Questions on money?

[seanOZ]

Hi all, on SAAustralia.

I hope that you are well and ready for Christmas ;-) …

I have a couple of general questions about money and moving across to AUS & how things work over there?

1 ) can someone explain to me what is the super tax with the salary and how does it work.

2) I have potentially been offered a job within Melbourne in the event industry. The general discussion around salary is that I will receive a basic of approximately 55K for the year. And I can expect to make approximately 15k in overtime. Giving me a total of 70K. Now my question, is can a family of four (Dad, Mom 3 year old girl and 7 month old boy) live on this type of income in Melbourne.

I have been told that this definitely is doable? I am currently in the process of trying to put together a very comprehensive budget and come back with a counter offer but if I could get some detailed information on what the actual costs on the ground is like it will definitely help.

3) What were some of your initial expenses regardless of whether there were big or small that you had to deal with when you first arrived in Australia to get up and running? Like buying a car. Speaking of cars, how does one go about doing this. And what will a car of approximately $15k cost you in repayments per month?

Thanks

Sean

[MrandMrsK]

HI Seanmoss

I cant answer many of your questions, but will help where I can.

Super is your provident fund. Its full name is a superannuation fund that you and your employer contributes to in prep for your retirement. I think it is compulsory for an employer to contribute to. They usually have a preferred fund to put the money into, but you can choose if you want, or just go with what they have.

As far as Im concerned, that salary sounds pretty good. But Im not sure what people in that are or industry earn.

When we arrived, we decided to buy a car cash. Just cos we did not have a job to use when getting a loan. We used the money from the sale of our two cars in RSA, and purchased a brand new suzuki sx4 for $18 000. Perfect for us, and no repayments. Look out for deals that are referred to as "drive away" as you dont have to pay initial registration fees etc. You will then have to pay for licencing either every 6 or 12 months. You must have third party insurance and that can be organised easily on the internet at the time.

Buying a car in cash is easy, but you do need to have sufficient proof of identity ( so get your drivers licence and medicare sorted out quickly)

Regarding purchases, we bought the car, paid for the deposit (known as a bond) for our rental, and I think that cell phone calls and internet costs were quite big cos we didnt have a "credit record" and were unwilling to sign up with big contracts.

I felt that stocking up a kitchen with all the basics (salt, pepper, oil, cleaning products etcetc the list is endless) was quite an outlay. I say this bearing in mind that we had no jobs, and so it was scary spending money when there is no income. I think as soon as you are earning, these costs are very manageable.

We dont have children, so I cannot comment on fees regarding schools and uniforms, and before or after school care, but I would guess that needs to come into your planning.

In my honest opinion...if you are offered a job, go for it. They are like gold, and having one before you arrive is a definite bonus. Salaries are pretty good, and you can always look for another job at a later time.

All the best for the planning and preparation that comes!

Merry Christmas

[Jordy]

http://www.ratecity.com.au/car-loans/calculator

$15000 over 5 years @ 9% will cost you $311 per month.

You will need to add to that about $600 in rego a year and about $600 a year in insurance.

[Nev]

Hey,

This is pretty accurate on the pricing side with the exception of clothes, the clothes are so expensive for name-brand stuff, general stuff from KMart and so on is much cheaper

http://www.numbeo.com/cost-of-living/city_result.jsp?country=Australia&city=Melbourne

The average salary in Auz is about 48K so you are essentially earning a salary and a half and should be able to support your family on that

http://www.payscale.com/research/AU/Country=Australia/Salary

Things are a lot easier if you wife works and you get a second salary though as it gives you the ability to do more

[KalahariHarry]

following this, some interesting links, thx guys

@seanmoss, PM me your e-mail address and i will send you my budget, you can edit it as you do your research, but i'ts a nice starting point.

Trev

[Bob]

Sean.

Let me explain a little about superannuation in Australia, what it is and how it all began, and why?

Australia is a typical Western country in that we haven't had many kids over the past thirty or forty years, so consequently there are heaps of older Australians ("baby boomers") who are nearing retirement in the next decade.

Basically, we don't have the population in the workforce to support an enormous number of baby boomer Australians with their Old Age Pensions, health care in their old age, and the residential care needs (Old Folk's Homes), so in the 1980s the Australian Government began to make workers begin to save privately for their retirement in Superannuation funds.

