big mac

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Find out what your salary is in different countries with this Big Mac index calculator

Current salary and currency

Target currency

The Big Mac Index

Exchange Value

Actual Purchasing Power

What is the Big Mac index?

Invented in 1986 by The Economist, the index monitors the prices of Big Mac in various countries around the world and compares them according to the theory of purchasing power parity. This converter uses the Big Mac prices data to calculate the "correct" price ratio between a given set of countries, that is the price at which purchasing power parity exists.

Lets say a big mac costs $5 in the USA. But if you go to Germany you can buy the same thing. Will it cost exactly $5 but in Euros (ignoring tax)? Maybe not. McDonalds knows that people in different countries are willing to pay different amounts of money for the same thing so they adjust their prices accordingly.

The econimist created this big mac index as an easy measure of how much a country's people will spend - Purchasing power.

What the numbers mean?

The Big Mac Index

This is what the amount in the foreign currency should be, assuming that the countries have purchasing power parity. At this exchange rate Big Mac costs the same in both countries.

In other words, if you'd work in a target country, this is how much money you'd need to sustain your lifestyle in the current country.

If The Big Mac Index lower than Exchange Value, that means that the target currency is undervaluated

Exchange Value

This is the converted amount according to the market exchange rates.

Actual Purchasing Power

This is how much money you'd need to buy the same amount of Big Macs in your current country. In other words, to sustain the lifestyle as you'd have in a target country, you'd need to earn this salary in the current country. Thus, having the provided salary in your current country would be the same as having the amount of Actual Purchasing Power in your target country