Six figure jobs
The Seek job search website has (finally) followed TradeMe’s lead and now have a ‘jobs paying over $100k‘ category . This is said to be in response to the large increase in the number of positions attracting those salaries, although all the numbers I can find quoted are only percentages, so it can be a bit tricky checking the real picture.
The largest slice of the currently advertised positions are in their IT category {148/3152}, followed by Engineering {359/3152} in quite a distant second, with accounting (285/3152) also placing. In comparison TradeMe are currently listing 554 IT jobs, out of 1332 in total with a $100k+ salary.
Now, the real picture is a bit smaller than this. We’ve mentioned before about potential overlap in advertising for ‘the job I’m leaving and the job I’m going to’ distorting the apparent figures. Also, some positions have multiple different advertising slants. The difference between a consultant, architect or IT specialist can sometimes be nothing beyond the advertised job title. So agencies try different headlines hoping to catch your eye. So don’t be surprised to find the same job description for a wide variety of different job titles.
Plus numerous positions are being advertised with multiple agencies, so it can pay to dig around and pick which agency to apply through if you fancy one of these positions. Often you will find that the actual recruiting company is also advertising the same role via Seek or TradeMe.
While the agencies will of course tell you that you stand a much better chance applying through them, experience shows few agents actually add value (there’s a shock!). The ones that will are normally the agents who have worked with you previously – perhaps in placing you in your current role. When it comes to interviews, the recruiting agencies should be able to help you out with the nuances of who is interviewing you, company values etc. more than a simple perusal of the companies website. Set against that, good personal networks should be able to give you better information.
At the end of the day if you apply directly, it can mean that the hiring company saves $20k+ in ‘recruitment’ costs. Money that would otherwise be paid to the agency as a success fee. There’s certainly a few decisions, which while they’ve not only rested on that factor, have certainly swung in the direction of a direct applicant rather than a recruitment agency referral because it saves that $20k.
(Don’t expect of course that you will be seeing the $20k!)
Do you have to pay yourself a “fair” wage?
This is a question for the self employed – and is going to be answered one way another through a supreme court case.
Hearings on the appeal by Christchurch orthopaedic surgeons Ian Penny and Gary Hooper concluded in the Supreme Court in Wellington this afternoon. The pair argue their decision to re-route income through companies and family trusts was not a tax avoidance arrangement.
In doing so, they cut their personal incomes by as much as 80 per cent from levels prevailing before the top personal tax rate rose to 39 per cent in April 2000.
While the surgeons admit these were not “commercially realistic” salaries, they contend there is no such concept in the Income Tax Act and cannot be ruled to be avoidance.
Basically – they used to earn about $500-$600,000 a year, but once they set up the structures, they “earned” about $120,000 a year, and used the structures to “pay” other family members.
Which is basically what myself and hubby do – with one major difference: we were advised that income tax law states that the sharing of income must be realistic, and in proportion to the amount of effort each of us puts towards earning the money. Which means that I cannot be paid the same as hubby, and it is his effort that earns the money.
That doesnt mean I cant get a share of it – but it has to be comensurate with the effect my work has. Now I actually do a fair number of hours each week on Hubby’s behalf – so I get a “token” salary – and overall we do pay less personal income tax because of it.
But hubby still earns personally the same amount per month that he did while working at IBM – so we know it is a fair salary for the work he is doing. And thus we wont get into lots of trouble with the tax man!
I have met many people who believe you can simply split income – with no thought to doing so with reasonbale care – it’s a bit of a Kiwi Urban Myth. I guess the outcome of this case will tell us one way or another. Could be interesting.
And I could be getting a pay rise.
Trade Me Salary Guide Oct – Dec 10 is out now.