Every year, all Australian workers got a fixed pay rise to compensate for the year's inflation, and in 1988, workers got a 1.5% pay rise across Australia.

This didn't go into their pockets. For the first time, employers were required, by law, to put that 1.5% of their workers wages / salaries into a super fund for them, so that they could tap into it and access it as an extra income over and above the Australian government's Old Age Pension.

It quickly went up to 3% the following year. The workers of Australia went without their pay rise in their pockets, instead getting money put in every quarter into their super scheme in the fund by their employers.

It amounts to about 9% or 10% going in each quarter into a super scheme nowadays, several years since it all began.

Australian workers are now some the world's most cashed up workers to retire in the Western world.

I know. I've been retired for seven years now, since I took early retirement at 55. I am lucky enough to travel for up to six months each year, in 2014 to Portugal for four months.

You can't access this money in your super fund while working. The super scheme puts it into shares (Australian & international shares), property, bonds, fixed interest and cash mainly. Some years, I've had over 20% growth on my super, other years next to nothings, but over the long term it will be higher than the inflation rate current in the Australian economy.

You don't pay towards the 9%. You can add, over and above the employer's compulsory 9% voluntarily into your super if you wish. This will attract a bonus at the end of the financial year.

When it comes to doing your income tax return each year to the Australian Tax Office (ATO), you don't need to declare any amount of super, because you don't see it that year. You only get to see it when you retire from the Australian workforce. That is the law.

So . . . . . just take in mind that whatever salary / wage you get each year in your bank account, another 9% of your gross (before income tax) wages goes silently each quarter into your super scheme, which quietly builds up over the years into a nice financial nest egg for the retirement years.

Enjoy!

Edited December 25, 2013 by Bob

[Mara]

And the 9% that Bob speaks of, is now 9,25%

[AndreaL]

Hi Sean

Are you coming over on a 457 visa or on a permanent residence visa.............this makes a vast difference, as you will have to have private medical insurance on a 457 and are not eligible for Medicare.

If coming on p.r. you will be eligible for family tax benefit. I did a little calculation on a $70 000 salary with 2 children ( I added 6 months to their ages) not in any approved childcare facility and paying $400 rent a week,you may be eligible for $483 family tax benefit per fortnight https://www.centrelink.gov.au/RateEstimatorsWeb/cre.do so don't forget to factor that into your calculations.

I don't know how much room you have to manoeuvre with counter offers etc, because, if you earn more, you get less family assistance etc.................you can try, but a lot of times the salary is what it is.

Cost of living really depends on how you choose to live, you can live very frugally, some people have a grocery shop of $200 per week and for others it is $500, but basically you live within your means.

It is very difficult to give a cost of living guide, you really need to be here.

For now, a lot depends on visa subclass and then perhaps we can provide a bit more info.

[Bob]

I don't know about "counter offers" either.

Many wages and salaries in Australia are set by Industrial Abitration, which means that the professional association or union representing your kind of job goes once a year before an industrial court to argue the remuneration (reward, or pay) for certain kinds of jobs.

An "Award" rate for your job is then officially set and is legally binding on an employer to pay that amount for that kind of job being done.

If your boss is paying you the going rate, set by industrial arbitration, then if you want a higher wage / salary, you really have to prove you are worth paying over and above the award rate for your job. That will only come in time as he / she assesses your performance and ability on the job.

[AndreaL]

Thanks Bob, for making more sense than I did. Yes Sean, many wages are set either by an Award or an EBA. I think they might be a little gobsmacked if you come back with a budget and personal living costs. Usually award salaries increase in July I believe, whereas an EBA can be set for a specific period, in hubby's case the union goes in and negotiates/bargains every 3 years.

Overtime, or penalty rates are according to the conditions of your award/EBA.

If it is an award, you will find it here http://www.fwc.gov.au/index.cfm?pagename=awardsfind

You will usually find that awards are based on your level of experience, and it is at your annual review that there is room to negotiate your level, i.e. if you have had more training during the course of the year, more responsibility etc.

[seanOZ]

Hi Bob,

Thank you for all the information that you have provided it truly has helped to answer my questions. I was not aware of the fact that the various industries are regulated by the government. This would explain some of the language used around the salary structure that I'm being offered from the company in question. Up until this point I just thought it was an internal way for them to manage their own structures.

