US vs Mexico: Cost of Living, Salary & Tax Compared

Every measure, both sides

United States against Mexico, one row per measure. Country figures reviewed September 4, 2026; the US baseline reviewed September 4, 2026. Price indices use a US national average of 100, so a lower number means cheaper.
Measure	United States	Mexico	Which side wins
Overall price levelconsumer prices including rent, US = 100	100	62	Mexico 38% cheaper
Rent, 1-bed in the centremonthly average	$1,700	$765	Mexico 55% cheaper
Rent, 1-bed outside the centremonthly average	$1,350	$495	Mexico 63% cheaper
Groceriesindex, US = 100	100	93	Mexico 7% cheaper
Transportindex, US = 100	100	84	Mexico 16% cheaper
Utilitiesindex, US = 100	100	27	Mexico 73% cheaper
Restaurantsindex, US = 100	100	73	Mexico 27% cheaper
Average net salarymonthly, what local jobs pay	$4,230	$1,010	United States 319% more, $3,220/mo
Top income tax rateheadline top bracket, not the effective rate	37%	35%	Mexico 2 points lower
VAT / sales taxUS figure is an average state and local sales tax	7.5%	16%	United States 8.5 points lower
Healthcare modelhow the cost is collected	Mainly private, employer-linked	Mixed public and private	Not comparable Different funding, not a score
Typical cover for one adultUS figure is the full employer-sponsored premium, most of it paid by the employer	$777/mo	$150/mo	Not comparable One is a payroll benefit, one is a policy you buy

The two healthcare rows are left out of the count because the US number is a premium mostly paid by an employer and the Mexico number is not. Read the margins rather than the total: six of the cost rows are components of the same price index, so a cheap country wins them together and the headline score overstates the spread.

The same comparison in dollars a month

A US net income of $4,230 a month buys the average American lifestyle. Reproducing that same basket in Mexico, at a price level of 62, costs about $2,623, leaving roughly $1,607 a month unspent.

Two ways to arrive, each run through the price level in Mexico.
If you	Monthly income	What it is worth in Mexico
Keep a US-paying job and work remotely	$4,230	Buys the US average basket for $2,623, $1,607 left over each month
Take a local job at the Mexico average	$1,010	Buys what $1,629 buys in the US, 61% below the US average net salary

The same three gaps over a full year:

Same basket, over a year: $19,284 kept rather than spent
Centre rent, over a year: $11,220 less than the US average
Local pay against US pay: $38,640 less a year on the local average

Every line uses the overall price index, rent included, and assumes you spend like an average household, which nobody does exactly. The rent figure is a national average for a one-bedroom in a city centre, not a quote for a specific city. Put your own numbers in below.

Run your own income through Mexico

The table above uses the US average. Enter what you actually take home and see how the comparison changes.

Your monthly take-home pay

$

After tax, in US dollarsInclude rent in the comparison

—

Enter your income to see the comparison.

Same lifestyle costs you—

Monthly difference—

1-bed rent, city centre—

1-bed rent, outside centre—

Category price levels, US average = 100
Category	Index	vs US

A ratio, not a budget: it scales your income by the country's overall consumer price level against the US average. Your actual costs depend on the city and how you live. Rent figures are national market averages for a one-bedroom apartment.

Where Mexico sits among the 15 countries compared

The same measures again, this time against the rest of the set rather than against the US. A comparison can look strong on its own and still be mid-table.

Rank is out of the 15 countries with a full comparison. "What local pay buys locally" divides average net pay by the local price level, so it answers a different question from the salary row above.
Measure	Mexico	Rank in the set	Leader	United States
Overall price level	62	2nd of 15	Thailand 32	100
Rent, 1-bed in the centre	$765	3rd of 15	Thailand $475	$1,700
Average net salary	$1,010	14th of 15	Australia $4,996	$4,230
What local pay buys locally	$1,629	14th of 15	Australia $4,996	$4,230
Top income tax rate	35%	1st of 15	Joint lowest in the set 35%	37%
VAT / sales tax	16%	6th of 15	Canada 5%	7.5%

What the numbers do not say

The salary column is a local salary

$1,010 a month is what employment in Mexico pays on average, not what you would earn there. If you carry a US income with you, the salary row stops applying and only the cost rows matter, which changes the result of this whole page.