Once again, Trade Me have come out with a salary survey – which may be of some help when looking at planning a move here. As usual – you do need to understand that this is a very blunt instrument, and you cant really rely on the figures as such:
Trade Me Jobs listing data, full time roles, Oct-Dec 2010. The range represents the 5th and 95th percentiles respectively
Basically thats because it works on the Listed Salary, not on what people actually get paid – and in our experience theres often a large difference between those two numbers. Still, it gives you something to work with when first looking at whether you can afford to live here, or would be willing to work for these salaries.
You can then click on any of those headings and see a further breakdown. The IT section for example:
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Latest Trade Me salary survey results.
The upshot – you’ll get paid more if you live in Wellington than in Auckland – despite what most people think, and one fo my local towns, Masterton, is at the bottom of the heap for wages.
And IT Architects get paid a lot.
Of course – this is a very blunt instrument to determine what wages people are getting. Most of the jobs in Hubby’s field actually don’t state a salary for example. And there can be a very big difference between the advertised salary – which is there to hook you, and what you actually get paid once all the excuses for it won’t be what was advertised have been thrown around.
Still, it’s an interesting snapshot.
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Who wants a job in sales?
I’m sure this happens everywhere, not just in New Zealand, but don’t be fooled into thinking it wouldn’t happen here. It does, and we have seen the very real and devastating effect it can have on people’s lives when they suddenly find out that the rules have changed, and they will not be getting the income they were promised and needed.
If you do have a job with sales targets where only a proportion of your salary is fixed – remember that you can only bank on getting that part of the salary paid. Budget for that.
Hubby has turned down jobs that pay on this basis – because we know full well that this happens, and we just cannot afford for some manager to change the rules just because you happen to be really good at your job and they don’t want to have to pay you.
Oh….
(And apparently I need to stop reading these blogs to hubby while he’s got a mouthful of tea and a Laptop in front of him.)
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Is Income Splitting coming to New Zealand?
Filed under: Cost of living, Economics, Retirement, Pensions and Kiwisaver
It seems that a bill has been selecting for reading in Parliament which would allow single wage families to split that income and therefore pay less tax. Note the word families. Apparently me and hubby do not “count” as a family because we don’t have children. And Peter Dunne – “party leader” of United Future ( party of 1 MP – but hey – he gets a Party Leaders expense allowance and salary!) believes that you are only a family if you have Children.
Git.
I quite liked the sound of Income Splitting, until it was linked to ability to have children. (And is anyone else slightly confused that on the one hand we have Politicians saying you can only have more tax cuts if you have children at the same time we are threatening to throw someone out of the country for being pregnant???)
I personally don’t think this will go anywhere, because it does advantage those on higher incomes, and thats almost always seen as a bad thing for anyone except those on the high incomes. And besides – we have already had a raft of tax cuts, and as far as I’m aware the NZ government is still saying that tax cuts have to be paid for by equal tax increases.
But doesn’t income splitting already exist in New Zealand?
You may hear this from some people – we certainly did. Over and Over again. But it actually doesn’t. In order for one single income to be diverted to more than the person who actually did the work to earn it – you have to jump through a whole load of legal and accounting hoops to keep on the right side of the Tax Man. And you need to be self-employed. And thats always the side of the Tax Man you want to be on.
Theoretically, some of Hubbies contracting income could be diverted to me, and therefore he would earn less and pay less tax. But, its not that simple: because he does the work that brings in the money, he has to earn the bulk of that income in his own name, otherwise we are using tax rules to avoid paying tax, which isn’t legal.
So if I was to take some of that contracting income, as a wage for myself, then the amount I get has to reflect the contribution I make to earning that income. As my contribution is running this blog – which doesn’t make us any money- and doing the paperwork for the business, which doesn’t earn any income but is a necessary job, I can hardly “earn” the same amount as Hubby, and thus split the income down the middle.
So bringing in a bill to allow Income Splitting on the whole sounds like a good plan. I’m all for less taxes and I think its about time that people should be able to access the same tax cutting measures as employees that the self- employed can. I just think its wrong to link tax to ability to have children.
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Contracting Vs Employment.