But I will research this a bit deeper and see what kind of room for negotiation there is, if any.

Kind regards Sean

I don't know about "counter offers" either.

Many wages and salaries in Australia are set by Industrial Abitration, which means that the professional association or union representing your kind of job goes once a year before an industrial court to argue the remuneration (reward, or pay) for certain kinds of jobs.

An "Award" rate for your job is then officially set and is legally binding on an employer to pay that amount for that kind of job being done.

If your boss is paying you the going rate, set by industrial arbitration, then if you want a higher wage / salary, you really have to prove you are worth paying over and above the award rate for your job. That will only come in time as he / she assesses your performance and ability on the job.

________________________________________________________________________________________________________________________________________________________________________________________________

Hi Andrea,

I will most likely be on a 457 visa. And yes we plan to try and live as frugally ( if there is such a word ) as possible.

At this point where are in the process of trying to put together an extremely detailed budget of everything from baby diapers through to how much electricity we estimate to use, based on information provided from the different website links and people's responses to our posts here on SA AUS...

At this point (and were working on a very conservative budget) we are estimating to spend AU$4500 per month to live in Melbourne. Which is a little concerning for me because after tax has been deducted from my basic I am going to be left with approximately AU$3025. Now I probably could make the in region of thousand AU$1300 in overtime per month, which is only paid quarterly. But this is not a definite and I'm only going on what I mean told from the new prospective employer.

For the next two years at least by wife will not be able to work she will be at home looking after our youngest (seven-month old baby boy).

So I would need to look at trying to explore potential government grants if there applicable and also looking at some form of work/income stream that my wife and myself could do from home to supplement our income.

Kind regards

Sean

Hi Sean

Are you coming over on a 457 visa or on a permanent residence visa.............this makes a vast difference, as you will have to have private medical insurance on a 457 and are not eligible for Medicare.

If coming on p.r. you will be eligible for family tax benefit. I did a little calculation on a $70 000 salary with 2 children ( I added 6 months to their ages) not in any approved childcare facility and paying $400 rent a week,you may be eligible for $483 family tax benefit per fortnight https://www.centrelink.gov.au/RateEstimatorsWeb/cre.do so don't forget to factor that into your calculations.

I don't know how much room you have to manoeuvre with counter offers etc, because, if you earn more, you get less family assistance etc.................you can try, but a lot of times the salary is what it is.

Cost of living really depends on how you choose to live, you can live very frugally, some people have a grocery shop of $200 per week and for others it is $500, but basically you live within your means.

It is very difficult to give a cost of living guide, you really need to be here.

For now, a lot depends on visa subclass and then perhaps we can provide a bit more info.

[Bob]

Sean.

A 457 visa is the quick way to get into Australia. I know of a number of Saffers that have made it permanently into Australia by that visa route.

Unfortunately, while you're on the 457, which I believe is for the first couple of years, you get no government assistance at all.

You're basically deemed to be self-supporting with the job you're doing and don't need Australian government help.

After two years, your boss can put in for permanent residency for you, and with that, you can get any amount of financial help from the Australian and local State governments, once you are PR.

A salary of A$55 000 is possible.

The main thing is to live frugally and see the two years out.

It will be tough emotionally because you're going to a place where you don't have any social network to support you, so expect to get the homesick blues once the "honeymoon" period is over.

You'll both be in love with lots of things about Australia when you first arrive, but once you get used to it all and accept that as a norm, then other realities begin to kick in and some begin to take over your mental outlook.

I've said to others, give yourselves two years. You'll think of going back in the first year, and this is natural, but don't go on a "low", emotionally. In life, you just have to bite the bullet and stick some things out, because if you have a personal history of not doing so, you'll have nothing to speak of worthwhile at the end of the day.

That goes with doing an apprenticeship or a degree at Uni, going out with somebody, getting married . . . . . even migrating to another part of the world.

So . . . . seek out other South Africans, because they will know what you're going through as good as anybody else, and get to know Australians. You'll find Aussies can be really generous people if you open up a bit to them and speak from the heart. They have a soft spot for the people "battling" thro life.

Finally, good luck!

