Paul2412

As someone living in the UK and about to embark on a working holiday visa with the sole aim of deciding if I want to live in Oz on a permanent basis I keep seeing this divide by 2.2 everywhere.

From what I gather, you should divide an Australian wage to work out the equivalent UK salary.

So, using this I'll take my current UK salary of £40,000 and compare the salary of Oz jobs. A typical example would be $90,000. At the current exchange rate, my Australian GROSS salary would be £60,000, however if I do the 2.2 then it would be £40,000 again.

Now, what is confusing me... Does dividing by 2.2 take into account the likely taxes and other deductions, so that is what you are left with take home pay? Because if so, taking HOME £40,000 is actually a large increase on my current salary at home (£40,000 less tax, less national insurance = £28,800 ), or is there some other hidden deductions I'm not thinking about?

Vegemite Kids

the 2.2 takes into account housing prices (rental generally) and other cost of living expenses etc regardless of either high or low exchange rates but is generally only discussed when exchange rates are low. (For some strange reason when exchange rates are high people like to use the high exchange rate conversion but when exchange rates are low everybody talks about the 2.2)


The 2.2 will generally (I stress GENERALLY) allow you to compare apples to apples on GROSS salaries (but it might be granny smiths to coxs pippens)

newjersey

Lots of discussion about cost of living here, but Australian crowd is asleep now, so to help you out a bit, to getthe discussion going in a right direction, could you specify what area you are looking to move to and what would you expect in terms of a house, car or carS, kids going to schools, etc. The coefficient is much too generic (just to know you are not being scammed outright like) and even the tax rates being roughly the same does not quite account for city vs country side living, lifestyle expectations and some differences in treatment for permanent vs temp residency. Just to give you an example, temp residents in NSW pay $4500 per kid per year in schooling plus may have to pay private health cover to maintain their legal status, which could make a good salary into a not so good one.

Paul2412

OK, thanks for this. Details below:

Area: Brisbane or Perth
House: 3+ bedrooms in a decent area (not fussed about being right on the coast)
Kids: none
My job salary estimate: $90,000
Spouse salary estimate: $55,000
2 cars
Outer suburbs (max 50 minute commute to CBD)
Good lifestyle such as golf and eating out

Not sure what else to add?!

Bermudashorts

The 2.2 isn't a magic number, it just seems to be that thing here cost about 2.2 times the GBP price in AUD. Of course some people think more and some less and it is not everything but it is not a bad rule of thumb. So if things cost 2.2 (say) more then most people would ideally need to be earning 2.2 more to have similar purchasing power.

Tax bands are different but overall people pay very similar proportion of tax as they do in UK so comparing gross to gross is just fine.

Grayling

I thought you said you have a WHV?

You do realise that you are only allowed to work in temporary jobs for up to 6 months and can only renew it if you do a job such as fruit picking for a while.

It is not a visa that allows you to settle or remain in Australia.

sassie

He probably just wants to get an idea of costings as he did say in his original post he will be coming out on a WHV with the sole of aim of deciding whether Australia is for him!

Grayling

Sure...but his second post talks about the cost of a house, commuting to the CBD, buying 2 cars and his and wife's salary.

Not really what you would expect on a WHV wher you can only stay in a job for 6 months at most.

bcworld

In very basic terms on $90k you would pay $23,500 in tax and medicare levies. Leaving you with c. £30,200 if you choose to use the 2.2.

I agree with the point about the WHV though. All of this seems a bit immaterial. You need to be prepared for the fact that on a WHV your life might be a bit different in that your employment may be more casual and not in your current field...you might have to take what you can get. Whether this gives you the taster you're looking for I don't know?

Amazulu

It's one of BE's fantasyland exchange rates, along with 2 and 3.

chris955

The 2.2 is used by a lot of people, personally I use $2 to £1 as generally wages are double in dollars compared to pounds ie $1000 a week £500. Of course some earn more and some earn less. Its obviously pointless using the exchange rate on any particular day.

killerhales

I'm a supporter of the 2.2 as a useful rule of thumb, simply applied to gross salaries. It has worked for me.

Of course, as already posted, to get to the next level of accuracy there are a lot of personal factors to consider, such as school fees, as mentioned.

2.2 also happens to be my degree result (too much partying).

chris955

Exactly, that is the problem, it will work for some and not for others. Obviously though today's rate is pointless as it has no relevance to wages or buying power.

Turban Explorer

A desmond

hollykimalan

Ahhh the old Arch' ishop!