The great thing about redundancy is that you get to look with fresh eyes at your options. This is a big mind set change though, and a lot easier said than done.
While I’ve toyed with the idea of becoming a licensed immigration adviser (!), doing some barrista training, or just bumming on the beach for a few months working to improve my currently non-existent surfing skills, a gainful occupation is called for.
So becoming an MP is out too.
Three years ago when I was out of Unisys, the focus was very much on ‘finding a job’. Salaried employment with a company. We’d started looking at property investment at the time, so were fixed on needing a salary in order to get a mortgage. While having read through the Robert Kiyosaki Rich Dad series (highly recommended), I wasn’t convinced starting a company was for me. I’d also never been out of work – apart from a couple of months directly after graduating, and the month moving from the UK to NZ. In the latter case, I had a job to come to. Being ‘out of work’ was an unsettling experience for me.
Avalon was used to being self-employed as a locum pharmacist, and used to setting her own hours, working where and when she wanted. But we always felt that one of had to have a “steady paycheque”.
This time round looking at the wider options, rather than just looking at a job, is different. How you may ask?
Three years ago;
There was the allure of a role at IBM to go to. A bit like returning to a childhood home, somewhere I felt was just right. A company I knew well, believed would not have a glass ceiling to potential achievement, where I’d be working with other ‘top talent’ that I could look up to and learn from. It started out like that, unfortunately with a few key people leaving, it changed a lot.
I didn’t know many people in Wellington. Not many people knew me. Or at least it seemed like that.
Plus there was all the stuff about needing a regular income to get a mortgage etc. and feeling that we needed the “security” of knowing how much was coming in each month.
Now;
We’ve got the companies already set up to handle contracting and consulting work, with some good advice from lawyers about ensuring they were flexible. Although they were set up for property investing, one of our companies is set up specifically for trading activites – including selling the book and contracting work.
With five years NZ experience under my belt, I’m more confident about my skills in the market place. To the point where my UK experience is relegated somewhat on the CV.
The networking helps a lot, feedback from people at this point is that senior managers in companies elsewhere in NZ & Australia have heard of the good work I do, (even though I’ve not necessarily heard of them by name) and want me to come in for an interview. So that’s all good. There are options on the table.
I’ve got it clear in my head that people are going to have a bee in their bonnet about high salaries. And while we’ve joked about doing three days work for the laughable salaries on offer, it was always a bit of a joke. Working part time is an entirely viable option. After all, if I only need to work an average of three days a week at a decent contract rate to maintain my current income level, why would I work five days a week to take home 30% less??? Just to be in a ‘secure’ job, with a ‘good’ company.
Now I should say, I don’t think that a salary of $100k is laughable in itself. Yes I know a number of people who would jump at any job paying that money. However, it’s laughable when you look at the experience, skills & qualifications that companies are asking for. The level of job they are expecting you to do, the amount of work ($$$) they want you to bring in for the company, for which your ‘compensation’ will be a pittance.
You wouldn’t expect any decent brain surgeon to only work for $60k a year. They’re going to have your life in their hands, and you want them highly skilled, with up to date training. To have lots of experience. Not just read a book on the topic, sat an NCEA in anatomy and be pretty handy at sharpening a meat cleaver. If you want that experience, you have to pay for it. Simple really. I may not always like paying money for a plumber, electrician, solicitor, mechanic etc., their skills are just as valuable to them as mine are to me, they’ve invested in training, have experience and fundamentally can do a professional job that I’m not trained to. So I pay. Lots.
Contracting allows me to invest properly in advancing my skills. Now of course, I’m paying for the training, plus travel costs and I don’t earn money while I’m being trained. So you’d think that a big draw back – except it isn’t. While an employer will cover all those costs, and pay you while you’re on the training – that assumes that they understand the need to invest in you, your skills and your career. Which is worth precisely $0 to you if they wont pony up the money.
