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By the NRIWallah team · Last reviewed: August 2026
Exchange rates make foreign salaries look enormous. Purchasing power tells you what they actually buy.
Loading cost-of-living data…
Why the usual comparison is wrong. Converting a salary at the exchange rate tells you almost nothing — £1 buys far more in India than the rate implies. This converts at purchasing power instead, then adjusts for where you would actually live. Most comparisons quietly price central London or Manhattan; the defaults here are Harrow, Edison, Brampton and Parramatta, with the commute those places require costed in.
Like-for-like equivalent
realistic range to
Straight currency conversion says
Overstated by
once tax, prices and commuting are counted
Both sides buy the same basket of goods and services once you get here.
Retirement contributions are not spendable now, so they are kept out of the comparison above — but they are real pay, and the spread between countries is far wider than most people expect.
For families these two lines routinely matter more than the tax difference. International school fees in the Gulf and Singapore can consume an entire salary premium; a home owned outright or a family property removes the largest cost in the budget.
Owning outright in India is the single most common reason a return works financially when the salary comparison says it should not.
Identical pay and identical tax — only the address changes. This is why benchmarking against a city centre misleads.
| Area | Price level | Commute | Equivalent |
|---|---|---|---|
How this is worked out. Take-home pay is computed under each country's own 2026 income tax and social security rules, commuting is deducted, and what is left is converted using the World Bank PPP conversion factor for private consumption, scaled by a location factor. Location factors use 1 + 0.35 × (local rent ÷ national average rent − 1) — only the housing part of a budget really moves with your address, so a suburb at 1.5× national rent costs about 1.18× national, not 1.5×.
A salary comparison, not an offer valuation. Excludes employer pension and superannuation contributions, healthcare (significant in the US, largely free at the point of use in the UK), childcare, school fees and visa costs — all of which can move the answer more than tax does. US figures are federal only and ignore state income tax, which ranges from nothing in Texas to over 10% in California; Canadian figures use Ontario. Indian salaries assume you become an Indian tax resident, so the section 87A rebate applies — unlike the position for NRI rental income. See the DTAA estimator if you will have income in both countries.
Someone in your WhatsApp group has an offer from London. The first thing anyone does is multiply by the exchange rate — £75,000 becomes ₹96 lakh, and the conversation is over before it starts.
That number is real in exactly one situation: wiring money home. For every other purpose it is meaningless, because the exchange rate prices goods that cross borders, and most of your salary goes on things that never do. Rent. School fees. A plumber. Vegetables. An auto to the office. None of these are traded internationally, and none of them cost the same in Hounslow as in Hyderabad.
Convert on purchasing power instead and £75,000 in London buys roughly what ₹16.5 lakh buys in India. The exchange rate overstated it by nearly six times. That is not a rounding error, it is the whole decision.
Most cost-of-living comparisons quietly assume a life in the city centre. That is where the headline rents are, and it is where almost no NRI lives.
Average private rent in Kensington and Chelsea runs to about £3,591 a month. In Harrow — home to one of the largest Indian communities in Britain — it is around £1,759. Same city, same tax system, same job market, and a price difference of more than two to one. Benchmark against the wrong one and every conclusion that follows is wrong too.
So the defaults here follow the settlement patterns rather than the tourist map. Harrow, Wembley, Southall and Ilford in London. Edison and Iselin in New Jersey, where South Asians approach 40% of the population in parts of Middlesex County. Brampton in Ontario, 27.7% Indian-origin. Surrey in British Columbia, 37.8% South Asian. Parramatta in Sydney, where the India-born share is triple the Greater Sydney average. These are the places the comparison should be about.
Cheaper rent in the suburbs is not free — you buy it back in fares, and any honest comparison says so.
An annual Zones 1–5 Travelcard from Harrow into central London costs about £2,784. That comes straight out of take-home pay, every year, on top of roughly ninety minutes a day you do not get back. The calculator subtracts the cash; the time is yours to weigh. It is worth noting the trade is not unique to London — the Bangalore or Gurgaon version of this commute can be worse, which is part of why the Indian side of the comparison is not as comfortable as it first looks.
The same applies in reverse to the Gulf, where a large number of Indian families live in Sharjah and commute into Dubai. The rent saving is substantial and so is the daily cost of crossing the emirate.
The single number is the talking point. The range is the answer.
Data quality varies enormously by country, and the calculator is explicit about which you are looking at. UK figures come from ONS statistics published by local authority under an open licence — as good as this gets. US and Canadian figures come from listing aggregators whose national medians disagree by a few hundred dollars. Australian, UAE and Indian figures are genuinely thin: sources conflict, or measure different things, or both. The tolerance band widens from about ±5% to ±20% accordingly.
The largest single assumption is on the India side. The World Bank’s purchasing power figure for India is national and includes rural India, but nobody comparing job offers is moving to rural India, so Indian cities carry a 1.25 metro uplift. Reasonable people could argue for 1.15 or 1.35, and the answer moves accordingly. That is exactly why the output is a band.
Plenty, and some of it matters more than the salary. Employer pension and superannuation contributions. Healthcare, free at the point of use in the UK and Canada and a serious employment-linked cost in the US. Childcare and international school fees, which in the Gulf and Singapore routinely consume an entire salary premium. Visa costs and the immigration health surcharge. Whether there is a route to permanent residency at the end of it, and what that is worth to you.
And the things no calculator prices at all: ageing parents, whether your spouse can work, what happens to your children’s sense of where they are from. The arithmetic here is a useful corrective to a badly framed conversation. It is not the conversation.
If you are weighing a return to India, the RNOR tracker explains the transitional residency status that can shelter foreign income for two to three years after you land, and the home loan comparison covers borrowing on either side of the move.
NRIWallah does not provide financial or immigration advice. Tax rates are for the 2026 tax years and are simplified — US figures are federal only and Canadian figures use Ontario. Cost-of-living factors carry the tolerance bands shown on the page. Verify anything material with a qualified adviser before acting on it.