US healthcare hides inside the employer

Employer-sponsored single coverage averaged about $777 a month in total premium, most of it paid by the employer, before deductibles and out-of-pocket costs. That cost never appears in a consumer price index, so a raw price comparison flatters the US. Mexico collects it differently (Mixed public and private), and what you can actually use depends on your status: Legal residents can enrol voluntarily in IMSS through the Seguro de Salud para la Familia (Modalidad 33), a single annual premium priced by age. The 2026 schedule runs from MXN 9,300 at ages 0-19 to MXN 22,150 at 80 and over, about USD 550 to USD 1,306 a year at the Banxico FIX rate of 16.956 MXN/USD. The brackets most movers fall into are MXN 12,350 at ages 30-39, MXN 14,350 at 40-49, MXN 14,850 at 50-59 and MXN 20,600 at 60-69, so roughly USD 730 to USD 1,215 a year. IMSS screens for pre-existing conditions and applies waiting periods before some treatments, so confirm the current rules before relying on it. Registered residents with a CURP can also enrol in IMSS-Bienestar. In practice most American residents use private hospitals, paying cash for routine care and carrying a Mexican major-medical policy for catastrophic cover. Medicare does not pay for care in Mexico.

Tax follows your citizenship, not your address

The United States taxes citizens on worldwide income wherever they live, so the tax row is not a swap of one system for another. Mexico has an income tax treaty with the US and no totalization agreement, so social contributions can be owed on both sides. Local tax residency rule: Mexico does not use a day-count test for individuals. Under Article 9 of the Codigo Fiscal de la Federacion you become a Mexican tax resident when you establish a casa habitacion (permanent home) in Mexico. If you also keep a home in the United States, the tiebreaker is your centre of vital interests: Mexico wins if more than 50% of your calendar-year income comes from Mexican sources, or if Mexico is the principal place of your professional activities. Immigration status and tax residency are separate questions, so holding an INM residence card is not by itself decisive. Mexican tax residents are taxed on worldwide income at rates from 1.92% to 35%.

Top rates are not what you pay

The table shows 35% against 37%, but those are top brackets. Where the brackets start, what social contributions add, and what deductions exist decide the actual bill. The two sides are not measured the same way: the US figure is the top FEDERAL rate only, before state and city income tax, while many countries' headline rates already include regional or municipal tax. Read the gap as indicative, not as a like-for-like difference. The 1992 US-Mexico income tax treaty and its 2003 protocol are in force, and its Article 4 tiebreaker can resolve dual residence. For tax year 2026 the Foreign Earned Income Exclusion is USD 132,900 per qualifying person, but it covers earned income only, not pensions, Social Security, dividends or capital gains, so many US retirees in Mexico rely on the Foreign Tax Credit instead. Mexico is not on the SSA list of countries with a totalization agreement in force: one was signed in 2004 and never entered into force, so self-employed Americans owe the full 15.3% US self-employment tax regardless of any IMSS contributions. FBAR filing is triggered when foreign accounts together exceed USD 10,000 at any point in the year. Mexico's top personal rate of 35% starts above MXN 5,107,703.93 of annual taxable income; IVA is 16%, reduced to an effective 8% in designated northern border municipalities through a VAT tax-credit decree.

Consumption tax lands differently

16% VAT is already inside the shelf price in Mexico. The US average sales tax of 7.5% is added at the till and varies by state and city. Comparing the two rates directly overstates the gap you feel at the counter.

National averages hide the city you would live in

Every figure here is a national average. Mexico City does not price like the rest of Mexico, and the US average is stretched between Manhattan and rural Ohio. Compare the city you would actually move to against the city you are actually leaving.

