How does your salary stack up to the rest of the country? A look at what Canadians make
NationalPost.com – FP/Personal Finance/Managing Wealth
December 4, 2015. Ted Rechtshaffen
I am always interested when clients want to know how they are doing, compared to others.
The reason for my interest is that we spend a lot of time trying to understand clients’ personal goals and how their financial situation will allow them to best reach them. Yet human nature isn’t just about how you can achieve your goals. It is also often about whether you are doing “better” than your peers or not. I don’t begrudge anyone who wants to know. It is kind of how we are built.
I will never forget being on a trip to the Dominican Republic and noticing that, despite many of the citizens being poor by our standards, they seemed relatively content. One of the reasons is that they could look to their next-door neighbours in Haiti and feel like they were doing all right in comparison. There is little doubt that wealth and income only take on a complete meaning to people when they are relative to whomever you view as your peers.
With so much focus recently on tax brackets and who stands to benefit (or lose) based on their income, today it is time to compare. How much are you making? How much is your friend making? Where do you stand?
Of course, I wouldn’t be a retirement and estate planner if I didn’t remind people that income doesn’t mean much if you are spending beyond your means, but for this article, let’s only look at one side of the income statement.
Our friends at Statistics Canada provide pretty good data on income, but this is based on the income that is reported to the Canada Revenue Agency. We should probably bump up the income table slightly to recognize unreported income whether that comes from doing odd jobs, tips in the service industry or any unreported cash income. I know for many Canadians they would not have any of this income, but for a smaller percentage, there is a sizable part of their income that is probably unreported. I have no data to back up this number, but I will bump up the StatsCan income data by 10 per cent to include a non-reported income factor.
According to StatsCan, the median income (plus our 10 per cent factor) in Canada in 2013 was $35,200. This means that half of Canadian tax filers have incomes over that number and half are under that number.
What about the high income? Based on 2013 income data and our 10 per cent added factor, the top 10 per cent make $97,000 or more per year, the top five per cent make $137,000 or more and the top one per cent make $245,000 or more. Where are you?
According to StatsCan, there are a few job titles that, on average, fit within the top one per cent: specialist physicians average $350,000; and I know that ophthalmologists, cardiologists and radiologists rank among the top earners, and often earn more than $500,000 a year in Ontario.
On average, Canadian judges are making $260,000 a year.
To find out the average salaries of almost any Canadian occupation there is a great government website called Job Bank < http://www.jobbank.gc.ca/wage-outlook_search-eng.do;jsessionid=581B406BE68802BC25C719515098655A.imnav1?reportOption=wage >.
The other website that I used as a bit of a backup was the Ontario Sunshine List, to view actual salaries of individuals in various fields who are government employees earning more than $100,000. It can be found on the Ontario government website < http://www.ontario.ca/page/public-sector-salary-disclosure >.
So where do certain jobs fit along the income spectrum?
One group that is in the news a lot because of labour issues is teachers. When reviewing secondary school teachers in Toronto, for example, the Job Bank reports that the median salary is $38.94 an hour, which translates into $75,933 a year. If we add another 10 per cent to conservatively represent employer contributions to the pension plan and benefits, then the median income is $83,526. From a Canadian perspective, this income level is easily in the top 15 per cent.
If we look at secondary school teachers in Toronto, Job Bank says that those in the top 10 per cent of the secondary school teachers’ income range are paid $52.20 an hour, which translates into $101,790 a year. If we add another 10 per cent to conservatively represent employer contributions to the pension, the amount hits $111,969. This is pretty much at the top 7.5 per cent mark of incomes in Canada.
So the median high school teacher in Toronto is in the top 15 per cent of Canadian incomes, and the higher end of teachers would be in the top 7.5 per cent of Canadian incomes.
Elementary school teachers’ incomes are very similar.
Let’s look at police officers.
According to the Job Bank, using the same assumptions as for teachers, median pay for police officers in Toronto is $85,585, and those at the higher end were $107,250. So, the median would be a little higher than teachers, maybe the top 13 per cent, while the higher end is a little lower, maybe top eight per cent of incomes in Canada.
At the lower end of the income scale, we would find waiters and waitresses. Even with factoring in a 15 per cent bump up on reported income for unclaimed tips, the median income would be $25,228 and the high end (top 10 per cent of waiter incomes) would be $35,880. So, a high-end waiter or waitress would rank just over the median, or 50 percent of incomes, and the median waiter would rank at about the 63rd percentile.
If we look at a retail salesperson, the median income would be $22,425 and the high end would be $38,025. This would rank 66th percentile and 47th percentile respectively.
One of the things to notice from this data is that not everyone is working full time. These percentiles include all taxpayers. If we make some adjustments, we can maybe get a better idea of incomes for just full-time workers. If you assume that those earning less than $20,000 are not working full time, that would eliminate about 30 per cent of tax filers. If we re-rank incomes using the “full-time only” list, the numbers might look like the following percentiles:
Specialist Physician – Median: $350,000 — Top 1%
Judge – Median: $260,000 — Top 1.5%
Secondary School Teacher – High End: $112,000 — Top 11%
Police Officer – High End: $107,250 — Top 12%
Police Officer – Median: $85,600 — Top 20%
Secondary School Teacher – Median: $83,500 — Top 22%
Retail Sales – High End: $38,000 — Top 70%
Waiter/Server – High End: $35,900 — Top 74%
Waiter/Server – Median: $25,200 — Top 94%
Retail Sales – Median: $22,400 — Top 98%
Using only “full-time” employment as our group for analysis, the following incomes would equal the following percentiles:
$25,000 = 94th percentile
$50,000 = 53rd percentile
$75,000 = 27th percentile
$100,000 = 14th percentile
$150,000 = 5th percentile
$225,000 = 2nd percentile
$300,000 = 1st percentile
I won’t draw any conclusions here on whether certain jobs pay too little or too much. I thought it would simply be a fun exercise for people to see where they rank and where others rank. Of course, income is just one part of the mix. Are you happy in your job? Do you have what you need?
They say that when someone is content with what they have, their income doesn’t really matter. I couldn’t agree more.
Ted Rechtshaffen is President and Wealth Advisor at TriDelta Financial, a boutique wealth management firm focusing on investment counselling and estate planning.
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Tags: economy, standard of living
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