Sure, mate, good point.
SamAI Software

I didn’t know Stackoverflow used the Big Mac index! I love it — the Big Mac index is one of these ideas that are all the cleverer that they are simple. Of course, comparing wages with it makes a few very strong assumptions, like the fact that the cost of producing whatever is produced locally to make burgers is equivalent in each country, or that whatever is not produced locally is shipped at a negligible price, or that overheads do not vary so much, or even that the demand for burgers is somewhat the same wherever you go.

There are actually people who do make these calculations on a daily basis: expatriation HR in multinationals. Apparently they use proprietary data for cost-of-living like the Mercer indices, which themselves cost a living to acquire.

For free, there is Numbeo which publishes online cost-of-living and purchasing power indices. My comparison method would be to start by turning a gross salary into its local net equivalent, apply the purchasing power ratio and turn it back to gross with the target tax rate. For the tax rate, the best method would be to use the income tax rates as they really apply (by tax brackets).

A 55,000 GBP salary in Britain would be somewhat equivalent in the US to 58,430 USD:

55,000 gross = 39,367 net

39,367 * 130.17 / 109.78= 46,679

46,679 net = 58,430 gross

We could simplify the process by using top bracket tax rate tables like this one, but the kick-in levels for the different brackets vary enormously between countries. Also, I may be forgetting a lot of factors in these calculations.

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