Contracting allows me to pick and choose a little more what I want to work on, and if I want to work on it. While I had the flexibility originally with IBM, identifying opportunities, working with the client to close them, and then deliver them myself or hand on to a colleague – that was another thing that changed. I’m sure there probably won’t be a constant stream of interesting things to work on when I’m contracting. If I judge things well, keep money aside for any dry work periods, I wont have to accept the first piece of work which comes along when I’ve got nothing on the radar for a couple of months. Which gives me the time to identify something better, discover new clients, or invest in my education a bit more.
Interestingly, while it is the fact that we have come to New Zealand that has screwed up my career from a training and advancement point of view – it is also the fact that we came here that has allowed the huge shift in thinking that means I will now look at freelance work. We have met so many people with what can only be called “entrepreneurial spirit” and a willingness to work outside the box. We know so many more people who are their own bosses, who spend thousands of dollars a year training themselves. It a very odd parallel world sometimes.
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Squandering skills
Filed under: Getting to New Zealand, Hubby's Views, Jobs & Work
The Herald on Sunday today had a small article in their Career10 section, about how the ‘in demand’ skills of migrants are being squandered – or rather being ignored in the first place. [Sorry, no online copy that I can find]
It’s an all round in-offensive article that doesn’t really go anywhere. However it does provide a couple of useful pointers;
1. There is a mentoring scheme called OMEGA running for new migrants who don’t have a job yet. Only it’s limited to Auckland. Ho hum..
Still, OMEGA has the right idea, and it’s better than nothing. They run a number of different scheme’s to help new emigrants link up with employers and get some experience, understanding and knowledge of the Kiwi workplace.
I’m not familiar with OMEGA, more reading to come, so I’m not in a position to endorse it as such. They are there though, and in place to help new migrants. Something that’s rare and very welcome.
2. Kiwi employers tend to give preference in jobs to people they know. This is something we’ve mentioned previously, and the general thing is that most NZ cities are so small, anyone knows pretty much everyone else, or is related to them. {For example, a German migrant friend of ours was appearing in a Terry Pratchett play being put on by a local amateur dramatic society. We went. It was good, I talk about this to a colleague at work the next day. His aunt was playing one of the lead witches. It just works like that.}
Since many Kiwi companies are (relatively) small, they are indeed interviewing someone as if to invite them to join their family. They want to have confidence you will fit in with everyone else. Rather than being particular on exactly which industry certifications you’ve got in the last few years. Of course the down side is that if you’re new to the country, you wont know many people. And many people wont know you.
While you first job may not be ideal, it gets you working, bring money in, and starts to get you connected with others in the industry. This is when the whole ‘contacts’ and knowing people kicks in.
So my take? Don’t worry that much about not knowing people from the start, it’ll happen once you’re working and your next job can be that ideal one it would be great to land.
Which is exactly where OMEGA can fit in, helping people start even if it’s just a stepping stone to the job that really spins your wheels.
Tax Changes in New Zealand: What’s Going Down.
Filed under: Cost of living, Economics, General Budgeting, Jobs & Work
I thought I would start this with the (possibly) good news.
In fact this bit is really good – if the new Zealand government were do it, it could make life very cosy indeed for Skilled Migrants who can earn relatively high salaries. (Right up until New Zealand companies screw you over by saying that you don’t need to earn as much now anyway).
Top Income tax Rate could go to down to 30%.
At the moment if you earn over $70,000 (by no means what should be considered a high salary) you pay 38% tax on every dollar over that level. Now this is being touted as saving someone about $20 a week – which really isn’t a whole lot.
But what happens if you earn $100k a year?
I’ve worked out that if just the top tax bracket comes down from the current 38% to 30% then you end up paying $406 a month less in tax. So instead of your take home pay being about $5,831 it would now be $6,237.
That’s an extra 116 coffees a month!
(Rough calculations only – this does not include ACC or Kiwisaver deductions.)
