These days, there's a question I hear quite often: "If I move to a cheaper place while keeping my job, will my salary be cut?"

Honestly, I had the same concern a few years ago, so when I get this question, I feel a bit relieved and have a lot to say.

Especially in Hawaii, many people tired of the high housing prices in Honolulu are looking towards places like Hilo on the Big Island. Some are even moving to the islands while working remotely from the mainland.

To cut to the chase, the answer is "it varies by company." This isn't just wordplay; the policies can be extremely different.

A prime example is Google. In August 2021, Reuters reported that they obtained a screenshot of Google's internal salary calculator.

According to that, an employee living in Stamford, Connecticut, which is an hour away by train from the New York office, would earn 15% less if they switched to remote work. Meanwhile, a colleague commuting from the same area to the New York office would keep their salary unchanged.

There were also differences of 5% to 10% within the Seattle, Boston, and San Francisco areas. Employee interviews indicated that even if someone moved from San Francisco to a similarly expensive place like Lake Tahoe, they could see cuts of up to 25%.

Google's stance was clear: salaries are based on the original work location, and they aim to pay at the top level for that local market.

In the same report, Facebook and Twitter were also mentioned as companies that adjust salaries for remote employees moving to cheaper areas.

GitLab officially uses something called a "location factor." They set San Francisco as the baseline and apply coefficients based on local market wage data.

Additionally, if you plan to move, you need to inform your manager, and failing to do so could result in penalties, according to reports. It's best not to hide this information from the start.

On the flip side, there are clear counterexamples. Reddit announced in 2020 that they would eliminate regional salary bands within the U.S. and would pay based on the high-cost areas like San Francisco or New York, regardless of where employees live.

The head of HR at Zillow stated that long-term earnings are determined by performance, not location.

Airbnb also announced in 2022 that salaries would not change regardless of where employees moved within the U.S. This was quite a hot topic at the time.

However, these policies are based on the announcements made at that time. You should verify with your company's handbook to see if they are still in effect.

So, if your salary is cut, how much can you expect it to decrease? According to data modeled by Glassdoor across 30 cities, the average base salary for software engineers leaving San Francisco is estimated to drop by 24.8%.

I was a bit surprised when I first saw this number. A quarter is not a small amount. Of course, this is an estimate based on regional market wage differences, not actual salary records.

There's a trap that those moving to Hawaii should be aware of. If you only look at housing prices and think it's a "cheap place," you might be in for a rude awakening.

Hawaii is known for its high electricity costs, and groceries are more expensive because they have to be shipped in. Many places are also difficult to live in without a car, which should be factored into your calculations.

You can't ignore state income tax either. Hawaii has 12 brackets, with the highest rate at 11%, so if you're coming from a state with no income tax, you'll need to recalculate your take-home pay.

The time difference can also be significant. If you're working with an East Coast team, early morning meetings become the norm. This is a cost that can't be quantified in monetary terms, making it even more daunting.

I'll share the steps I took when I was grappling with this issue. There was nothing grand about it; it was just three straightforward steps.

First, I looked for the geo pay and relocation sections in the company handbook and confirmed it in writing. What I heard verbally later proved to be useless.

Second, I emailed HR to ask, "If I move to this address, will my salary band change?" and got a written response.

Even if HR responds that it's "subject to adjustment," that's not the end of the conversation. If your role is hard to replace, there may be room to request to maintain your current salary or to negotiate a gradual adjustment. Asking is free, after all.

Third, I compared the remaining money after deducting taxes, electricity, food costs, and round-trip airfare to the mainland from the potential reduced salary with my current situation.

My stance is clear: I absolutely do not recommend moving without informing the company.

If your address changes, the state withholding tax changes, and ultimately, the company will find out. Losing trust at that point is a much bigger loss than a few percentage points off your salary.

If my salary is reduced but my quality of life improves significantly, I would lean towards making the move. However, I would do so only after confirming the numbers. Dream big, calculate carefully; that's my principle.