Economists publish purchasing power parity between countries. Nobody publishes it for the regions of Britain, even though the gap between London and the North East is wider than the gap between many pairs of countries. The state taxes you nationally, charges you locally, and never shows you the net effect. This tool shows the net effect.
In America, tax is a market. Texas and Florida charge no state income tax; California takes up to 13.3% on top of the federal bill. Americans can vote with their feet, millions do, and states compete for them. Britain has no equivalent. Income tax and National Insurance are set in Westminster and follow you from Penzance to Berwick. The one exception, Scotland, runs the experiment in reverse: the only alternative income tax schedule on the island charges a £50,000 earner £1,496 a year more. And council tax, the only tax set locally, points the wrong way: the cheapest Band D bills in the country are in the London boroughs where a normal salary cannot cover the rent, and the dearest are in Nottingham, Dorset and Rutland.
So a British worker cannot move to a lower-tax Britain. The only arbitrage left is the one this tool prices: costs. You cannot move your salary somewhere the state takes less. You can only move it somewhere the landlord, or the bank, takes less: renters arbitrage the rent, owners arbitrage the mortgage, because a cheaper house is interest you never pay. That is the internal exchange rate, and it is the whole game.
And the trap tightens on its own. The personal allowance and the £50,270 higher-rate threshold are frozen until 2031; the £60,000 child benefit taper and the £100,000 cliff are not indexed at all. As inflation pushes pay up, workers get dragged across those lines without being a penny better off, and the drag runs fastest where nominal pay is highest: London and the South East, where salaries have to chase the dearest housing in the country. Fiscal drag is a stealth tax everywhere. In London it is a stealth tax on money the rent had already spent.
Income tax and National Insurance are set nationally: a £50,000 salary produces the same payslip in Sunderland as in Zone 3. The costs are not national. Average private rent is £2,302 a month in London against £781 in the North East. Council tax runs the other way. Childcare costs half as much in the North as in Inner London, and the £100,000 childcare cliff bites hardest exactly where a nursery place costs most. This tool nets it all off and prices your salary in every region, the same way economists price a dollar in Delhi against a dollar in New York.
The tool computes your household’s residual discretionary income: net pay after income tax, National Insurance and (where selected) Plan 2 student loan, plus child benefit net of the High Income Child Benefit Charge, minus the four big costs you cannot opt out of: rent, council tax, childcare net of entitlements, and commuting. The exchange rate between two regions is the ratio of that figure for the same household. The equivalent salary is found by inverting the tax system: because tax is progressive, matching a cheaper region’s living standard in an expensive one needs a bigger gross pay rise than the cost gap alone, since the extra income is taxed on the way in.
London still pays more in cash terms. The ONS median full-time salary in London is £49,692 against £34,403 in the North East. This tool compares the same salary across regions; it does not claim the same person earns the same everywhere. But run the medians through the tool and the ranking still inverts: the median Londoner keeps less than the median North Easterner.
Averages hide dispersion. A regional average rent mixes Mayfair with Croydon. Your own numbers will differ; that is why the commuting field is editable and the rent basis is stated.
Some of the London premium buys something. Density, transport, labour-market depth. The tool prices what is compulsory, not what is valuable. Quality of life is not in the model, and the model says so.
The ONS last published relative regional consumer price levels in 2016. A decade of divergence in rents, council tax and childcare has gone unmeasured by the state. This tool prices the four big compulsory costs directly from current official data instead; the residual basket (food, services, leisure) is left unadjusted rather than deflated by a ten-year-old index.
Engine and data pack versioned as v2026.1. Annual refresh each April with the new tax year. Found an error? The whole model is in this page’s source. Check our working.