The exchange rate is a live variable

Local prices and salaries are converted to US dollars so the two columns can be compared. Everything on the Mexico side is quoted in Mexican peso at home, so a swing in the MXN to USD rate moves every number in that column without anything local actually changing.

Nothing here prices the move itself

Shipping, flights, a deposit on a first lease, visa fees and the months before local income starts are one-off costs that sit outside a cost of living index. They usually decide the first year, not the price of groceries.

This page is reference information, not immigration, tax or medical advice. The tax and healthcare rows are deliberately simplified. Verify anything you plan to act on against the official sources: Mexico tax authority → · health authority →

The call

Mexico is the best-value move an American can make when the goal is to cut living costs without losing easy access to home: residency turns on income you already have rather than a job offer, and permanent residence is available after four years with no language test. It is a poor fit if you are self-employed and payroll-tax sensitive, or if you want a state health system rather than your own wallet to absorb a medical emergency.

Mexico suits you if

Retirees with Social Security or a pension who want to roughly halve their housing costs and stay a few hours' flight from family
Remote workers paid in US dollars, since temporary residency explicitly allows work for a foreign employer paid from abroad
People who want a real path to permanent residence: four years of temporary residency qualifies you to apply, with no language or citizenship test
Families who need frequent US access, with daily direct flights from nearly every US hub and a shared land border

Think twice about

Currency risk cuts both ways. The peso averaged 19.24 to the dollar across 2025 and stood at 16.956 on 3 September 2026, so a fixed dollar income buys about 12% fewer pesos than the 2025 average
No US-Mexico social security totalization agreement, so self-employed Americans pay the full 15.3% US self-employment tax on top of any Mexican contributions
Medicare does not travel. You self-fund healthcare, buy Mexican private insurance, or accept IMSS with its pre-existing condition screening
A new INM fee tariff took effect on 1 January 2026, and consulate solvency thresholds are indexed to the UMA, which is reset every year
Safety, infrastructure and rule of law vary enormously between Mexican states. The US State Department issues advisories state by state rather than for the country as a whole
Gasoline is more expensive than in the US, and CFE electricity bills jump sharply once household consumption exceeds the subsidised tiers and moves onto the DAC tariff
Groceries are not the saving people expect. On OECD and World Bank like-for-like baskets Mexican food prices sit near 93 against the US at 100, so the household budget line that actually falls is rent and services, not the supermarket

Go deeper on Mexico

This page only compares. The country guide explains how each of these systems works and what you have to do about it.

Moving to Mexico from the USThe full guide: 6 residence routes, taxes, healthcare and practical setup.Cost of living in MexicoCategory-by-category price levels, rent and a worked monthly budget.Visas & residency in MexicoEvery route a US citizen can actually use, with costs and official links.Taxes in MexicoResidency triggers, the US filing obligation, treaties and FEIE.Healthcare in MexicoHow the system works, what foreigners can access, what cover costs.

Sources and review

Every figure for Mexico on this page comes from the sources below. The US baseline is held in one place site-wide and reviewed alongside them, so the same comparison run on another country page means the same thing.

What these numbers are. Several figures on this page could not be matched to a published statistic and are reasoned estimates. Treat them as directional and check the official sources before acting on them. Where a source entry says a value is derived, estimated or crowd-sourced, that is exactly what it is: no international body publishes a like-for-like index for every category, and private insurance premiums are not published at all in most countries. Rent figures are national market averages, so a capital city will run above them. How the dataset is built.

Nathan Brooks · Editor, Your New Country

Nathan builds and maintains the Your New Country dataset, reconciling figures from the OECD, Eurostat, the World Bank and national statistics offices, and reading each country’s immigration and tax guidance at the source before it is published.

Reads each country’s immigration, tax and health guidance in the original official source rather than in secondary coverage
Reconciles every published figure against OECD, Eurostat, World Bank and national statistics releases on a quarterly cycle
Publishes the derivation and the access date beside each number, and marks estimates as estimates

Data reviewed September 4, 2026 · source confidence: low ·methodology

United States vs Mexico