The '2.2' UK to AUS wage stat - original source?

[ksarah]

Hello everyone!

 

So great news, my hubby resigned but his company want to transfer him to Australia instead. While he was looking forward to an extended holiday it is very exciting that we won't (potentially) be diving heavily into our savings to keep the 4 of us afloat while he looks for work (senior IT) in Sydney.

 

His manager is in the initial planning phase of the transfer and we want to make sure that they don't just apply the current exchange rate to his current salary to work out what he'll earn in Oz. I see the statistic of multiplying your UK salary by a factor of 2.2 in order to work out what you should be aiming for in Oz to have the same quality of living often quoted on this forum. Does anyone know the origin/source of this stat?

 

As always, thanks in advance for your help in this!

[abz123]

It would have been based on data at some point in time, but there are professional companies (name escapes me at the moment) who publish indices for use for expats going to other countries around the world.

 

If your hubby's company is a decent size then I would imagine they will use something like this (or data from a recruitment agency) to determine what he is worth in salary terms.

[ABL275]

I don't think there was ever an original source, many people (including myself) just worked the numbers and a great many seem to have come back to around the 2.1-2.2 mark in recent years.

 

The simple answer is that for many years the dollar to pound exchange rate hovered around 2.2 (prior to that it had been around 2.8 for many years), but the feeling was that 2.2 was the recent long term exchange rate and even though Australia recently experienced a mining boom which pushed the exchange rate down to 1.8 (or even below 1.5 about a year ago), retail prices in Australia didn't just suddenly drop accordingly and were assumed to still be priced at an equivalent of 2.2 dollars per pound or thereabouts. If over the next few years the rate stays at about 1.8 such that prices in Australia rise only slowly in the next few years, then 1.8 will become the new long term exchange rate, but the signs are that it is creeping back up bit by bit.

 

Of course you could also list out your monthly expenses or weekly shopping and do a comparison of each in dollars and pounds.

[ksarah]

Thanks for the tips/clarification, as always, much appreciated. Here's hoping he gets that ratio in AUD.

[Guest]

The Economist 'Big Mac' Index currently shows the 'cost of living comparison' between the UK & Australia to be 1.87

 

It used to be higher but I expect cost of living increases in the UK have impacted it.

 

One thing to bear in mind is all of Australia isn't equal - head to Sydney, Melbourne or even Perth and you will need to earn more to have a good quality of life. Sydney & Melbourne are two of the most expensive cities in the world.

[ABL275]

Thanks for the tips/clarification, as always, much appreciated. Here's hoping he gets that ratio in AUD.

 

No problem. Just two other thoughts which you may already have addressed; if you have school-aged children you'll need to contribute towards their schooling (I think for NSW it's 30% of the nominal annual cost which currently seems to be around $10,000-$11,000 per child so it may cost you 30% x $11k x no. of children) - but your visa may stipulate a contribution waiver; and, many employers used to bridge the exchange rate gap a little by saying you'd be better off because of LAFHA (living away from home allowance where you could claim your rent and a subsistence allowance tax-free) but LAFHA is now restricted to Australians living in Australia so hopefully no-one will try and offer you that.

 

Good luck!

[buzzy--bee]

I've always thought it was more like 2.5

 

BB

[wolvesaussie]

I think 2.5 is a bit much.. maybe for rent but other things are not that much more. I was checking my weekly shop on my supermarket the other week.

[VERYSTORMY]

It varies a LOT by individual lifestyle. For some it will be almost 1:1 for others 3:1 or even higher. Most somewhere in the middle.

 

The issue you need to factor is that not every job in Oz is paid the same as it is in the UK as demand can be very different. Some will be much better off in Oz and some worse off.

[Guest guest73691]

Agree with VS that not every job will pay 2.2 X what you could expect in the UK - depends on what the job is, what the market in Aus is like for that job and also where in the UK you work. I doubt I'd be able to find a job paying 2.2 x what I could get paid working in London, as the market here just does not pay that much. But I earn a lot more than 2.2 X what I was being paid when I worked in Manchester. Though in my profession there has always been a big difference between what you can earn in London and what you can earn elsewhere in the UK.

[LKC]

To be honest, you would probably be better off having a look on http://www.seek.com.au to see what related/the same jobs have as a salary and then work out if you could afford it. If you use http://www.domain.com.au and http://www.realestate.com.au for an idea of rental costs, have a look at websites for supermarkets like Woolworths or Coles, and make a big spreadsheet including all costs, like food shopping, electricity, transport etc, and then look to see if you can afford it on the salary you could expect for his role. Make sure that you include all of the things that you currently buy/use etc in the UK, so as to ensure that you are comparing like with like. Include things like holidays and hobbies etc too, because those sorts of things make your lifestyle what it is.

[Parley]

I'm sure the approach used would be to survey the market rate for the comparable position in the Sydney market.

This is what companies do when setting their remuneration. They may have a policy of paying at the midpoint or higher of the market range for a Senior IT consultant in Sydney.

 

As suggested you can do similar research yourself to get an idea of what the role pays in Sydney.

[ksarah]

Thanks again everyone for your helpful advice, much appreciated.

 

We've done a fair bit of research into general costs and thankfully my children are citizens by descent so we can avoid the school fees scenario. My hubby's job equivalent rarely seems to be advertised (let alone with salary), we've been told that it's headhunter territory so a transfer would be awesome even if it's just to get us started. We now know that the managers have access to cost of living job role comparison data so it will be interesting to see what ratio they use.

 

Here's hoping we don't take a massive paycut!

[rammygirl]

If you put salary bands in to search seek you will get a better idea, they don't state the salary but you can search on it.

 

there are other comparative lists available we used one for the RSMS application, can't remember what it was called though listed jobs by sector grade and state with salary bands.

 

think it was hudson guide guide you have to register but it is free to download.

[robfromdublin]

The original source was based on median salaries between UK & Australia. i.e. median Australian salary = 2.2 * median UK salary

 

You can apply the same methodology to be more exact to your industry and/or location (e.g. median London salary to median Sydney salary, or median engineer salary to... you get the picture)