Hard Yakka and the Cost of Living in Australia

ANZ NovemberCurrent Rates

  • Aussie yakka: One hour of hard yakka buys $35.74 of stuff.
  • The UK yakka: One hour of hard yakka buys £13.64 of stuff.

Click on the following link to see my original article on the hard yakka.

As I mentioned in my article How Expensive is Australia last month, I realised I hadn’t written very much about the cost of living in Australia for my monthly column in Australia and New Zealand magazine.

This is the second in a trilogy of articles and it explains the concept I first introduced on this blog almost 2 years ago to the day, the Hard Yakka.

Yakka, by the way, derived from the word “yaga”, means work and comes from the Yagara indigenous language of the Brisbane region. Hard yaga or yakka therefore means hard work…

Hard work 1No, harder than that…

Harder WorkOh, that’ll have to do. Let’s move on, shall we? Here’s the article which appeared in last month’s issue…

The Hard Yakka

A lot of people say Australia is expensive, so is it? What’s the truth behind the cost of living in Australia? I have to say, when we first arrived in Oz we were flabbergasted at the prices, everything seemed so expensive. We wondered how people could possibly afford to live here and thought “What have we done?”

Since then, the pound has weakened dramatically against the Aussie dollar, so Brits arriving today are probably horrified at the prices. But they shouldn’t be, and it does take a while for the penny (or cent) to drop, but maybe I could speed up that process. Last month I mentioned the hard yakka, time for me to explain exactly what that is.

Here’s what you would probably do to compare prices between Australia and the UK.

Let’s assume you want to buy some “stuff”. First, you check how much that stuff costs in the UK. Let’s say its £100. Then you check out the price of the same stuff in Australia and discover its $200. To compare, you work out how many of your great British pounds at the current exchange rate (say 1 GBP to 1.5 AUD) you would need to get $200 AUD, so you can buy said stuff in Australia instead of the UK.

Aargh!’ you say, “That’s £133!

You now think Australia is expensive because you continue to check more stuff and get similar results. The reality though, is the cost of stuff in Australia has nothing to do with pounds at all.

Working with salaries from each country, we don’t have to express the cost of stuff in pounds or dollars; we can use the hard yakka. According to the Guardian, average full-time income for 2011 was £26,244 in the UK and the Australian Bureau of Statistics says it was $68,775 in Australia.

The economists and statisticians among you will want to know whether that’s “mean”, “median” or “average”, but none of that really matters. The beauty of my experiment is you don’t have to concern yourself whether these figures are right or wrong, I’m just going to show you how it works.

What you can do though is compare your current UK salary with what you might expect if you were to move to Australia. Based on the figures I’ve mentioned and ignoring silly things like taxes, the average UK full-time worker earns £13.64 per hour whilst his Aussie counterpart earns $35.74 based on a 37 hour week.

Forget currencies for one moment; how long does the UK guy have to work to buy his £100 stuff?

That would be 100 divided by 13.64 which is 7.33 hours. The Australian works 200 divided by 35.74, which is 5.60 hours. That then, is the hard yakka. It’s how long you need to work to buy stuff. In this example, stuff that in Australia cost 5.6 hard yakkas, would have set you back 7.33 hard yakkas in the UK.

Now which country is more expensive?

Australia then, isn’t an expensive country. But for those of you thinking of making the move here, there are winners and losers in all this. Next month I’ll explain who they are and also run through a few things to help you to calculate whether you’d be better off here, or not.

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{ 20 comments… add one }
  • Lyndsay August 3, 2018, 11:26 pm |

    Hi Bob! Thank you for the most informative blog – you rock dude! This yakka thing has my non-mathematically engineered brain in a fuzz… help please! I am struggling to work it out to our South African Rand. I am trying to work out how it compares & what the equivalent would be for a person earning around R1.5mil pa in Australian $’s. It’s so hard trying to figure out which jobs would be worthwhile applying for when there are such broad salary brackets being advertised for similar job titles. The yakka seems to be a great tool to compare like with like and help us get our ducks in a row (we have done our EOI for PR visas and are researching the job market for when the time comes…). Thanks Bob!

    • BobinOz August 6, 2018, 6:52 pm |

      Thanks Lindsay, glad you like 🙂

      Okay, let’s see if I can help. According to my calculator, R1.5 mil equates to 1,500,000÷52÷40 (for weeks and hours) = 721 Rand/hour, so that’s the yakka value in your currency, that is to say how much you will earn in one hour’s work at that salary (ignoring silly things like taxes and other stoppages).

