California
142.2
Composite, US avg = 100
Relocation Comparison | CA vs TX
California vs Texas Cost of Living 2026: $100 in CA = $64 in TX
California sits at 142.2 on the 2026 C2ER composite, Texas at 91.5. Housing is the dominant gap (196.5 vs 81.5) but income tax (1-13.3 percent vs zero) is a close second. Texas property tax (1.60 percent effective) takes back some of the income tax win. Below: the full category-by-category breakdown, salary equivalency, and the relocation decision framework.
Texas
91.5
Composite, US avg = 100
Gap
35.7%
Cheaper in Texas overall
Side by side
All key cost dimensions, compared
| Metric | California | Texas | Cheaper |
|---|---|---|---|
| Composite COL index | 142.2 | 91.5 | TX |
| Housing sub-index | 196.5 | 81.5 | TX |
| Median home price | $785,300 | $298,700 | TX |
| Median 2BR rent | $2,120/mo | $1,320/mo | TX |
| Groceries sub-index | 105.1 | 93.5 | TX |
| Utilities sub-index | 113.2 | 101.5 | TX |
| Transportation sub-index | 118.9 | 98.5 | TX |
| Healthcare sub-index | 107.8 | 95.8 | TX |
| State income tax | 1.0% to 13.3% | None | TX |
| Property tax (effective) | 0.71% | 1.60% | CA |
| State sales tax | 7.25% | 6.25% | TX |
| Median household income | $84,907 | $67,321 | CA |
| Uninsured rate | 6.8% | 17.3% | CA |
| Average electric bill | $178/mo | $148/mo | TX |
Sources: BEA Regional Price Parities, C2ER Cost of Living Index, Census ACS 5-year, Tax Foundation, EIA, KFF. See methodology.
Salary equivalency
What a California salary buys in Texas
To match California purchasing power in Texas, you need roughly 64 cents per California dollar (TX 91.5 / CA 142.2). The math below uses the C2ER composite, not tax-adjusted. Add the Texas no-state-income-tax saving on top for the full picture.
California $100,000
$64,346
Equivalent purchasing power in Texas, before tax.
Plus roughly $5,000-9,000 in income tax saving
California $150,000
$96,519
Equivalent purchasing power in Texas, before tax.
Plus roughly $10,000-13,000 in income tax saving
California $200,000
$128,692
Equivalent purchasing power in Texas, before tax.
Plus roughly $14,000-18,000 in income tax saving
Texas wins on
Where Texas is the cheaper state
Housing cost. Median home Texas $298,700 vs California $785,300, a 62 percent reduction. Even Austin (the most expensive Texas metro at median around $510,000) is well below the California state median. For first-time buyers and growing families, this is the dominant factor.
State income tax. Zero in Texas vs up to 13.3 percent in California. For a household earning $200,000, the saving is roughly $14,000-18,000 per year. The saving scales with income; high earners benefit most in absolute terms.
Sales tax (modestly). Texas 6.25 percent state vs California 7.25 percent state. Local add-ons in both states can push combined rates to 8-9 percent.
Gas and transportation. Texas gas around $3.05/gallon vs California $4.85/gallon. For a 15,000-mile-per-year driver, the difference is roughly $1,000-1,200 per year.
Cooling cost. Surprisingly, despite Texas summer heat, average electric bills are slightly lower than California because of cheaper rates (Texas 13.45 cents/kWh vs CA 27.10 cents/kWh per EIA). High consumption in summer is partially offset by cheaper marginal cost.
California wins on
Where California is better
Property tax under Proposition 13. California effective property tax 0.71 percent vs Texas 1.60 percent. On a $500,000 home, that is $3,550 vs $8,000 per year, a $4,450 difference. Proposition 13 also caps annual assessment increases at 2 percent for long-term owners.
Healthcare access. California uninsured rate 6.8 percent vs Texas 17.3 percent (the highest in the country). Texas has not expanded Medicaid under the ACA, leaving a coverage gap. For self-employed and lower-income households without employer-provided coverage, California is meaningfully better.
Median household income. California median $84,907 vs Texas $67,321, a 26 percent income premium that partially offsets the cost-of-living premium for many households.
Public school quality (in many districts). Both states have wide variation, but coastal California districts (Palo Alto, Cupertino, Beverly Hills) consistently outscore most Texas districts. Texas school districts (Westlake, Eanes, Highland Park) are also elite, but the proportion of high-performing districts is higher in California.
