Understanding Purchasing Power Parity in Tech: Why $100k Isn't Always $100k

When evaluating job offers across different countries, the raw salary number is often misleading. The true value of your compensation lies in its Purchasing Power Parity (PPP).

The $200k Illusion

Imagine you receive two offers:

• Offer A: $200,000 in San Francisco, USA
• Offer B: $100,000 in Bangalore, India

At first glance, Offer A seems double the value of Offer B. However, when you factor in the cost of living—rent, groceries, healthcare, and taxes—the picture changes dramatically.

What is PPP?

Purchasing Power Parity (PPP) is an economic metric that compares different countries' currencies through a "basket of goods" approach. It answers the question: "How much money would be needed to purchase the same goods and services in two different countries?"

The Real-World Math

According to 2025 World Bank data, the PPP factor for India relative to the US is approximately 0.28. This means that goods costing $1.00 in the US would cost roughly $0.28 in India.

This means your $100,000 offer in Bangalore is effectively providing a lifestyle equivalent to nearly $357,000 in San Francisco ($100k / 0.28). You are essentially earning "more" in real terms.

Strategic Career Decisions

For remote workers and digital nomads, this arbitrage opportunity is massive. By earning a strong currency (USD/EUR) while living in a lower cost-of-living area, you can:

1. Accelerate Savings: Save 50-70% of your income instead of 10-20%.
2. Upgrade Lifestyle: Afford premium housing, domestic help, and travel.
3. Invest Aggressively: Reach financial independence (FIRE) years earlier.

Conclusion

Don't just chase the highest number. Use tools like our PPP Calculator to understand the true weight of your offer. Your wealth is defined not by what you earn, but by what you keep and what it buys.