      Now, if you can, find out how much that same person would earn per hour here in Australia, again before taxes and stoppages as this is simply for basic comparison purposes. Then, to compare prices, look at the cost of stuff is South Africa and divide by 721 to see how many hours work you need to do to buy that thing. Then do the same for what the stuff costs here in Australia and divided by the Australian earnings hourly rate that you worked out earlier.

      Simple? I hope so.

      Once you know the hourly rates for both countries doing cost comparisons in this way becomes quite quick and easy to do. Hope that helps, good luck, Bob

  • james July 25, 2014, 8:12 pm |

    Hi Bob, I like the way you have presented the cost of living.

    However doing my calculations on pre taxation is a lot different to after tax or disposable income.

    Here are my calculations-
    UK pre tax

    14141 / 52 = 271.95 / 37 = 7.35

    rent incl bills 400 per month (shared house)

    400 / 7.35 = 54.4 yakka

    AUS pre tax

    49400 / 52 = 950 / 37 = 25.67

    rent incl bills 1400 per month (sydney shared house)

    1400 / 25.67 = 54.5 yakka

    As you can see it is virtually the same.

    UK after tax

    1050 monthly take home

    1050 x 12 = 12600

    12600 / 52 = 242.30 / 37 = 6.54

    400 rent incl bills (shared house)

    400 / 6.54 = 61.16 yakka

    AUS after tax

    2814 monthly take home (non resident) (based on http://www.paycalculator.com.au)

    2814 x 12 = 33768

    33768 / 52 = 649.38 / 37 = 17.55

    rent incl bills 1400 per month (sydney shared house)

    1400 / 17.55 = 79.77 yakka

    Now there is a big difference.

    These are based on my current earnings in England and what i will be earning when i arrive in Aus in a few months time.

    The yakka system is a great way to work out a cost of living comparison but i think that you need to do it after tax for a true representation.

    Thanks for the great website Bob.

    • BobinOz July 25, 2014, 10:38 pm |

      Glad you like the yakka James, good to see you have used it to work out how well, or not, you might be if you moved here.

      The problem with doing the hard yakka after-tax, and you are a great example yourself, is that everybody’s tax rates are different. As a non-resident I believe you will be paying a higher level of tax than is normal, and that in itself explains the big difference between your before tax and after-tax figures.

      Of course, the big difference is that your accommodation here in Sydney is going to cost you about twice as much as you currently paying in the UK, but even so, the difference isn’t as big as you would expect it to be because salary wise you are much better off here.

      I hope this hasn’t put you off of coming to Australia.

      Good luck, Bob

      • james July 27, 2014, 1:13 am |

        Thanks for the response Bob.

        No it won’t be putting me off as you have stated in other posts the costs of living vary with some costs being more expensive and others being cheaper.

        You also mention that if your wages in Aus are double of that in the UK then you should have the same standard of living.

        So on that assumption i’ll be skint in the sunshine instead of the rain. 🙂

        I have a job sponsorship offer and i’m waiting for the visa to be processed so it’s just a matter of time, then there will be another whinging pom in Australia.

        Enjoy the sunshine Bob.

        • BobinOz July 28, 2014, 6:41 pm |

          That’s good to hear, I hope everything runs smoothly and we see you here, in the sunshine, sometime soon.

          Good luck, Bob

  • Margarida February 9, 2014, 1:20 am |

    Hi Bob,
    We are thinking of moving to Coolangatta from Portugal…
    Not being a wiz at maths, do you think you could make a comparison with euros???? Thank you

    • BobinOz February 10, 2014, 2:31 pm |

      As things stand today, one euro is equivalent to 83p. So one euro is worth more than one GBP, so if you can manage to earn twice the amount in AUD as you currently do in Euros, or somewhere close to that, that should be equivalent to my rule of thumb above.

      That said though, I know nothing about the cost of living in Portugal so I can’t possibly make a comparison with that. Good luck, Bob

      • Margarida February 11, 2014, 1:50 am |

        Thank you Bob for your comment and blog…
        you have no idea (or you do) how much it has been helpfull in this quest of moving to Australia.
        Here is “how” i live…
        Iam a primary school teacher and i earn roughly 1.100 euros (a month…we earn on a monthly basis). I have a mortgage on my house of which i pay 400 euros per month. Bought it 8 years ago for 125 thousand euros, but i live in the interior part of Portugal (much more expensive in Lisbon, the capital, around 300 thousand)
        Going out for dinner, will cost around 8 euros a person (in a cheap place) around 15 to 30 euros(in a fancier one).
        My children are both in public schools, so they only pay for lunch, which is 1,46 euros a day.
        Going to the cinema costs around 6,50 a ticket, with popcorn and drink it goes up to 12 euros…
        Electricity bill, around 80 euros a month (4 people)…water is 20 euros and gas is (well this bill was 320 euros, as it is FREEZING, and our radiators work on gas).
        Diesel is at 1,37 euros and petrol (don´t know if you call the other kind petrol…) is 1,57….

