With all of this talk about inflation and rising interest rates, it might be time to re-evaluate what passes as a good salary these days in Canada. Many people wonder if $100k is a good salary in Canada in 2022. In this article, we’ll discuss how a $100,000 salary in Canada stacks up against the average Canadian salary in 2022.
A salary of $100,000 in Canada is considered well above average. Of course, your family situation, and geography will play a part in determining the value and buying power of that $100,000, but overall it is more than enough to live a comfortable life in any Canadian city.
Someone living in Northern Manitoba on a $100,000 salary will likely have much more disposable income than someone making 100k in Toronto or Vancouver.
Still, considering the average annual salary in Canada sits at between $68,000 and $72,000, making $100,000 per year is well above the median income.
Is $100,000 A Good Salary in Canada?
If we’re comparing it to the average annual salary across Canada, then yes, $100k is an excellent salary. As of 2019, only 15% of Canadians made an annual salary of 100k or more, making it a very exclusive group within Canada.
We also know that the more you make in Canada, the more you are taxed when it comes time for income tax season. So even though your after-tax pay might not be over $100,000, it should still be more than enough to provide a very comfortable lifestyle for your household.
Now let’s be clear: $100,000 is a psychological level of salary. There isn’t much difference overall between say an annual salary of $80,000 and $100,000.
An annual salary of $100k likely won’t lead you to create generational wealth but with smart money management and sound investing strategies, you should be financially stable for years to come.
What Types of Jobs in Canada Pay More than 100K?
Are you hunting for a job in Canada that will pay you more than $100K every year?
Given how few people make over $100,000, it stands to reason that there isn’t a long list of jobs that will pay you that much in a year. Here is a quick list of professions that pay more than $100,000 in Canada:
- Senior Management and Executives
- Software Developers
- Senior Accountants
These are just to name a few. You might notice that most if not all of these professions require specialized education and training. This is something you’ll need to prepare for if you want a job that pays more than $100,000.
What Can You Afford If You Make $100K in Canada?
Insert the housing market joke here.
But in all seriousness, earlier this year the average price of a home in Canada reached nearly double that of the United States. Canada’s housing market is primarily being propped up by British Columbia and Ontario, and the recent rise in interest rates is already bringing the prices of homes down across the country.
So if you make $100K in Ontario or BC, then it might not be as lucrative of a salary then if you lived in a place like Winnipeg. In Winnipeg, the average cost of a home is about a third of the price of Toronto or Vancouver.
Related Financial Geek Article: 9 Quick Ways to Save Up for a Down-Payment
Other than housing in Canada, you can take advantage of some government incentives and buy a new electric vehicle. You can also indulge in your high annual salary and take a nice vacation or treat yourself to a new toy. You can even give yourself a break on your taxes and donate some of your salary to charities.
Things to Consider When You Make 100K in Canada
One major thing to consider when working a job that pays you 100K is job satisfaction. Oftentimes these high-paying jobs are very stressful and can require your attention past the normal working hours of a 9 to 5 job. If you aren’t ready to take on that kind of stress, you probably won’t be considering these types of professions.
As you might have noticed, geography plays a large part in the need for higher income. If you do live in Toronto or Vancouver, you might have to take on a job that pays upwards of 100K. If you live elsewhere in Canada, it might not be that much of a priority. The cost of living is always higher in big cities where earning potential is far greater.
What about retirement? For many of us, it might be a long way off but you should always be thinking about saving for retirement. That 100K salary is not going to last forever so you’ll definitely want to start putting some of that income aside for your retirement. Some say you’ll need 70-80% of your salary to maintain the same lifestyle in retirement so you’ll definitely want to figure out a plan of saving sooner rather than later!
The Bottom Line: Is 100K a Good Salary in Canada?
The bottom line here is that earning an annual salary of 100K in Canada is well higher than the national average. The keys that you need to keep in mind when seeking out a job that pays you 100K are the cost of living in your city, and the amount of stress that might come with that job. Other factors like saving for retirement are important to think about from an early age!
Earning an annual salary of 100K in Canada puts you in an exclusive club of high earners. With that being said, it’s up to you to spend less than you earn and implement sound investing plans. If you’re able to do these things, then 100K should provide you with an excellent quality of life as a Canadian!
Thanks for reading folks!