Friday, June 4, 2010

Working out your real work wage

I’ve been thinking a lot about how much my time is worth, which led me to think about my hourly wage.

I used to earn $20 hour which was average. After tax that’s about $14 (assuming 30% tax bracket). Looking at all my work related expenses, my wage was not really that good. Have a look at yours and tell me what you think.

From that $14hr, how much goes to parking, work wardrobe, lunches at work, childcare, petrol and car maintenance to get there or public transport fares. What else do you need for your work? Then take into account the commute to and from work. How long does that take, add it onto the hours you work, then see what your hourly rate is. Mine looked like this

Work hours 43.5
Weekly commute 2.5
Getting ready for work 2.5 (yes, you get ready every day any way, but I took longer getting ready for work than anything else by 30mins a day)
Getting hair coloured 1 (I was a hairdresser, expected to change my colour regularly in line with fashion, but had to come in on my day off to have it done and it usually took 6 hours, as I was slotted in between clients and was the very last priority. 6 hours, every 6 weeks. It sucked.)

So make actual work hours were 49.5 hours a week.
Next, my work related expenses looked like this
Wardrobe $15wk (very moderate estimate)
Lunches $25 wk (ok, by choice, but at home I do not have that temptation)
Birthday presents/social club, all those things I wanted no part of $20wk
Train fare/juggling car rides sometimes with my husband $50wk
Courses/equipment $30wk

So all up it cost me $140 to just be at work. Now since my wage was $14hr after tax for 43.5hrs, my wage was $609. Minus the $140 to be there leaves me with $469. Divide that by the hours really put in and I was working for $9.47hr. That’s less than HALF what I was apparently earning!

So if I want say a $400 games console (Wii, Ninetendo, Playstation, take your pick), round my “wage” up to $10 that would be 40 hours I would have to work to buy it. All of a sudden it’s not worth it to me.

I haven’t read Your Money or Your Life, but I am going to in the next week. Apparently they discuss this sort of thing in it, so I will definitely be interested in it.

Have you sat down and worked out your real wage?

5 comments :

  1. Hmmm...when you put it like that!!

    It would also be interesting to work it out from the other angle: as in, how much it also costs your boss to employ you.

    When you add in superannuation, insurances, office space, training, recruitment expenses, electricity, long service leave etc, the wage you are actually worth is probably about double what you get paid (before tax).

    Most of us are worth a lot more than we think, and so when we go into business for ourselves, we undercharge, because we are conditioned to think of our worth in terms of our taxable income, but that is actually only part of it. Hope that makes sense, LOL?!

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  2. lol Draft Queen.

    Katiegirl, scary thing is, form the other angle, having been on that end, you usually need a worker to produce 3 times thier wage to pay their way. Scary, hey?

    There are just so many expenses to employ someone. (Though it is usually absolutely worth it)

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  3. Love looking at these different perspectives. great job on this one!
    thanks! :)

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  4. @ Katiegirl,

    Absolutely! I've learned the same lesson myself since taking early retirement. That's why I've chosen to do seasonal part time work for small companies, instead of "consulting" on my own.

    @ 1Million Dollar Challenge,

    Stopped by for the first time. Good article on how to think about our "real" wage. It's one reason that I usually only apply for part time jobs less than 10 km from my home.

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