, not salary

Salary is what the offer letter says. Take-home pay is what lands in your account. State income tax alone can change take-home by thousands of dollars, which is why comparing gross salaries across states misleads.

Example assumptions (single filer, $120K gross, standard deduction, rounded):

Line item	Los Angeles (CA)	Austin (TX)
Gross salary	$120,000	$120,000
Federal income tax (approx.)	$17,600	$17,600
Social Security + Medicare (7.65%)	$9,180	$9,180
State income tax (approx.)	$6,800	$0
CA state disability insurance (approx.)	$1,500	$0
Estimated take-home	$84,900	$93,200

Same gross, and Austin nets about $8,300 more per year, roughly $690 a month. Nothing about housing or groceries has entered the picture yet. This is the "Will I take home more or less money after I move?" question, answered before you look at a single rent listing.

The catch is that Texas doesn't skip the bill, it moves it. Texas has no wage income tax but leans on property and sales taxes. Renters feel this indirectly through their landlord's tax bill. Owners feel it directly. We'll get to that in step 3.

Step 2: Adjust for what things actually cost

Take-home only matters relative to what you spend. That's where BLS regional price parities come in. RPP measures how much prices differ across metro areas, with 100 as the national average, and it includes housing, which is the biggest driver.

Two rules keep the comparison honest:

Use the metro-level RPP for both cities, not a state average. State averages hide a lot of variance.
Use "all items" for the headline, then look at the housing component separately. If you rent, the housing piece of your budget matters more than the composite index.

For this example, assume a composite index of LA = 100 and Austin = 90. This is a placeholder. Replace it with the current BLS numbers for the two metros you're comparing.

Now we can convert any Austin paycheck into "LA dollars," meaning what it buys relative to your current life:

Real income = take-home pay ÷ price index

Current life in LA: $84,900 ÷ 1.00 = $84,900
Austin at $120K: $93,200 ÷ 0.90 = $103,600 in LA-equivalent dollars

So under these assumptions, the same $120K is worth about $18,700 more in purchasing power in Austin. That's a real raise, though not the whole story yet.

Step 3: Find the salary equivalent (the number you negotiate against)

The more useful question is what Austin salary produces the same real income as your LA job. Work backwards:

Target real income: $84,900
Required Austin take-home: $84,900 × 0.90 = $76,400
Gross salary that produces $76,400 net with no state income tax: about $96,000 (federal tax around $12,300 plus FICA around $7,300)

Your salary-equivalent in Austin, under these assumptions, is roughly $96K. That's about 20% below your LA pay. Any offer above it is a real-income raise. Any offer below it is a real pay cut, even if your rent drops.

Now test the recruiter's $105K offer:

	LA at $120K	Austin at $105K
Estimated take-home	$84,900	$82,700
Price index	1.00	0.90
Real income (LA dollars)	$84,900	$91,900

You take home about $2,200 less in nominal dollars but come out about $7,000 ahead in purchasing power. Taking the 12.5% pay cut can still be the right call, but only if the index holds and you keep the savings.

Then run the sensitivity check most calculators skip. If your real Austin index is 96 instead of 90, the same $82,700 take-home is worth only about $86,100 in LA dollars. That's a gain of roughly $1,200 a year, not $7,000. That's the whole reason to plug in real BLS data for your metros instead of trusting a rule of thumb.

This is the kind of analysis Vontari runs for you, so you don't have to build the spreadsheet yourself.

Step 4: Don't forget property tax if you plan to buy

If you rent, the index above already captures housing. If you're planning to buy, add the tax line that offsets Texas's income tax advantage.

Illustrative example (assumed, not quoted from any listing or tax roll):

A home costing $500K in Austin at an effective property tax rate of about 1.8% means roughly $9,000 per year.
A $900K home in LA at about 1.1% means roughly $9,900 per year.

Notice what happens. The Austin owner pays less in dollars here, mainly because the home costs less. But the same $900K house in Austin would carry about $16,200 in property tax, which would erase most of the $8,300 income tax savings. The tax savings survive only if you buy less house, or rent. That dynamic is the heart of the LA vs. Austin family gap for remote workers, and it's worth reading if kids or childcare are in your budget.

The West Hollywood compound listed at $2.7 million, which Realtor.com News covered in its listing of the multigenerational home, shows the other end of the range. At that price, an example buyer putting 20% down and financing about $2.16M at 6.5% over 30 years would pay roughly $13,650 per month in principal and interest alone, before property tax, insurance, and upkeep. Headline prices hide monthly reality, which is why your comparison should be built on monthly cash flow rather than list price.

Step 5: Price the move itself

A salary-equivalent number ignores the cost of getting there. Model transition costs explicitly.

Example one-time costs for LA to Austin (assumed):

Item	Estimate
Movers or truck rental for a one-bedroom	$4,500
Lease-break fee (about one month's rent)	$3,000
New security deposit and first month	$3,800
Travel, temporary overlap, misc.	$1,700
Total	$13,000

Now the break-even timeline at the $105K offer, using the base case:

Annual real-income gain: about $7,000
One-time cost: about $13,000
Break-even: roughly 1.9 years

At the conservative index (96), the gain is around $1,200 a year, and the same $13,000 takes about 11 years to earn back. Same offer, same move, very different answer. The lesson is that break-even depends on the index more than on the salary.

