PPP Calculator — Purchasing Power Parity

The PPP calculator is here to answer your purchasing power questions! What is PPP? How do I calculate PPP? How does purchasing power parity affect the exchange rate? Find the answers to these and many other questions by using our purchasing power parity calculator. Compare your salary with ease and find out how much you need to earn to live in another country.

What is PPP? PPP stands for Purchasing Power Parity. This term became popular around 100 years ago, and since then, PPP has been a significant indicator of the global economy's condition. No matter if you use our PPP calculator for homework, preparing for a university exam, or you're just doing your work, we're here to help you every step of the way.

The purchasing power parity calculator is here to help you understand what PPP is and what you can use it for. In short, it's a way to compare the value of money between chosen countries by comparing how much money you'd need to be able to afford the same amount of goods and services as you would in the other country.

PPP is often used to convert salaries and living costs to understand the value of their salary in other countries, but that's not all that PPP can be used for. Here are some examples of PPP providing value:

• Comparing salaries — Wonder how much you'd have to make to live a similar lifestyle in another country? You can use the purchasing power parity calculator to check that, or see our annual salary calculator!

• Traveling — Plan travel expenses by calculating how much money is needed in another country.

• Calculating business costs — Business professionals can use PPP to compare costs and prices in different markets.

• Economic analysis — Economists often use it for various types of analysis.

How do I calculate PPP? It's really quite simple. Follow these steps to calculate purchasing power parity for another country so you know how much you need to earn there to maintain a similar lifestyle as in your current country:

1. Source Country, and Target country — In the first section, choose your current country from the list, and in the second section, choose the country where you want to calculate your salary and compare it to your current one.

   For example, if you live in the USA and want to see how much you need to earn in Canada, choose the USA as the source country and Canada as the target country. The currency symbols for both countries are displayed next to their names.

2. Salary — In the second input of the purchasing power parity calculator, enter your current salary in your local currency (of the source country). The calculator will provide an adjusted salary in the source country's currency, and you'll know how much you need to earn in the target country to afford the same goods and services.

3. Exchange rate — Enter the current exchange rate between the currencies of the chosen countries (e.g., USD/CAD). To ensure the most accurate calculation, search for the latest exchange rate.

4. Adjusted salary — The PPP calculator will output the adjusted salary in the target country's currency. This sum helps you understand how much you need to earn in the target country (in their local currency) to maintain your current lifestyle.

Price Level Indices measure the average price of goods and services in a country compared to others. It's the major component of calculating purchasing power parity. You can see the indices used in our calculator in the table below.

This data is sourced from the World Bank's DataBank and reflects values from 2021.