Alaska, known as the "The Last Frontier", is an expensive state due to remote location, but offset by no income or sales tax. Here is everything you need to know about the cost of living in the The Last Frontier — from housing and groceries to taxes, utilities, childcare, and what salary you actually need.
Here is what a typical month costs in Alaska for a single person earning the median income of $77,800/year:
Each category shows how Alaska compares to the national average. Green means cheaper, yellow means similar, orange/red means more expensive.
Adjust your salary to see a detailed monthly budget breakdown for living in Alaska.
Select a state to see how much salary you would need there to maintain the same lifestyle you have in Alaska.
The most popular cities for residents and newcomers in Alaska:
Housing is the single biggest expense in Alaska, as it is everywhere. The median home price in Alaska is $335,000, and the median rent for a one-bedroom apartment is $1,250/month. With a housing cost index of 118, Alaska housing is 18% more expensive than the national average.
Housing costs in Alaska are above average but manageable for households earning the median income. The 30% rule (spend no more than 30% of gross income on housing) is achievable in most areas.
Alaska is one of only 9 states with no state income tax. This is a major financial benefit — a household earning $77,800 saves approximately $4,668/year compared to a state with a 6% income tax rate. This extra take-home pay effectively reduces your cost of living and increases your purchasing power.
The average single person in Alaska spends approximately $520/month on groceries. A family of four can expect to spend $1,300-$1,560/month. The food cost index of 132 means groceries in Alaska are 32% above the national average.
Gas prices in Alaska average $3.85/gallon. For the average commuter driving 15,000 miles/year at 25 MPG, that is roughly $2,310/year in fuel costs.
Alaska healthcare costs are 36% above the national average (index: 136). The average annual healthcare cost per person in Alaska is approximately $8,160 including premiums and out-of-pocket expenses. Employer-sponsored health insurance covers the majority of working adults.
Infant daycare in Alaska averages $1,100/month ($13,200/year). This is a substantial but manageable expense for dual-income households. Many families in Alaska find that one parent staying home is more cost-effective when two or more children need daycare.
Alaska is a higher-cost state, but the higher expenses often come with higher incomes, better infrastructure, and more job opportunities. The median household income of $77,800 helps offset the 27% premium on living costs. No state income tax is a significant advantage at higher income levels.
See all Alaska financial calculators:
Alaska (AK) has a cost of living index of 127, meaning it is 27% more expensive than the US average. Housing is the biggest factor with an index of 118. The median rent is $1,250/month and the median home price is $335,000. Alaska ranks #46 out of 50 states for affordability (1 = cheapest).
For a single person, a comfortable salary in Alaska is approximately $101,140/year ($8,428/month). For a family of four, aim for $171,160/year. This covers housing at 30% of income, groceries ($520/mo), transportation, healthcare, and a 15% savings rate. The median household income in Alaska is $77,800.
The median rent for a one-bedroom apartment in Alaska is approximately $1,250/month. A two-bedroom averages $1,688/month. Rent varies significantly by city: Anchorage, Fairbanks, Juneau are the most popular metro areas. Housing costs in Alaska are above average — budget carefully.
Alaska is a more expensive state (COL index 127), but offers no state income tax, strong job markets and high median incomes ($77,800). Popular areas include Anchorage, Fairbanks, Juneau.
The most affordable areas in Alaska are typically smaller cities and rural areas away from the major metros. Within Alaska, costs can vary 20-40% between the most expensive city (Anchorage metro) and more affordable areas. Wasilla and Sitka tend to offer lower costs while still providing good amenities and job opportunities.
The average monthly grocery bill in Alaska for a single person is approximately $520 ($1,300 for a family of four). Alaska food costs are 32% above the national average. Shopping at Walmart, Aldi, and local discount stores can reduce this by 15-25%.
The average monthly electric bill in Alaska is approximately $195. Total utilities (electric, gas, water, internet) average $429/month. Alaska utilities are 52% above the national average. Extreme temperatures drive higher heating/cooling costs.
Alaska has NO state income tax, saving the average household $3,890-$6,224/year compared to states with typical income tax rates. This is one of only 9 states with no income tax. However, Alaska may collect more revenue through sales tax or property tax.