Yahoo Lifestyle The pay rise Aussies need to keep up with inflation
The cost of living is 3.6 per cent annually, meaning the average Aussie needs to boost their income by at lest $3,500 to keep up with inflation.
Aussies on an average salary need a pay rise of a few thousand dollars if they want to keep up with inflation. Consumer Price Index (CPI) figures for the first quarter of 2024 were released this week and it revealed yearly inflation now sits at 3.6 per cent.
The Australian Bureau of Statistics (ABS) data showed the CPI rose 1 per cent for the first three months of this year, which was 0.2 per cent more than forecast. The 3.6 per cent annual CPI rate in the 12 months to March is lower than the 4.1 annual rate seen up to the December 2023 quarter, and far smaller than the peak 7.8 per cent rate in the December 2022 quarter.
While this was the fifth consecutive quarter of lower annual inflation, it still means you're in need of a salary boost.
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Analysis from Canstar has revealed the average working Australian earning an annual income of $98,218 would have needed a $3,536 pay rise to have kept pace with inflation over the past year.
Those earning $70,000 required a $2,520 jump in their pay to keep up with inflation, while those on the other end of the spectrum, people with a $210,000 salary, needed $7,560 to be in the same place.
Canstar said Aussies will no doubt be feeling the pinch on their wallets during this cost-of-living crisis, but there are ways to ease that pressure without boosting your salary.
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“If you haven’t job hopped or your boss hasn’t increased your wages to keep pace with inflation in the past year, a common case for many working Australians, you might need to take matters into your own hands to offset the shortfall,” Canstar’s Group Executive Financial Services, Steve Mickenbecker, said.
“According to Canstar’s Cost of Living Comparison, switching to the cheapest or best-value options for expenses like home loans, car insurance, electricity, internet, phone plans and even the weekly grocery shop can amount to savings.
"It may be possible to save close to $12,741 in the first year alone by making changes. Savings like this could improve the financial strain caused by inflation on household budgets.”
Inflation Applied to Annual Income (3.6%) | |
Income | Dollar Increase |
$70,000 | $2,520 |
$98,218 (Average full-time earnings) | $3,536 |
$110,000 | $3,960 |
$130,000 | $4,680 |
$150,000 | $5,400 |
$170,000 | $6,120 |
$190,000 | $6,840 |
$210,000 | $7,560 |
How to get a pay rise
Convincing your boss to give you more money can be a tough sell, but here are tips to follow if you want give your request the best possible chance at success:
Compile evidence of your achievements: Ensure you focus your reasons on the mutual exchange of value rather than personal reasons like you wanting to be able to afford rent. Come to the meeting prepared with your recent achievements and explain how and why you’re providing value to the business.
Know your market value: A discussion about pay requires a bit of homework and you need to make sure you've looked at what other companies are offering for the same role.
What's in a number?: Once you've compared your request with the rest of the market, make sure you examine how much you'll be getting after tax and other payments are taken out. The more informed you are when negotiating, the better positioned you’ll be in case there are counter-offers from your manager.
Prepare what you're going to say: You don't want to walk into that meeting room umming and ahing all over the place. Make sure you rehearse your pitch and ensure you keep your emotions as neutral as possible. Fair Work Australia has a free online course called Difficult Conversations in the Workplace that gives advice on how to establish more effective communication with their boss and/or colleagues.
Don't be afraid to play the long game: If you do get a salary increase offer from your boss, you don't have to accept it immediately if you're unhappy with it. You can tell your manager that you need some time and that can allow you to come back with another offer.
Maybe it's time to move: You can get a pay rise by switching jobs if you feel like your current workplace isn't valuing you as highly as you think. Professional recruiter and career coach Tammie Christofis Ballis said you should learn as much as you can in your current job and then "use that experience to get a pay rise at another workplace".
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