Colorado cost of living calculator

What the tool puts on each side of the line

On one side, a salary and a state. On the other, five monthly spending lines: rent or mortgage, utilities, food, transport and everything else. The result is what the spending costs a year, what share of the salary it takes, how much of it is housing, what the state takes in income and sales tax, and what is left before federal tax.

The five categories are deliberately coarse. A budget with forty lines is more accurate and much less likely to be filled in honestly, and the point of this page is comparison between places and between plans rather than bookkeeping. If you want a real budget, the banking and budgeting guides are the place for it.

The state picker is doing more work here than on most of our tools. It sets two things: whether and how state income tax is applied, and the combined sales tax rate applied to the food and general spending lines. Both are published figures we hold per state, and both are visible on the state pages.

A worked example at the default figures

The tool opens on a $75,000 salary with $1,650 of rent, $320 of utilities, $650 of food, $400 of transport and $500 of everything else.

Monthly spending is $3,520, which is $42,240 a year. That is 56% of the salary, and rent is 47% of the spending. With no state chosen, the tool stops there and reports about $32,760 left before federal tax and FICA.

Now choose a state, and the answer changes in two directions at once.

Read the last row carefully, because it is the most important thing on this page. California levies a substantial income tax and the tool has not deducted a cent of it. The figure shown is not a claim that Californians keep more than Illinois residents. It is the tool telling you it does not know.

Why does the tool refuse to calculate some states?

Because we publish each state's top marginal rate and its standard deduction, and for a graduated income tax those two numbers are not enough to compute anybody's bill.

A graduated tax charges rising rates across a series of brackets. Applying the top marginal rate to a whole salary would overstate the tax badly, often by a factor of two or more at middle incomes. Applying some invented average rate would produce a number with no source behind it. Neither is acceptable, so the tool reports Not calculated and names the reason: graduated brackets, which we do not publish in full.

Where a state levies a flat tax, the two figures we hold are sufficient. Taxable income is salary minus the standard deduction, and the tax is that multiplied by the single rate. Illinois at the defaults is $75,000 taxed at 4.95% with no state standard deduction to subtract, giving $3,713. Where a state levies no income tax, the answer is zero and the tool says None.

There is a consequence you must carry with you. The "left before federal tax" line treats an uncalculated state tax as zero. In a graduated state that line is therefore too high, by the whole amount of the state tax you will actually pay. It is not an estimate with error bars. It is a figure with a known omission, and the size of the omission is the size of your state tax bill. Look it up with your state's revenue department before comparing that number against anything.

We would rather show a gap than fill it with a guess. That policy runs through the whole engine and is set out in our methodology.

A state with no income tax raises the money elsewhere

Texas in the table above looks like the best outcome, and on that one line it is. But a state budget has to be funded, and a state that does not levy income tax funds it through property and sales taxes instead.

The tool shows part of this and not all of it. It applies the combined state and average local sales tax rate to your food and general spending, so Texas at 8.20% and Illinois at 8.96% both appear. What it does not show is property tax, which in several no-income-tax states is among the highest in the country and lands on homeowners directly and on renters indirectly through the rent line you typed in yourself.

So the comparison to make is not income tax against income tax. It is the whole picture:

• Income tax, which this tool computes for flat states, refuses for graduated ones, and reports as none where there is none.
• Sales tax, applied here to two of the five spending lines.
• Property tax, not modelled here at all, and published per state on our state pages.
• Housing cost, which is the largest line for most households and the one that varies most between places.
• Everything a state charges that is not a tax, from vehicle registration to tolls to university tuition for residents.

A move that saves $3,700 of income tax and costs $6,000 more in rent is a move that costs money.

How the sales tax figure is built, and where it overstates

The tool multiplies the combined rate by twelve months of your food and everything-else spending. It does not apply sales tax to rent, utilities or transport.

That is a defensible simplification in both directions, and it is worth knowing which way it errs for you.

Many states exempt groceries from sales tax entirely, and several more tax them at a reduced rate. In those states, applying the full combined rate to the whole food line overstates the tax, and the more of your food budget is groceries rather than restaurant meals, the larger the overstatement. In the handful of states that do tax groceries at the general rate, the figure is closer to right.

In the other direction, the combined rate is a state rate plus an average local rate. Your city or county may be above or below that average, and some spending in the "everything else" line, such as certain services, may not be taxable at all where you live.

Treat the sales tax line as an order of magnitude rather than a bill. Its job here is to stop a comparison between two states from ignoring sales tax completely, which is the more common error.

Common mistakes when comparing two places

• Comparing salary to salary. A 10% raise into a state with a flat 4.95% income tax, higher rent and a 9% sales tax is not a 10% raise. Run both sides through the tool with their own spending figures.
• Reading the graduated-state result as a low tax bill. It is not a result. It is a refusal, and the "left" figure is too high by the whole amount of the omitted tax.
• Treating no income tax as no tax. Property and sales taxes fund the same budget, and the property tax is invisible here.
• Using national averages for the spending lines. Housing is the line that differs most between places, and it is the one you have to supply, because we publish no rent data at all.
• Forgetting this is before federal tax. Neither federal income tax nor FICA is deducted anywhere on this page. The "left" figure is not take-home money.
• Copying your current utilities into a new city. Climate and building stock change the number. The utility bill calculator is the place to rebuild it.
• Ignoring one-off moving costs. A move has a price, and it lands in the first year, when a household is least able to absorb it.

What this calculator does not include

• Federal income tax and FICA. The single largest deduction for most households is absent by design. Work out take-home with the paycheck and tax tools, then compare that against the spending here.
• Local income taxes. Several cities and counties levy their own, and none of them are modelled.
• Graduated state income tax. Reported as not calculated, for the reason given above.
• Property tax. Published per state on our state pages, not applied here.
• Retirement contributions, debt payments and insurance premiums, unless you put them in the "everything else" line yourself.
• Grocery exemptions. Sales tax is applied to the whole food line regardless of what your state exempts.
• Any rent, wage or price data of ours. Every spending figure is yours. That is a limitation and it is also the point: an average household's costs are not a household's costs.

What should you check before acting on the result?

• Get a real rent or mortgage quote for the specific place, not a metro average
• Rebuild the utilities line for the new climate rather than copying the old one
• Look up the actual state income tax bracket table if the tool reported Not calculated
• Check the property tax on our state pages, since it is not in this result
• Check whether your state exempts groceries before trusting the sales tax line
• Run federal tax and FICA separately, because neither is deducted here
• Add the one-off cost of moving to the first year

Do that and the number in front of you is defensible. Skip the tax steps and it is a spending total with an incomplete tax layer sitting under it, which is fine for tracking your own budget month to month and unsafe for deciding where to live. Wider background on household costs is in our cost of living guides.

This page describes published state rates and arithmetic on your own figures. It is not tax advice, and it does not compute a state tax return. See the disclaimer.