In a previous post about the cost of living in Australia, one of my readers, Shawn, suggested that the true cost of living could only be calculated after comparing average wages between the two countries.
This was a very valid point and one I am going to address today. Once again, apologies to any of my readers who are not from the UK, but I hope you can at least use the information about Australian average salaries to compare them to those currently available where you live.
If you want to check out other occupations for yourself, the full list is available here for the Australian salaries and here for the UK incomes list.
Please note that I have added 6% to all UK incomes as the figures available to me were from November 2007. I think that is more than generous.
The Australian incomes were taken from an employment website and based on data from advertised jobs and claims, therefore, to be current.
Here is what I found:
I tried to be random in selecting occupations to compare, my “system” revolved purely around trying to find occupations that sounded exactly the same by their description. But there was one occupation I removed from the list which I will declare here:
Estate Agents were listed as having an average salary of $125,427 in Australia & just £29,544 in the UK. The Australian one was described as “Property and Real Estate, Residential Sales”, whereas the UK one was listed as “Estate agents and auctioneers”. To me they looked like the same occupation but the salary difference was huge. So I removed it. My guess was the Australian one was based on achieving some kind of massive sales target to get the extra commission.
Despite that, with the pound tumbling faster than a drunkard falling down a downward moving escalator, the differences between the two countries for average salaries is currently huge.
First I took the £315,649 and multiplied it by the current exchange rate of 1.866 AUD/GBP. So, if you did all 10 of these jobs in the UK you would have earned £589,190.42. That’s a staggering $142,760.58 LESS than you would have earned here in Australia.
On those figures, Australian salaries are 24% higher than those of the UK.
It is probably a more accurate figure to look at the average salaries across all occupations which are listed as a $62,270 in Australia according to The Australian Bureau of Statistics and £25,331 according to Government Statistic UK.
So £25,331 times 1.866 for the exchange rate becomes $47,267. So that’s $15,003 less than the Australian average and that suggests that the average Australian wage is in fact 31.7% higher than in England.
I never claim that my “cost of living in Australia” comparisons are the yardstick by which you should base all of your migratory decisions, they are more of a “no smoke without fire” guide.
But I think we can safely conclude from the above exercise that salaries and wages here in Australia are greater than those in the UK.
I have not been surprised by these findings, I think I have mentioned elsewhere that I believed wages were high here, I know, I tried to get a gardener. I ended up going to Bunnings, buying the gear and doing it myself!
But with these findings I think we can now all agree that if something appears to cost the same or cheaper here in Australia, it really is.
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{ 13 comments… read them below or add one }
Hi BobinOz,
Apologies for not seeing this before the other day. I kept looking out for it as I was interested to see what you found, but somehow missed it until looking through your Oz vs UK comparisons. This is fantastic and I just left another message on your grocery comparison. Thanks for the information and I’m of the opinion you can use 2.3 (from your list of occupational wages) as a good guide to true affordability i.e. it has to cost 2.3 times what the UK price is before it is more expensive in Australia. I measure affordability as the true buying power of your income in local currency (not how much a dollar buys such as “burgernomics”). I hope people find this useful and thanks again for the great site!
Shawn
Hi Shawn
It was your comment on the cost of groceries post that inspired me to write this one. So thank you for that. The two do clearly go hand in hand.
As I mentioned on the other post, 2.3 works well as an average but will vary depending on your occupation. For example, managers (retail) appear to be the only type of worker on the list above that will be worse off here in Australia. They won’t agree with 2.3.
Anyone wanting to know a more accurate figure would need to drill down exactly what their new salary was going to be here in Australia and work out their spending habits are so they can calculate the cost of the goods they will be buying regularly.
Or they can do what we did. Just turn up and find out as you go along.
cheers
Bob
HI again Bob,
Just looking thru this and I cant help wondering what the difference is in take home pay, the reason being that in UK with NI and tax it works out to a rough amount of 30% of your wage. Having a look on the internet I cant see anything concrete but some sites suggest tax is not more than 15% in Oz.
Is that correct or are we living in cuckoo land?
If so then it means there is a huge difference in wages.
ta
James
Hi James
Sorry to disappoint you, but yes, you are living in cuckoo land. It works much the same here as it does in England, check out my post about income tax, it should give you some idea about your possible deductions.
If it is any consolation, the weather and the beaches here in Australia are much better than in cuckoo land. Worth paying a little extra tax for.
Cheers
Lets not forget Bob that if you have a child here they give you $5K and if you’re family has only one income of under $70Kper year then you get $155pw family assistance.
We have been shocked to findout what the Australian Government class as “low income” (lol). I think my $70K a year is a good income and even without the Government money we have a great life.
Going back….never
Hi Matt
Well, I’m a bit too old to start having new children so I’m afraid I’ll have to miss out on that 5K. I had heard a rumour that the low income threshold was around $40,000, but 70K? That is quite generous.
Australia, it gets better every day doesn’t it? Sun, sand, beach, and free tinnies for the low paid. Going back? No chance!
