There are many reasons why people highly value living in Melbourne. The city boasts multiple transport options, plenty of job opportunities, and low crime rates, making it one of the most liveable places in Australia.
Of course, how you live in Melbourne dramatically depends on whether you have a good salary.
So what is a livable salary in Melbourne?
A good income in Melbourne is between $66,000 and $100,000 per year or $5,500 to $8,300 per month. A family of four will need $3,067 per month to live a comfortable but not lavish life, while a single person will need about $1,500 a month.
Although the cost of living may be high compared to other places, the salaries are good. Melbourne offers a better chance to scale high, provided you set your mind to it.
In this article, I’ll look at Melbourne’s average salaries, so don’t miss it!
What is a good salary in Melbourne?
A good salary to give you a comfortable life in Melbourne is $100,000 per annum before taxes. This salary will cater to housing, food, transport, utilities, entertainment, recreation, and other benefits.
It’s not unusual to earn this amount in Melbourne since the city boasts big companies and a strong job market.
I recommend you aim for at least $5,500 per month if you start your career in Melbourne. The sufficiency of your salary here will be determined by your spending habits, financial commitments, and the lifestyle you want.
Here are the costs you should expect to cover with this salary.
Melbourne is the second costliest city in Australia. Rent is a significant expense, taking a major part of a person’s income. Rental costs are very high near the city center, so moving further outside the city will help you save some money.
Rental costs depend on the suburb you live in. For instance, the rental cost for a two-bedroom in Inner Melbourne is $1,800, while in Western Melbourne, it’s $1,520 per month. This amount doesn’t include utilities such as internet, water, and electricity.
The cost of housing in Melbourne keeps growing, especially for houses that are more appropriate for families. Also, landlords are taking advantage of the high demand for houses.
Public primary schools in Melbourne are free to attend. However, there is a voluntary school levy that parents are supposed to pay per student in a term.
On the other hand, universities and secondary schools are not free, but parents receive education subsidies from the government.
Unless you want your child to attend a private school, you don’t have to worry about school fees in Melbourne. If you opt for private schools, the least you will pay in a year is $25,000.
The average cost of childcare in Melbourne for a baby between 0-12 months is $100 per day. This amount translates to $2,500 a year on average.
The cost of childcare for toddlers may be higher still depending on where you are in Melbourne and the hours your child will stay at the childcare center.
The prices of food and groceries in Melbourne vary with the season. For instance, food is more expensive in the winter and cheaper in the summer. On average, you can expect to spend between $300 and $500 per month on food for a family of four.
Eating out in Melbourne can be cheaper or more expensive depending on the restaurant. A good meal in a nice restaurant can cost $25.
Recreation and entertainment
Australia is a developed country, so the cost of entertainment and recreation here may be high. On average, two tickets to a movie may cost $23.
Suppose you’re an introvert and would like to enjoy your entertainment at home. In that case, you can buy a subscription to a digital cable and satellite TV service in Australia. You will sign a contract and pay for the installation charges for subscriptions.
Recreation in Melbourne is relatively inexpensive, especially if you’re an outdoor person. There are so many activities and places you can visit for free.
Melbourne has many transport options, including buses, trains, trams, and taxis. You don’t need to drive to get around the city since public transport is everywhere and affordable. All you need is a Myki card which you can buy at train stations, tram stops, or bus interchanges.
When using a tram, expect to pay $3 per trip across the CBD or when visiting the city’s suburbs. The cost of a train ticket when traveling for long distances or going out of town is $4.
Trains are the quicker transport options in Melbourne since you won’t have to wait in traffic. However, they may be packed during peak hours.
On the other hand, buses are expensive and best for long trips. A bus ticket in Melbourne goes for $4.60 within the CBD and the suburbs.
Don’t be surprised that most city dwellers in Melbourne don’t own cars. They are used to public transport.
The definition of a comfortable lifestyle is different for people. The above budget may offer your family a comfortable lifestyle, but it may be less comfortable for others.
How much does the average person make in Melbourne?
The average salary in Melbourne is between $4,000 and $5,500 per month. This translates to $48,000 and $66,000 per year. However, wages in Melbourne significantly depend on the type of job.
Here is an overview of what people in different industries and positions in Melbourne earn.
- Cleaners/waiters/guards – The average salary of people in these job categories is $15 per hour. If they work 12 hours a day, their monthly salary will be $5,400.
- Professionals – On average, lawyers, engineers, doctors, and teachers earn between $70,000 and $140,000 per year. The salary may be more for those working for the government thanks to the many benefits the government offers.
- Directors/CEOs – These are highly paid people in Melbourne with a salary range of $180,000 to $200,000 per year. Those working in the health and financial government sectors may earn more than this.
Due to gender discrimination in companies, the above salaries may differ between men and women. Women in Australia receive less pay than men.
How is taxation in Melbourne?