Also, trust and company tax rates may be going down – but it’s a bit unclear. The Tax Working group says it wants to make personal, trust and company tax rates all the same to avoid people being able to siphon off income into lower tax bands. So dropping the personal tax rate to 30% and then dropping the company tax rate below its current 30% doesn’t actually make that happen.
Why is this happening?
Because looking at this graph below shows that until you earn over $240,000 a year in New Zealand, you are better off from an Income Tax point of view moving to Australia because their income tax rates are cheaper. This of course completely ignores whether the cost of living is higher in Australia – but its something that is causing a lot of Kiwi’s to move.
In fact – this whole tax report seems to start with the theory that personal income tax rates must come down. That takes up roughly 5 pages of the report. The other 74 pages are all about the taxes that need to go up in order to pay for it.
There’s a surprise.
We will apparently know exactly what the income tax rates will be in May this year – at the budget. When we will also get the bad news about who amongst us has to pay for it all.
I don’t think that’s going to be a good day for me.
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Holiday in NZ vs. Here for good
Filed under: Cost of living, Getting to New Zealand, Hubby's Views, Life in New Zealand
A friend from the UK came to visit yesterday. He’s been holidaying in NZ on an almost annual basis for the past two decades. Before we emigrated out here, he was one of the few people I knew who had really spent any significant time in NZ – so he was a great source of information, places to go, what NZ was really like etc.
This time, he is in NZ for six months after he left his former employer with enough cash in hand to tide him over for a year or so. {nope, he’s not one of the Westpac fugitives}.
So as you do when you’re young(ish) and single, he’s spending six months travelling around NZ, staying with various friends, and enjoying being away from the UK winter. And UK politics (until today – sorry D!)
He’s found this trip quite a revelation. Where as on previous holidays he’s been ‘right which restaurant shall we head to this evening?”, ‘cos you do when you’re on holiday and NZ restaurants are (relatively) inexpensive. Only this time, with no job and much longer here, he’s been to the supermarkets – and looked at the actual cost of living here.
So I asked him, what did he find as the major differences on the extended trip? In order of immediate response he said;
Bloody hell, the cost of [supermarket] food is high
I can’t believe the [high] cost of electricity
OMG, Kiwi’s don’t know how to drive, they’re lethal on the roads
Enough said.
Now it sounds (to us) like he’s living it up here, some motorcycling, off to get his glider pilots license, more biking, horse riding, more motorcycling and the odd biking race, plenty of outdoorsy stuff that is what NZ does best. The joys of free time and no domestic obligations, but he’s shocked at the cost of living.
For example, his UK electricity costs for three months equate to different friends average NZ monthly electricity costs.
For all that he’s spent plenty of time riding the roads of NZ previously, it’s only now that he’s absorbing how poorly some Kiwi’s drive. We’re all still undecided whether this is because;
- People are (relatively) inexperienced, compared to driving in and around London on a weekly basis. Or long stretches of packed motorways for hours on end. Or stuck in half hour traffic jams during a morning rush hour to get into some middle market town for work/shopping/whatever
Or
- With the slower speeds and lower levels of traffic, people are more relaxed, and there really is time to pull out right in front of other cars because they’re only traveling at 50 kph. And besides, the other guy can always stop if he gets too close or almost hits me.
Not that any of this seriously colours his perspective on Quality of Life vs Standard of Living. The Standard of Living may be higher in the UK, but you have to work harder or longer to achieve that, and then work even more to maintain it. The cost of servicing a BMW M3 can be a bugger.
He still see’s that NZ has a better Quality of Life, even if traffic has grown a lot in 20 years. Now he (had) a really good job, with high pay, good bonuses and plenty of perks. So he’s used to spending plenty of money on things as required. The cost of living is still a shock, which is at least reassuring for us that we’ve not got a uniquely daft perspective.
It’s interesting to hear from someone with a long term love affair with NZ, that he see’s the same stuff we did five years ago when we arrived.
And that it’s still worth being here.
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