27 LPA in Tier 2 City Vs 40 LPA in Tier 1 City
With 8 years of experience, married and having a baby. Being the sole earner, which is a better choice for financial stability in long run : 27 LPA in a Tier 2 city or 40 LPA in a Tier 1 city?
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Tier 2 no doubt. Less cost of living, school fees less, no travel expenses, you can buy a land and manage it, wealth creation, can do a side hustle since it’s wfh
13 LPA is the diff = 1 L pm
Think, if you shift to tier 1, will your avg diff in monthly expenses, will be around 1L or not
If yes, no use of shifting
Depends what you want in life. Tier 1 cities offer much better infra compared to tier 2. And no, I am not saying about roads but instead medical infra, accessibility to whatever you need. On the other hand, tier 2 cities have much better peace. If its your hometown, then obviously no comparison.
between 27LPA and 40LPA, diff is 13LPA, now this difference is abobe 25Lakh tax limit so approx 30% will be eaten by tax. 8LPA is left, which means approx 75k per month.
Remember some portion of 75k will go to PF and NPS also, but not counting it because at the end its saving.
Now if you come to tier 1 city, this money will go in highly inflated living expenses (rent, travel, school fees etc.)
There are no monetary benefits, but peace of mind will be better in a tier 2 city.
Go for Tier 1 unless it's Mumbai. It will help you get higher package next time you switch.
Finally someone said it. M I was skimming thru the comment section to write this if no one else had written it earlier. If you take the 27l offer in the tier 2city.. Your growth prospects will be limited to the glass ceiling that evry t2 city has.. It all comes down to what you want from life.
Being in a Tier-1 city often leads to a significantly better pay scale and faster career progression. If you have bigger ambitions and foresee higher financial responsibilities in the future, opting for a higher package in a Tier-1 city could be a wise move.
While it’s true that living costs—especially housing, schooling, and lifestyle—are higher, the overall exposure, network, and opportunities are unmatched. For instance, the quality of education your child can receive, not just academically but through peer influence and extracurricular exposure, is often far superior in Tier-1 cities.
Moreover, staying in a Tier-2 city might give you a cost advantage initially, but in the long run, it could limit your access to top-tier professional opportunities, especially in industries that thrive in metro ecosystems. Access to better healthcare, faster innovation, mentorship networks, and cultural experiences also adds to the value proposition of living in a metro.
Ultimately, it's not just about expenses—it's about long-term growth, exposure, and the environment you and your family are surrounded by. If your goals align with growth, global thinking, and access to premium opportunities, a Tier-1 city is an investment worth considering.
It's chasing money, which is different than earning money. I have seen people having crores of loans in Tier 1 city, while people in tier 2 city are debt free, almost all my friends have some shops or other business alongside jobs.
Financial stability:
- When you join 27lpa.. after working for a year or 2 you might equate 40lpa..
- With 27lpa, you get 2lpa per month.. with 40lpa, 3lpa per month,
Idk what maths you and the people here are doing.. you are losing 33% straight away by not going with 40lpa.
Even this is your peak age to work.. balance things out and priorities work.. I would say. After 4-5 years.. you might want to switch to comfortable job.. so then switch to tier 2 City.. at that time.. you would have better CTC..
Imagine, after 5 years, 27 might become 40-50.. but similarly 40 might get 70-80.. and after moving to tier 2.. you will have the comparing CTC with 70lpa and maybe you can negotiate to 60.. numbers are imaginary but you should get the math..
Don't think of expense.. you might lose the expense when you stay in tier 1. When comparing expense.. consider both.. you might be spending 50k in tier 2 but in tier 1 you may spend 80k or 100k.. so max different might not be more than 50k.. Still you would be saving 13% of your CTC and very few give such hike..
40LPA doesn't give 3lac per month. There will be tax, EPF, NPS deduction, my base pay is more than 40lakh, in hand is just above 2lac.
If tier 2 is your home town then definitely that otherwise tier 1
finally what will go with you is happiness, the purpose of getting a high salary is happiness but if you are still unhappy then there is no meaning of high income, people in tier-1 cities spend money on purchasing happiness via movies, theaters, stand-up comedy while in tier-2 cities nothing required such as if you have 3-4 good friends, tier-2 cities people are fully supported not selfish as tier-1 cities, cost effective, markets are a bit cheap, school fees, less polution, kya katoge itne paiso ka jab sab yahi rah jaana hai, utna kamao jitne me jindgi acche se kat jaaye, doosro ko na dekho, apne baare me socho.