Taxation in Melbourne is the same as in other parts of Australia. Australian citizens are taxed on income, including those from abroad sources and foreigners on Australian-sourced income.
The country has a system of establishing whether income is from Australia or abroad. In this case, the income source is your employment or business place.
The government uses all the taxes collected in Melbourne to provide healthcare, defense, education, railways, and road services. If employed, you must get a tax file number used by the tax officers to track your tax compliance.
Here is a brief overview of the kind of taxes you should expect to pay in Melbourne.
Taxes on income
Taxes on income is paid from Australia and worldwide income. This income is from interest, business, dividends, and rent. The income tax, however, has fewer deductions due to expenses incurred in making the income and several other deductions that the law allows.
The tax rate in Melbourne is determined by how much you earn. You will be taxed highly if your salary or business profits are high. The lowest rate is 18.8 percent, while the highest is 45 percent, which is only charged on incomes exceeding $180,000.
The income on tax is divided into two categories: individuals and companies. Let’s briefly discuss each so you know what to expect.
- Individual – Individual tax is charged on capital gains and income. Whether a foreigner or an Australian resident, you must pay this tax. If your income increases, the amount of individual tax you also pay increases.
- Companies – Any income that a company receives is taxable to the company. This is after applying rules regarding the source and residency. Unlike individual taxes, companies in Australia are taxed at a flat rate of 30 percent regardless of how much they make.
Now that I’ve discussed the basics of taxes in Melbourne, how much do you pay for your income? The amount depends on what you make in a year. Going by the 18-percent tax rate, if you earn $100,000, you will be paying $18,000 in a year.
Capital gains tax
This tax is imposed on gains from the sale of assets and is mainly paid for by those in the real estate and property businesses. This category’s assets include residences, motor vehicles, and real property.
Which are the highest-paid jobs in Melbourne?
The job market in Melbourne is competitive, and doors continue to open for professionals.
You may be wondering which jobs pay the most in the city. The highest-paying job in Melbourne is a surgeon. They earn almost four times what an average person makes in a year. A surgeon can make $217,808 per annum.
Here is a list of other top-paying jobs:
- IT Specialist – $83,800
- Software engineer – $82,500
- Marketing director – $92,250
- College professor – $127,100
- Bank manager – $186,000
- Chief executive officer – $ 187,710
- Legal secretary – $190,300
Are there employee benefits in Melbourne?
Melbourne has two types of employee benefits: mandatory and supplementary. Here is a brief discussion of each of them.
These are the benefits that employers must offer their employees. Failure to comply with these can lead to hefty fines.
According to the legislative requirements in Australia, any employee must contribute to a pension. Employers must allow their employees to choose the pension plan they prefer.
The minimum contribution rate is 10 percent, but this amount increases every year by 0.5 percent. The contribution strategy to the pension plan varies from industry to industry.
Paid off time
Paid-off time is diverse in Melbourne. Below are the most common ones.
- Long service leave – This is the leave that workers take after working for 10 years for the same employer. Full-time, part-time, and casual workers are entitled to this leave.
- Holiday pay – Holiday pay is pay offered to employees during public holidays. In Melbourne, all full-time and part-time employees are entitled to 20 paid holidays per year according to the law. Holiday pay is usually a supplement to the salary.
- Maternity/paternity leave – Parental leaves are not legislated, but some companies offer them. However, the government demands that employers give their workers parental leave payment. In Melbourne, maternity/paternity leave is for three months.
- Sick pay – Sick pay in Melbourne and Australia at large is not official. Employers voluntarily offer up to 10 days of sick leave. Sometimes, they also give five days of bereavement leave.
These are benefits offered in addition to the mandatory benefits. Here is a mention of some.
- Health insurance
- Group insurance
- Company cars
- Education advancement programs
- Childcare centers and subsidiaries
- Flexible benefits
- Workplace canteens
- Flu shots and vaccinations
- Increased recreation activities
- Voluntary benefits
The Most expensive suburbs in Melbourne
If you intend to live and work in Melbourne, you must know the most expensive suburbs in the city so you can choose where to settle. Below is a list of suburbs home to affluent people in Melbourne.
Kooyong is 7 kilometers from the CBD and is filled with parklands, fields, and beautiful apartments. The average rent per month here is $3,600 while buying a house will cost not less than $3.6 million. This suburb is the most expensive in Melbourne.
This suburb is famous for its opulent historic residences and leafy green boulevards. Canterbury is home to the most beautiful yet expensive homes in Australia. The average rental price of a house in Canterbury is $4,000 per month.
Malvern is 8 kilometers from the CBD and is a charming neighborhood. It boasts open spaces, shopping stores, greenery, and beautiful homes.
Most people living here are prosperous families and retirees. The rental price for a one-bedroom house is $1,800 per month.
A good salary in Melbourne is between $5,500 and $8,300 per month. This amount will cater to all your basic needs, entertainment, and recreation. I hope this guide helps you know what to expect if you plan to move to Melbourne.