I found out that my previous employer was advertising for my old position. This immediately prompted a bit of job-stalking.
The problem with job-stalking is that it inevitably leads to job-browsing.
I soon found out that while I’m on a five-figure salary here, I’d be on an easy six-figure salary in Australia, doing the same work.
Of course this doesn’t take into account tax and exchange rates.
So without divulging my salary, let’s look at a typical example.
In Auckland $NZD 80K is a reasonable salary for an experienced software developer, so let’s assume that’s my salary (it’s not).
In Sydney/Melbourne I could expect somewhere around $AUD 110K, probably more.
Now, let’s look at the tax rates for both New Zealand and Australia.
Australian Income Tax Rates
| Taxable income | Tax on this income | Effective Tax Rate |
|---|---|---|
| $0 – $6,000 | Nil | 0% |
| $6,001 – $30,000 | 15c for each $1 over $6,000 | 0% – 12% |
| $30,001 – $75,000 | $3,600 plus 30c for each $1 over $30,000 | 12% – 22.8% |
| $75,001 – $150,000 | $17,100 plus 40c for each $1 over $75,000 | 22.8% – 31.4% |
| Over $150,000 | $47,100 plus 45c for each $1 over $150,000 | 31.4% – 45 |
New Zealand Income Tax Rates
| Taxable income | Tax on this income | Effective Tax Rate |
|---|---|---|
| $0 – $38,000 | 19.5c for each $1 | 19.5% |
| $38,001 – $60,000 | $7,410 plus 33c for each $1 over $38,000 | 33% |
| Over $60,000 | $14,670 plus 39c for each $1 over $60,000 | 39% |
It is also worth nothing that GST in New Zealand is 12.5% and in Australia is 10%.
Thus, a software developer in New Zealand on 80K, would pay approximately 22.5K in income tax, leaving them with $NZD 57.5K.
The same software developer in Australia on 110K would pay approximately 31K in income tax, leaving them with $AUD 79K.
Assuming the current exchange rate, then $AUD 79K equates to $NZD 90K.
So by paying just $300 for a one-way airfare to Melbourne I’d be over $NZD 30K better off per year after tax.
And people wonder why there’s a brain drain.
“In Auckland $NZD 80K is a reasonable salary for an experienced software developer, so let’s assume that’s my salary (it’s not).”
Crap, it’s not mine either