High-earners could save 40% of their salary by moving from New York to Texas because of cheaper living costs and lower tax rates, report says

• High-earners in New York could save 40% of their salary by moving to Texas, a new study shows.
• This is because New York City has higher tax rates and living costs.

High-earners in New York City could save 40% of their salary by relocating to Texas, a new study found.

SmartAsset, a financial technology company, released a new report Thursday analyzing how much Americans can save by making the move from expensive cities like New York and San Francisco to Austin, Texas.

It found that New Yorkers on a salary of between $150,000 to $650,000 could save as much as 43% by living in Austin.

A person on a $650,000 salary, for example, could save $258,212 by living in Austin. This is because after accounting for tax and the cost of living, you'd have only $160,717 left in New York but in Austin, you'd have $418,929 left. Tax rates in New York range from 37% to 45%, but in Austin it's between 27% to 35%.

SmartAsset gathered federal, state, and local taxes for a single tax filer. Its analysis of the cost of living in each city is taken from data from the Council for Community and Economic Research, which looks at the cost of necessities such as housing, transportation, utilities, groceries, and healthcare among others.

The cost of living in New York is 122% higher than the national average, according to Smart Asset, and simple things like the cost of milk, a haircut, dinner at the pub, or going to the gym can drain your income.

In fact, making $100,000 in New York feels like just $36,000, and to have the buying power of $100,000 you'd have to make $300,000.

Some young professionals are being pushed out of New York City because wages are not keeping up with increasing costs. Rent prices were up by more than 13% in August 2022 but wages had dropped 9%, according to StreetEasy data.

Zumper's National Rent Report in June ranked New York top for the highest cost for a 1-bedroom apartment at $3,900, whilst San Francisco came third at $3,000.