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 does PPP stand for?
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.
What is purchasing power parity?
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:
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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!
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Traveling — Plan travel expenses by calculating how much money is needed in another country.
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Calculating business costs — Business professionals can use PPP to compare costs and prices in different markets.
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Economic analysis — Economists often use it for various types of analysis.
🔎 Feel free to check out our rental property calculator to estimate profits for your properties!
How to calculate PPP
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:
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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.
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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.
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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.
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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.
💡 A fun example of how PPP works in real life is the Big Mac Index. It compares the price of a Big Mac in different countries to show how much local currency is needed to buy the same product, helping to highlight differences in purchasing power.
What are price level indices?
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.
Country | Price level index (PLI) |
|---|---|
Australia | 90.5 |
Austria | 82 |
Belgium | 81.4 |
Brazil | 45.7 |
Canada | 83.4 |
Chile | 47.6 |
China (People's Republic of) | 47.3 |
Colombia | 37.8 |
Costa Rica | 59.1 |
Czech Republic | 59.4 |
Denmark | 92.5 |
Estonia | 66.1 |
Finland | 85.2 |
France | 76.6 |
Germany | 80.2 |
Greece | 59.5 |
Hungary | 52 |
Iceland | 117.8 |
India | 23 |
Indonesia | 28.7 |
Ireland | 84.8 |
Israel | 101 |
Italy | 69 |
Japan | 64.9 |
South Korea | 57.4 |
Latvia | 57 |
Lithuania | 58 |
Luxembourg | 94.1 |
Mexico | 53.7 |
Netherlands | 84.4 |
New Zealand | 86.5 |
Norway | 90.9 |
Poland | 52.4 |
Portugal | 60.4 |
Russia | 35.4 |
Slovakia | 57.9 |
Slovenia | 63.1 |
South Africa | 41.5 |
Spain | 64.5 |
Sweden | 87 |
Switzerland | 112 |
Turkiye | 41.1 |
United Kingdom | 89.2 |
United States | 100 |
This data is sourced from the and reflects values from 2025.
✅ Check out our cross price elasticity calculator for more economic knowledge.
FAQs
How is purchasing power parity calculated?
How is purchasing power parity calculated? To calculate PPP, you have to:
- Find the price level indices (PLI) for both countries.
- Multiply the PLI by the sum of the price of a given basket of goods and services.
- Adjust for exchange rates between the two countries and multiply to see the result.
- Or just use an online PPP calculator to do the work for you.
How purchasing power parity affect exchange rate?
Purchasing power parity (PPP) doesn't change exchange rates. It shows what exchange rates should be so that prices of goods are the same in different countries. PPP is more about comparison than influence.
How much do I have to earn in Canada for a US lifestyle on $6000/month?
You'd need to earn 7,105 CAD in Canada to live a similar lifestyle as 6,000 USD in the USA. This is calculated using the PPP formula, based on 2025 data.
What's the PPP between USA and United Kingdom?
If a basket of goods costs $100 in the US and the same basket costs £89 in the UK, the PPP exchange rate would be 1 USD = 0.89 GBP, based on the World Bank's data from 2025.