If your employer covers part of the cost, subtract it. A $10K relocation package often covers less than people expect, and taxable reimbursements shrink it further.

Test-drive before you commit: the mid-term rental move

One of the more practical ideas in Realtor.com News's piece on Americans "test-driving" cities abroad is the rise of fully furnished, monthlong rentals. People treat them as "an adult study abroad" before committing to a move. The same logic works domestically.

Before you sign a 12-month lease in Austin, consider a single furnished month there. In the example above, that might cost about $3,500, which is a fee for information. It can save you from a much bigger mistake. You can check commute times, neighborhood noise, and whether your groceries and utilities look anything like the index says. Add it to your transition costs, and treat any month that reveals a problem as money well spent.

Where the savings actually go: the payday trap

Here's the part that no index captures. Realtor.com News reports that 40% of Americans spend most of their paycheck within 48 hours, and financial experts warn that this habit hurts homeowners in particular, since mortgage, insurance, and repairs don't wait for the next payday.

That matters here because a salary equivalent is a potential, not a result. If your take-home rises by $8,300 and your spending rises by the same amount, your real income gain is real on paper and zero in your bank account. A few habits protect the difference:

Automate the gain. Route the difference in take-home (about $690 a month in our example) to savings or a mortgage prepayment the day your paycheck lands.
Set the budget on Austin's index, not LA's. Lower prices only help if your spending follows them down.
Keep a repair reserve if you're buying, since owners face lumpy costs.

When the paycheck isn't the whole picture

Two of the articles in this batch are a reminder that "salary equivalent" assumes a salary. Not everyone has one.

Advisors and business owners. SmartAsset's guide to transitioning or selling your book of business at retirement points out that the value of a practice depends on how clients, staff, and the business will be handled. If your income comes from a client book or a practice, a move changes how much of that income comes with you. Model your income after the move, not before it, and factor in any value you'd give up or sell.

Surviving spouses. Realtor.com News's piece on the "widow tax" describes a two-year window for surviving homeowners. Under current federal rules, a surviving spouse who sells the home within two years of the death can generally still claim the larger married-couple home-sale exclusion, while later sales fall to the single-filer limit. Income that was taxed at joint brackets is also taxed at single brackets afterward. That means the same income produces a lower take-home, which raises your salary-equivalent target. If you're a surviving spouse weighing a move, run the numbers on single-filer status, and confirm the timing rules with a tax professional.

What if your employer keeps you on LA pay?

The biggest swing for remote workers is whether your employer adjusts pay by location. If you keep $120K and move to Austin, the example above shows a real-income gain of about $18,700 at index 90. If your employer applies a location-based cut to something near the $96K salary-equivalent, you're back to roughly break-even, and the move has to justify itself on lifestyle. Ask about pay policy in writing before you sign a lease. For the multi-city version of this problem, see the LA, Austin, and Phoenix remote salary comparison, and for a move that includes selling and settling costs, see moving from Los Angeles to Nashville on $120K.

Your five-input checklist

You can rerun this for any pair of cities with five inputs:

Your current gross salary and filing status.
Estimated take-home in each state (federal, FICA, state and local income tax).
BLS RPP for each metro (composite, then the housing component).
Property tax and insurance, if you plan to buy.
One-time transition costs, minus any employer reimbursement.

The salary equivalent is your current real income times the destination index, converted back to gross. Anything above it is a raise. Anything below it is a cut, whatever the rent looks like.

You can model this for your specific situation at Vontari, including your own tax inputs, price parity data, and transition costs, so you can see your break-even before you sign anything.

The bottom line

In this example, a $120K Los Angeles paycheck is equivalent to roughly a $96K Austin salary. A $105K offer would raise real income by about $7,000 a year if Austin's index is 90, but by only about $1,200 if it's 96. That's the difference between a two-year break-even and an eleven-year one. Neither answer is right in general. It depends on your inputs, your housing plan, and whether you keep the difference instead of spending it.

Before you accept an offer, get your metro-level numbers, calculate the salary equivalent, and price the move. If you'd like to skip the spreadsheet, run your own comparison at Vontari.

Sources

Surviving Homeowners Can Outsmart the ‘Widow Tax’—but You’re Fighting the Clock — Realtor.com News
‘An Adult Study Abroad’: How Americans Moving Overseas Are ‘Test-Driving’ Cities — Realtor.com News
How to Transition or Sell Your Book of Business When You Retire — SmartAsset
40% of Americans Spend Most of Their Paycheck in 48 Hours—Why Financial Experts Say Homeowners Need To Stop — Realtor.com News
EXCL: ‘Booksmart’ Screenwriter Lists Stylish West Hollywood Compound for $2.7 Million — Realtor.com News