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What’s a good income in Auckland

August 22nd, 2012 | Posted by Wendy Simpson-Fox in Benchmarking | Chartered Accountant Auckland

iStock_000012876208XSmallWhat’s a good income?  It’s all relative isn’t it because once upon a time, twenty cents covered my entire weekly food bill (which consisted of a small white paper bag containing a twenty cent mixture of lollies). These days though, word has it that $250,000 is the new $100,000. Even Comedians are joking about $100,000 being astro-money in Otago but poverty line for Aucklanders.

Joking aside, the average income of a New Zealander is said to be around $50,000 but don’t feel too chuffed about beating that because it includes a hugely diverse range of incomes (from Nana’s to unskilled people, small-town earners and even a few rich listers).  A smarter way, is to compare your earnings to others in your industry and city.

If we take the design industry as an example*, our research suggests that:

  1. The average income for a Web Design business owner is $68,000
  2. The top Web Design businesses are earning profits in excess of $385,000
  3. Specialised design services do even better with the top three having an average profit of almost $450,000 each
  4. The bottom quarter are earning less than $14,000.  On the surface $14,000 doesn’t seem like a terribly good income but other factors need to be considered including how many hours it took to earn. If the owner only worked 50 hours that year then their real hourly income is a cosy $280 but if they slogged it out, doing normal business hours, for an entire year then they’ve sunk well below minimum wage.  (A normal employee would be grabbing media attention demanding compensation for such a disgusting pay rate but the weary business owner is more likely to suffer silently hoping things will pick up).

Have you ever thought about about what you really earn per hour (not what you charge)?  To find out, simply divide what you earned last year by the number of hours you put into your business and be honest.  Hopefully your rate beats minimum wage but is it more than what you’d earn in a job? If you’re hoping it’ll get better then ask yourself what you’re doing differently because doing the same thing over and over and expecting different results is how Einstein defined insanity.

Generally speaking, we agree that $250,000 is a good income but what’s really impressive is the hardworking Mum & Dad businesses earning mega incomes ($500,000 to $5 million) because their tax bill alone buys this country a whole lot of social goodness.

*Okay, so you’re not a designer.  Get in touch with us (Boutique Financial Chartered Accountants) and we’ll prepare a Benchmarking Report showing exactly what the good, bad and ugly businesses in your industry are earning. [Normally $450 but free this month to all new and existing clients]

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Copyright © 2012 Boutique Limited T/A Boutique Financial Chartered Accountants Auckland All Rights Reserved.    This publication must be read in accordance with the attached disclaimer.

 

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