[AndreaL]

Hi Bob,

Thank you for all the information that you have provided it truly has helped to answer my questions. I was not aware of the fact that the various industries are regulated by the government. This would explain some of the language used around the salary structure that I'm being offered from the company in question. Up until this point I just thought it was an internal way for them to manage their own structures.

But I will research this a bit deeper and see what kind of room for negotiation there is, if any.

Kind regards Sean

________________________________________________________________________________________________________________________________________________________________________________________________

Hi Andrea,

I will most likely be on a 457 visa. And yes we plan to try and live as frugally ( if there is such a word ) as possible.

At this point where are in the process of trying to put together an extremely detailed budget of everything from baby diapers through to how much electricity we estimate to use, based on information provided from the different website links and people's responses to our posts here on SA AUS...

At this point (and were working on a very conservative budget) we are estimating to spend AU$4500 per month to live in Melbourne. Which is a little concerning for me because after tax has been deducted from my basic I am going to be left with approximately AU$3025. Now I probably could make the in region of thousand AU$1300 in overtime per month, which is only paid quarterly. But this is not a definite and I'm only going on what I mean told from the new prospective employer.

For the next two years at least by wife will not be able to work she will be at home looking after our youngest (seven-month old baby boy).

So I would need to look at trying to explore potential government grants if there applicable and also looking at some form of work/income stream that my wife and myself could do from home to supplement our income.

Kind regards

Sean

Hi Sean

We also came on a 457 and it changes the way you need to look at your budget. I also think in this case it makes sense to gently mention to the potential employer (in case they aren't aware, as many aren't) that by law you will have to have private medical insurance on a 457, so you will be looking at overseas visitors cover in the region of $300 per month, as a 457 visa holder you are not eligible for Medicare and so will pay full price for Dr visits etc $70 plus per visit, you are also not eligible for any kind of Centrelink payment such as Family Tax benefit part B.......................I would mention this, in that your salary will have to cover all costs, unlike a permanent resident who has assistance here and there.

Originally when we arrived in early 2006, hubby was on the minimum (then) 457 wage of $43 000, it is $53 900 now or $58 886 inclusive of superannuation, so you cannot be paid less than that.

In 2007, we were sponsored by another employer at a salary of $58 000 for a 45 hour week, to be honest it was quite a struggle with 2 young kids, but you may be able to do it if you can get permanent residence as soon as you can. There is no need to wait for 2 years to apply for permanent residence, you can apply anytime if you wish to go the Skilled Independent 189 route, have the skills and meet the points.

You can also go via the 'direct entry pathway', which is also employer sponsored p.r................as soon as you arrive if the employer is willing to nominate you, however for most occupations you must have a valid skills assessment by the relevant assessing authority, alternately you can go the transitional route, which means working for the sponsor for 2 years before applying.

A few points to consider, on a 457 you can only work for your sponsoring employer, if you do other work your visa can be cancelled....your wife is not under this work condition and can work as she wishes, but with childcare as expensive as it is, might not be worth it.

If she could do some type of work from home, it could be enough to subsidise your salary until you get p.r.

In light of the fact that it is a 457 on offer, I believe you should be fairly honest with the employer and ask what the options for them sponsoring your p.r. are. Would they commit to sponsoring you after x amount of time ( say 12 months) and with you having the required skills assessment? If so, I think doing a tough year would then be worth it.

I'm not familiar with rental costs for Melbourne, but rent is probably the biggest outgoing for most families, so I would research that as part of your budget.

A person on p.r. can survive on $55k (with assistance and Medicare) for a person on a 457 it is much more difficult, and in this situation requires honesty and being upfront with the employer so that you both enter the relationship with the same expectations.

Good luck, and shout with any questions you may have.

[seanOZ]

Hi all,

I would just like to thank all of you for the information provided and the words of support. It is definitely helping in making a fairly complicated and difficult process a whole lot easier.

Once again thank you to you all...

[Mara]

As rent is going to be a big factor, I had a look what a rental property in Sunbury would cost you, a two-bedroomed unit would start at around $230 per week! Here is the link, so that you can have a look for yourself.

www.realestate.com.au select "rental" and type in Sunbury 3429 in the search bar.

[Tiermelk]

Also have a look at www.realestateview.com.au - I found it more usable than www.realestate.com.au.