Those government stat links you provided don’t seem to be comparing like with like, the UK figure is the median full time salary while the oz figure is the mean average which will always be higher.
UK mean average for full time job is about £31k which is A$53k at the moment.
Well the above teacher salaries are slightly out but I guess that depends on how long teaching.
My wife has taught 3 yrs and in UK was on a very high £27k (in a state school would have been £25k) and since moving here will be on $68k by the end of the year
Hi MJ
Yes, I see what you mean. I appear to have quoted median salaries from the UK government. I stand corrected.
But I have to say that your estimate of £31,000 per annum as an average (mean) salary seems very high. Where did you get that figure from?
There is an interesting article about “average salaries” from the BBC here.
He suggests it was around £24,000 a year in 2008.
The Guardian, from an article dated November last year states that the “median” salary for 2009 was £25,816. They prefered median because, as they said “We’ve gone for the median figure, because it’s a better indicator than the average which can be distorted by high or low individuals”.
You can read that article here
But we need to compare like for like, so if you click through for the full data, the average (mean) salary figure quoted is £26,470
So I’d say £26,470 is a safe bet.
Doing the maths at todays exchange rate of 1.79 AUD/Pound £26,470 is $47,381 which is no different from the median figure that I quoted originally.
Looks to me like we’re back where we started with Australian salaries still more than 30% higher than those in the UK.
Hi James
Yes, the above salaries are only a very rough guide.
But your real life example perfectly backs up the data that I have researched. Your wife’s salary of £27,000 in the UK would have been equivalent to around $48,000 here at current exchange rates. But she is on $68,000 a year here.
That’s about a 40% increase on the old UK salary. So my estimate of around 30% doesn’t seem too inaccurate.
I hope you are all settling in and loving it.
Cheers
Bob
In response to MJ above….
MJ did answer my question about where he got those annual salary figures from, but he posted it over at our discussion about house prices.
But this is what he said…..
Hi bob, hope you’re enjoying the sun.
I got that average figure from the annual survey of hours and earnings 2009.
http://www.statistics.gov.uk/downloads/theme_labour/ASHE-2009/2009_all_employees.pdf
Just click on the ‘annual gross’ link and select the ‘full time’ tab, it gives both mean and median figures.
————————-
I checked it out and here is my answer…..
The difference between 26K and 31K is enormous so somebody has got it wrong. The PDF/excel documents you have given a link to look genuine but even so, I found a discrepancy.
Look for exactly the same criteria but under weekly pay and it says the £570 per week. The notes say this assumes no time off at all. So if I multiply it by 52 weeks, (assuming these people do not lose money for holiday time) it’s still only comes to £29,640.
So for annual salary they’re saying the mean average is £31,916 but if you are paid weekly and have no time off it reduces by £2000 per annum. That sounds a bit strange to me.
The criteria for the annual salary average states that it is for “employees on adult rates who have been in the same job for more than a year”. I think that probably makes a really big difference to the real average annual salary is in the UK. Anyone who has been in their job more than one year is probably already enjoyed one pay rise.
But as they say, with statistics, you can prove anything you want.
So I’m sticking to my guns and continue to claim that salaries here are definitely higher than they are in the UK and probably by something like 30%.
My research suggests that an adult supermarket shelf stacker at Coles (Australian supermarket) gets $17.47 per hour or $664 a week compared with £6.08 per hour over a Sainsbury’s in the UK. I only use this example because it is a very good “like-for-like” case. Can anyone backup this info? Please step in if you can.
Oh yes, I agree that at $1.8/£ Aussie wages are higher, but I’d also say that the cost of living is too.
At 2.1 or 2.2 though, I reckon they’d both be pretty similar.
When I was in oz a few years ago I was getting 2.8 to the pound and it was definitely cheaper than back home but wages were also less. Even at those rates though I remember a few things that were no cheaper than the UK, books clothes and beer in pubs spring to mind.
Anyway, I reckon that it’s perfectly possible to have a decent job paying enough money for a nice lifestyle in both countries so both come out pretty well on that score compared to most of the world.
Ps I think you’re looking at the ‘excluding overtime’ weekly figure. Including overtime the weekly mean is 587 but that doesn’t come to 31916 either so maybe that is a mistake, I don’t know.
Yes, the bottom line is if you have a half decent job in either country you will live a perfectly good lifestyle.
The value of the pound versus the Aussie dollar makes a big difference of course if you are emigrating and bringing your English money with you. But for Australians working here, it matters not whether its 1.8, 2.2, or even 2.5.
Similarly, it doesn’t matter for English people who have no intention of ever coming to Australia. They don’t care what the exchange rate is. All that matters is what can I buy with the money I earn.
And on that score, there really is very little difference between the two countries. There are swings and roundabouts. For example, you will get a bigger house here on more land, you will be able to drive a 4×4 and afford to put petrol in it. But you will have to contribute to your medical care and yes, books are more expensive.
So for me, the cost of living isn’t an issue. The issue is, which country do you prefer to live in? Providing you can get work in both countries you will be fine whatever country you choose.