Memphis Leads as the Top City in 2023 for Salary vs. Cost of Living

SmartAsset study finds Memphis is the No. 1 U.S. city where your salary goes the furthest

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SmartAsset study finds Memphis is the No. 1 U.S. city where your salary goes the furthest

Published by on Mar 24, 2023

In recent years, Memphis has earned spots on a variety of lists that could draw people into the city. For example, in late 2019 — shortly before the onset of the COVID-19 pandemic — Forbes named it one of the 25 Best Places to Visit in 2020. In 2021, Time Magazine touted it as one of the World’s Greatest Places, while in 2022, Condé Nast Traveler named Memphis one of 23 places in world for tourists to visit in 2023.

And earlier this year, the city was named one of the best places in the country to open an Airbnb in.

Now, Memphis has another laurel it can show off to prospective newcomers, this time for residents rather than visitors: Memphis has been recognized as the top American city where you can get bang for your buck.

SmartAsset, the New-York based financial technology company, looked at 76 of the largest cities in the U.S. to see where $100,000 in salary goes the furthest, and Memphis took the top spot on its list. To determine the ranking, it compared the after-tax incomes of the six-figure payday in each city, and adjusted those based on the location’s cost of living.

After subtracting taxes and making the cost-of-living adjustment, a $100,000 salary in Memphis was found to be worth $86,444. This was just enough to beat out El Paso, which posted a $100,000 salary worth $84,966 after taxes and the cost-of-living adjustment.

It wasn’t the only place in Texas to score highly on the list, either, as cities in the state made up the bulk of the top 10.

Here’s a breakdown of the cities that placed in the upper echelon of ranking:

1. Memphis – $86,444
2. El Paso, Texas – $84,966
3. Oklahoma City, Oklahoma – $84,498
4. Corpus Christi, Texas – $83,443
5. Lubbock, Texas – $83,350
6. Houston, Texas – $81,171
7. San Antonio, Texas – $80,124
7. Fort Worth, Texas – $80,124
7. Arlington, Texas – $80,124
10. St. Louis, Missouri – $79,921

Memphis’ neighbor city of Nashville also placed relatively highly on the list, claiming the 15th spot. After taxes and the cost-of-living adjustment, a $100,000 salary there was calculated to be worth $77,782 — which is nearly $10,000 below Memphis’ number but still well above the value in the cities placed at the bottom of the ranking.

In 74th place was San Francisco, where the value of a $100,000 salary came out to $36,445. Honolulu took 75th place, with $36,026; and New York City took the final spot — with a $100,000 salary that landed at a value of $35,791.

If you’re wondering more about how the math was done, here’s an example given by SmartAsset. The annual take-home pay — after tax — in Los Angeles is around $68,050. But the cost of living is about 52.5% higher than the national average. So, to calculate the city’s adjusted annual take-home pay, the analysts divided its average after-tax income by 1.525. This put the $100,000 salary’s value for someone living in Los Angeles at $44,623, giving it the 71st spot in its ranking.

On the other hand, a person in Memphis who earns $100,000 per year takes home about $74,515 after taxes. But because the city’s cost of living is almost 14% lower than the national average, the value of that $100,000 was boosted up to $86,444.

This article was originally published at “bizjournals.com“

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