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Where is it more expensive to live in 2023? Israel or the USA? 

   04.01.2023 | Yishai Gelb
Image by Sander Crombach

The short answer is that the Cost of living in Israel is, on average, 4.8% higher than in the United States. On top of that, the average American salary is 60% higher than that in Israel.

Let’s dive into the numbers and see where you’ll end up spending more in Israel, and what will cost you less than in the USA.


Summing up the cost of living, this report will take into account the price at the supermarket, transportation, utilities, childcare, clothing, housing, leisure & restaurants, and the difference in salaries. Let's get started!


At the supermarket, on average you will pay 7.4% more in the USA than in Israel, though it depends on what you buy. For example, milk, Cheese, Beef, and eggs are cheaper in the USA, while rice, chicken, fruits & vegetables, and wine are cheaper in Israel. 


Transportation will cost you more in Israel than in the USA by a large margin. While public transportation is close to 12% cheaper in Israel, owning and operating a private car is wildly more expensive in Israel. An average sedan will cost 70% more than it does in the USA, and the price of gas is on average double the price in Israel.


Your utilities will cost you more in Israel than it does in the USA. The average price for basics, including Electricity, Heating, Cooling, Water and garbage are on average $230 in Israel, while in the USA you’ll pay closer to $180 per month. On the other hand, internet and cellular services cost around $28 in Israel, while in the USA they reach close to $70. Combining both basics and the internet, the price in Israel and the USA come out to be almost equal.


Private Preschool or Kindergarten, for a full day for one child, is on average 25% less expensive in Israel than it is in the USA. Clothing is close to 45% more expensive in Israel than it is in the USA when taking into consideration the average price for a pair of jeans and casual pants, summer dresses and skirts, and sports and dress shoes. In restaurants, you will pay more in Israel than you will in the USA. A McMeal at Mcdonald's costs $15.5 in Israel compared with $8.9 in the US. A meal in an average restaurant will cost you $18.4 in Israel, compared with $17 in the USA. A beer in a bar costs around $8 in Israel, while in the USA you’ll pay only $5.


Housing prices are quite interesting when looking at the cost to rent as opposed to the purchase price of a house. In Israel, you will pay around $8000 per square meter (3.2 feet per meter) in the city center, and $6500 outside the center. In the USA, you’ll pay $4400 per square meter in the city center and $3000 outside the center. Meaning the price of purchasing a house in Israel is around double! However, rent is a different story altogether. In the USA, a 3 bedroom apartment will cost between $2200-$2800, while in Israel, rent for a similarly sized apartment costs between $1400-$1800. 


The biggest factor that makes a difference is the salary, which is considerably higher in the US. The average wage in Israel after tax is $2500, while in the US you’ll earn on average $4100. 

Taking these measures into consideration, in Israel, a family of four estimated monthly cost is 3,678.2$, while in the USA, it is 3,633. Meaning the cost of living is marginally higher in Israel than it is in the USA. However, some factors need to be taken into consideration. First, the average American makes close to 60% more doing the same job allowing more money to go into savings or a more luxurious life. On the other hand, this paper didn't take into consideration private Jewish schools and higher education in the USA as well as health insurance which cost a lot more in the USA than they do in Israel. 


In conclusion, It could be that it is most economical to rent and live in Israel while renting your home in the USA while making an American salary. This arrangement gives you a relatively high income from rent in the US while paying relatively low rent in Israel and earning a higher income relative to the cost of living. Of course, many factors go into choosing where to live, economics is just one factor. The location within the USA and Israel also differ greatly and could have an impact on the cost of living. On average, Israel has become an expensive place to live in, but definitely is an amazing place to live. 

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