Climate (subjective). California has the most varied climate in the country; many areas are mild year-round. Texas summer (June to September) is brutal in most of the state.
Decision framework
Who should move, and who should not
Move to Texas if: You are a remote worker earning a California salary and want to dramatically improve your housing math. You are a young family priced out of California metros. You are a senior tech or finance professional whose total compensation is concentrated in cash wages rather than long-term equity tied to a California-based employer. You are willing to absorb hot summers.
Stay in California if: You bought a California home before 2015 and your Proposition 13 assessment is well below current market. The unrealised capital gains tax exposure on a sale would offset much of the relocation saving. Your job requires in-person presence in a California office (the saving doesn't apply if you need to keep the California salary structure). You have school-age children in top-performing California public school districts. Your household income is below roughly $80,000, where the income tax saving is small in absolute terms.
Run the math both ways using the two-state calculator. For most California-to-Texas relocation cases, the net annual saving for a $150,000-300,000 household income is in the $15,000-40,000 range, with the larger numbers driven primarily by housing-cost differences in the first 1-3 years.
For deeper tax-only analysis, see the comparable page on incometaxbystate.com which focuses on income-tax detail rather than total cost. For California paycheck math specifically, see paycheckcalculatorforcalifornia.com.
Frequently Asked
California vs Texas, answered
How much cheaper is Texas than California?
Texas is roughly 35.6 percent cheaper than California on the 2026 C2ER composite (TX 91.5 vs CA 142.2). The dominant driver is housing: TX 81.5 vs CA 196.5. Housing is weighted 28 percent of the composite, so a $100 grocery basket in California is roughly equivalent to a $64 basket in Texas after adjusting for the index difference. For a household spending $80,000 per year in California, the Texas equivalent purchasing power is about $51477.
How much does the no-state-income-tax saving actually amount to?
Texas has no state income tax. California's top marginal rate is 13.3 percent (plus 1 percent mental-health surtax on income above $1 million). On a $100,000 household income, the saving is roughly $5,000-9,000 per year depending on filing status and deductions. On a $200,000 household income, the saving rises to roughly $14,000-18,000 per year. On $500,000, the saving exceeds $35,000 per year. The saving is larger in absolute and percentage terms for high earners.
Doesn't Texas property tax wipe out the income tax saving?
Partially, for some households. Texas effective property tax rate is 1.60 percent, the second-highest in the country, versus California's 0.71 percent under Proposition 13. On a $400,000 home, Texas property tax is roughly $6,400/year vs California $2,840/year on the same home value, a difference of $3,560. But California home prices are much higher: the median home in California is $785,300 vs Texas $298,700. On the median home in each state, California property tax is about $5,580 vs Texas $4,780. Net of property tax differences, the income tax savings still favor Texas for most income levels.
What about gas prices and transportation?
California gas averages $4.85/gallon (highest in the country) vs Texas $3.05/gallon (one of the cheapest). For a household driving 15,000 miles/year in a 25 mpg vehicle, that is 600 gallons, a difference of roughly $1,080/year. California transportation sub-index 118.9 vs Texas 98.5. The C2ER transportation sub-index includes fuel, vehicle maintenance, and insurance.
What does $200,000 California buy in Texas?
Roughly $128,692 in purchasing power. The math: $200,000 / 142.2 * 91.5 = $128,692. A household with that income in California buying a typical median home, paying state tax, and average commute costs would have approximately the same lifestyle in Texas earning $128,692. The flip side: a $128,692 Texas job offer for a $200,000 California current earner is approximately a wash on lifestyle, not a pay cut.
What is the healthcare cost difference?
California healthcare sub-index 107.8 vs Texas 95.8, modestly cheaper in Texas. The bigger differentiator is the uninsured rate: California 6.8 percent vs Texas 17.3 percent (highest in the country). Texas has not expanded Medicaid under the ACA, leaving a coverage gap for adults earning between Medicaid eligibility and ACA marketplace subsidies. For employer-provided coverage, the cost difference is small; for self-employed and lower-income households without employer coverage, Texas access is more constrained.
Where in Texas is closest to California in lifestyle?
Austin is the closest cultural match (tech, music, food scene). Austin housing has risen sharply since 2020 (median home around $510,000) but remains 40-50 percent cheaper than Bay Area or LA equivalent. Dallas suburbs (Plano, Frisco, Southlake) attract families relocating from coastal California. Houston offers the most diverse job market across energy, healthcare, and aerospace. The Austin Hill Country is the closest analog to a California Wine Country lifestyle.