Mike 3G

Yes I know not simple and its certainly wise to avoid using the current exchange rate.

The reason I ask is a former work mate is considering an offer from an Aussie employer, the salary is $90K. My advice to him is to divide by 2.2 and ignore the current FX rate using this method would have him on a UK salary of 41K. He can then decide if he could live on that salary in the UK and apply that logic to Australia's living expenses as I feel there is little difference overall.

So what do you reckon am I in the ball park in terms of how much to divide by?

ABCDiamond

$90k is about 1.5 times the Australian Adult F/T median wage
£41k is also about 1.5 times the UK Adult F/T median wage

Therefore your 2.2 does seem about ball park.

Centurion

To be annoying though I would also argue that it is more expensive to live in Australia.

ABCDiamond

Some say it is, some say it isn't

Currently the ratio is similar to the General Election count, almost 50-50

hoofie2002

It depends where the 90K is. In a major city you won't be living like a king. If, however, it's somewhere more rural and house prices/rents are cheaper then it's going to stretch much further.

kaishang

The 2.2 exchange rate and also the 1.5 multipler on average salary seems like a good number to work with for me.

However I'd also take into account:
- house/apartment prices in outer suburbs may be similar but rents are cheaper in UK
- inner city real estate prices are higher in UK
- supermarket food is cheaper in UK
- cars are overpriced in Australia

The personal circumstances eg renting/buying will also come into it in the short term. But the 2.2 exchange rate/1.5 multipler is a good long term number to work with.

moneypenny20

Is the Aussie employer in Sydney CBD or Ballarat?

BadgeIsBack

I'd never convert it and work out what things cost in Australia and what percentage of the income they are compared to the UK.

MartinLuther

2.2 sounds about right.

If he's coming from London or the SE then you could go with 2.0. If he's coming from elsewhere you might go with 2.4

moneypenny20

You would if you were in the UK now and contemplating the move

Davesax

I'd agree with this , i'd also ask him even if it did work out to be a slight drop - he will always be gaining the obvious areas of lifestyle that he must be wanting by contemplating the move in the first place -

itxrd

Mike - sounds like you know your stuff. 2.2 is about right. I'd probably say even higher as Centurion says - 2.5-3 as Oz is dear but at least you're being realistic.

Anyone that says Oz is the same price wise as the uk either lives in Kensington or came over years ago when maybe that was the case. We came over 4 months ago and it is more expensive. Your pal will see so best he's prepared. Standard of living is higher though so its worth it

Buzzy--Bee

Yes but what many people fail to appreciate is that many aspects of lifestyle have to be paid for.

BB

Davesax

The sun is free baby

KJCherokee

Well, it's a long time since I lived in the UK, but my experience going back for visits (last was in 2006) was:

Petrol costs in pounds what it costs in dollars in Australia
Restaurant/pub meals are more expensive in UK
Housing is more expensive in UK - we sold my father's house (3 bed detached just outside Maidstone) for the then equivalent of $900,000 which would have bought two similar sized houses in Brisbane at the time.

Ok, back then the A$ was worth about 40p, not the 57p it's worth today, and things may have changed. We're due to go back again next year and it will be interesting to see the changes.