        It is just (for anyone who is curious) to give you a very, very rough guide on how the cost of living in Portugal is….

        Once again, thank you for your help, for your blog and experiences!!! 🙂

        One more question, do you (or anyone) know how much a station manager, and receptionist earn at EUROPCAR in Australia??? Thank you!!!

        • BobinOz February 11, 2014, 5:33 pm |

          Thanks for your figures for Portugal Margarida, it’s always good to compare country to country. Things do not appear to be as cheap as one would hope over there, in particular your housing looks quite expensive.

          As for the cinema, here in Brisbane we can go to the Southbank cinema in the city for $8.50 AUD per adult and $4.50 AUD per child, at current exchange rates that’s equivalent to about 5.60 euros and 3 euros. They also throw in up to 4 hours worth of free secure parking in the underground car park as part of the deal. Not bad for the city.

          Not sure how much those Europecar workers might get, can anyone else reading this help Margarida out on that one?

          Cheers, Bob

  • surfersj December 11, 2013, 5:48 am |

    I believe the Hard Yakka comments re cost of living are spot on but sadly, there is one category of OZ wannabees for which this isn’t so simple!
    I am desperate to make the move to Brisbane in the near future – (once funds improve) – to join my daughter and toddler grandson, and baby number two on the way! It is a huge emotional pull to get over there but if/when I make the move, we will be 65 years of age and retired. Although on a modest private pension, we will be on a government pension that is frozen which I think is “criminal” Effectively, our pension income will be coming out of the UK and in the years to come in real terms, will fall behind the OZ cost of living. That’s before talking about exchange rates which thankfully, have recovered significantly since we were there back in May – from 1.50 to 1.80 now – long may it continue!
    So, the choice will be to be financially comfortable retired in the UK but unhappy, or skint and happy living in OZ!

  • Chris Newbold December 10, 2012, 10:19 pm |

    Bob, Its always a massive relief to me when I read your posts on cost of living out there. We are moving to Perth in August and I keep being told how expensive we are going to find it, it’s a bit of a worry with three young children. Im going from a £40K job over here to a $98K job over there which seesms like a lot but the last thing we want to do is move over there and struggle.

    Using your Hard Yakka method makes a lot more sense though, a friend out there keeps telling me to stop thinking in Pounds and Dollars and that seems to make things a lot more affordable.

    Bring on 22nd August 2013!!!

    • BobinOz December 11, 2012, 5:10 pm |

      Glad my posts have been some comfort, I truly believe on those figures you will be no worse off here than in the UK. Would be interesting to hear how my theory works out in practice for you though when you actually get here next year. Maybe you can get back to us to let us know how you get on?

      The biggest variable, I would think, would be how much rent/mortgage you have to pay here compared with the UK, obviously if you are moving from a three bed semi in the UK and want to live in a five bedroom detached beach house in Perth, then you might struggle a bit 🙂

      Hope the move goes well for you.

  • Geraldine December 10, 2012, 9:13 am |

    Looking forward to next months winners and losers, keeping fingers crossed that we are in the winners category .

    • BobinOz December 10, 2012, 8:02 pm |

      I hope you fall into the winners category too, although, strangely, there are benefits to being a loser too. Anyway, you’ll find out next month 🙂

  • Tiffany Ferguson December 8, 2012, 12:33 am |

    Wow, nice way of looking at it. I’ve always heard that AU was sooo expensive, but glad to find out the truth.

    • BobinOz December 8, 2012, 8:08 pm |

      Thanks Tiffany, it’s easy to see why some people think Australia is very expensive, but when you look at the whole picture, it’s a different story. Cheers!

      • john burton February 5, 2014, 5:27 am |

        this is an excellent way of describing it!!
        im researching moving to australia now and and had the same idea in my head but couldnt work it out properly due to lack of info.
        you NAILED it
        ps im on £6.31 per hour over in the uk and the highest iv ever been on is £7.50 despite having to seperate skilled trades!!

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