‘Is 170k enough?’: How much you need to earn to live in Australia

A simple question posed by a British woman who moved to Australia has exposed the harsh truth about the “Lucky Country”.

The cost-of-living crisis and rising house prices have fuelled feverish speculation about how much a person needs to earn to live in Australia.

One British parent, concerned about the cost of living in Australia, posted to an expat group on Facebook asking if $170,000 salary was enough for a comfortable life in the ‘Lucky Country’.

“Hi we are heading out to Australia with three youngish kids. Is a salary of $170k going to be enough? Heading to WA country south of Perth. Ideas if possible,” the person posted to the group anonymously.

The question quickly amassed plenty of comments offering advice about the move from the United Kingdom to Australia and the cost-of-living in Western Australia, where salaries are among some of the highest in the country.

A British couple asked fellow expats questions about the move to Australia. Picture: NCA NewsWire / Sharon Smith

“Hi, we are a family of four living in Margaret River. Cost of living like everywhere, is huge,” one local replied.

“There are so many factors that matter to help answer your question; lifestyle choices, mortgage/rent costs, school choices, childcare costs, loans, debts.

“We moved here nearly 11 years ago now, we came with 11 suitcases, no savings and two little boys. I guess life is what you make it and as much as we struggled initially, there’s plenty opportunity here to thrive still and unless you are living an extremely lavish lifestyle, you can survive happily and quite comfortably on that salary,” the person added.

“Property has gone up dramatically here. With 3 kids it would be OK but wouldn’t be too extravagant,” a second person recommended.

“If you are frugal and live within your means, and don’t have a high mortgage – then it should be okay,” another wrote.

Australian residents were split on the $170k figure. Picture: Supplied

“It honestly doesn’t go far with the cost of housing these days though.”

One mum of four, who said she was on a similar salary, said she enjoyed a “much higher standard of living” and more “disposable income” than in the UK.

“It’s manageable depending on your lifestyle, we don’t eat out much and stay at home playing in the pool a lot but we aren’t massively strict with cash either,” she added.

While many Brits encouraged the family to avoid extravagance if they moved to the region, others were shocked they had to ask if $170,000 was “enough” in the first place.

“HEAPS of people live on far less than that and YES still manage to buy a home,” one expat replied.

“Blimey. That’s a far bigger salary than pretty much everyone I know is on!,” a second wrote.

“Me and my husband have never earned that combined!! It’s plenty. We still bought a house and had holidays etc,” one woman added.

Average Aussie incomes

According to the Australian Bureau of Statistics review personal of income tax data from the 2020-21 financial year, the median income in Australia was $54,890 pre-tax.

The assessment was released in December 2023 and included all income from both employment and other sources, such as superannuation and investments, meaning Aussies like retirees and part-time workers were included in the count.

Western Australians earn among some of the highest incomes in the country. Picture: Supplied

The highest median personal incomes in Australia tended to be in mining towns where workers often earned twice as much as the typical Aussie.

Out of the top 10 suburbs with the highest incomes, WA mining towns took out positions one to six, with the final places snatched up by suburbs in Sydney’s north and east.

Top 10 suburbs with highest incomes

1. Ashburton, WA – $105,655

2. Roxby Downs, SA – $103,653

3. Peppermint Grove, WA – $96,684

4. Port Hedland, WA – $93,230

5. Weipa, Queensland – $91,494

6. East Pilbara, WA – $89,562

7. Woollahra, NSW – $84,255

8. North Sydney, NSW – $82,706

9. Mosman, NSW – $78,408

10. Lane Cove, NSW – $78,323

WA vs. Australia – Is 170k enough?

Managing Director at Finch Financial Services and WA ‘money expert’ Julian Finch, said a combined income of $170,000 is reasonable but “not an above average salary”.

“I think it’s definitely enough to survive. They’re not doing poorly in that situation, but that’s not to say they’re doing well,” Mr Finch explained.

“I think that’s probably the debate that has been going on with these stage three tax cut changes, is that people on that income aren’t rich (anymore).

“Maybe what we as the public need to get out of our heads as well, is that earning a couple hundred grand a year doesn’t necessarily make you rich. It would have done 20 years ago, but these days with the cost of living, property prices, fuel, electricity, and everything else that’s gone up, $170,000 is not an above average income.”

Salaries have reportedly not increased on par with inflation levels over the last couple of years. Picture: Supplied.

Mr Finch said a couple earning that amount with three kids could afford to borrow about $715,000 to purchase a home, with the average house price in Perth at about $923,000 according to realestate.com.

The WA ‘money expert’ pointed out borrowing capacity was the roughly same around the country. However, Mr Finch said the Australian median income would not have increased as much as expected from the ABS 2020-2021 financial year.

“It would have gone up but certainly not in line with the cost of living increases that we’ve seen, and certainly once you factor in an increase in interest rates and then all the other things,” he said.

“Fuel is up by 20 per cent, insurance is up by sort of 10 or 12 per cent, groceries are up by about 15 per cent, and salaries wouldn’t have increased at that level over the last couple of years.”

Originally published as ‘Is 170k enough?’: How much you need to earn to live in Australia