Alan ‘Bo’ BorensteinWhat is a good family income in Vancouver?
NGL, living in Vancouver comes with a hefty price tag. We can attest to the fact that the cost of living here can be a tad intimidating, and if you’re laughing right now because “a tad intimidating” seems like an understatement, we hear you.
But you still want to know what the magic number is, right? A figure that will allow you to enjoy the perks of living in one of the most beautiful cities in the world? Let’s get to it.
WHAT IS A GOOD FAMILY INCOME IN VANCOUVER?
What’s a good income for a family in Vancouver?
In Vancouver, a good family income is about $100,000 CAD (or a monthly income of about $8,000 CAD). If you have more than two kids, you may need to earn more like $120,000 to $150,000 annually to live comfortably in the city.
This amount takes into account a number of factors, including housing, cost of living, taxes, transportation, government benefits, and healthcare.
The minimum wage in British Columbia is currently CAD $16.75 an hour, and it applies across the board, whether you’re paid by the hour, commission, or incentives.
But what’s the average income in Vancouver? Well, that depends on where you live. Check out the table below to see what we’re talking about:
Data from CMHC via https://www03.cmhc-schl.gc.ca/
Take Vancouver, for example. The annual average here is $79,422 CAD, while in areas like Metro Vancouver, the average household income after taxes is $142,856 CAD.
While both Vancouver and Metro Vancouver pay a flat provincial rate of 5.06% in BC, the City of Vancouver charges an additional municipal tax rate of 0.48%, which means that residents of the city pay a slightly higher tax rate than those in Metro Vancouver.
Let’s have a look at the major expenses and how they break down.
What are the Factors in Determining a Good Family Income in Vancouver?
Your Housing Situation: Where You Live & How You Commute
Alrighty, first up we have your housing situation. Now, this factor contributes greatly in determining how much your income should be, because it comes with a literal “price”.
Vancouver is one of the most expensive cities to own a house in according to the 2021 study by the Urban Reform Institute’s Demographia International Housing Affordability Study.
For renters, let’s say you’re a family of 4. The median rent for a 3-bedroom house in Vancouver is around CAD 4,958 to 6,000. The city continues to be the most expensive city in Canada for renters, according to a national rent report.
Data from Moving Waldo via https://www.movingwaldo.com/
On the other hand, homeowners have the added expense of property taxes and maintenance. According to the Real Estate Board of Greater Vancouver, the average home price in Vancouver is a whopping CAD 1,123,400.
Data from Redfin and Zillow via https://www.redfin.com/ and https://www.zillow.com/
Your work commute is another consideration. For this, maybe consider researching the best neighborhoods for families in Vancouver.
Being able to live and work in the same area as your office or your children’s school cuts down on travel expenses so you may need to get creative in budgeting your finances.
Your Family’s Cost of Living
If you have children, it’s already expected that expenses would go up, not only in necessities like housing and food, but also in utilities.
According to Numbeo, the estimated monthly living costs for a family of four in Vancouver is CAD 4,972. This is without rent mind you.
The typical utilities in Vancouver cover electricity, internet, heating and cooling, water and garbage disposal—all of which averages to between $300-400/month.
Food expenses are another significant expense that families need to consider. The cost of groceries in Vancouver costs around CAD 360 per month.
Eating out will cost you more as you would spend CAD 120 – 300 per meal. Based on these numbers, Vancouver’s average monthly food cost is CAD 227.35 per person monthly.
The Amount of Tax Deducted from Your Family’s Income
As always, the adjustments in terms of income brackets account for regular inflation levels. As of 2023, Canada’s federal tax brackets have seen an increase by 6.3%, which leads to the following tax scheme:
Table: CTVNews.ca / Source: Canada Revenue Agency
This means that for the average household income expected for families to earn in Vancouver and other parts of Canada, at least a fifth of their income will go to their tax.
This is due to consumer goods cost also adjusting due to the movements of salary rates. While this affects the take-home rate for earners in the family, tax bracket indexations are good.
This is because indexations adjust the amount of tax, instead of disproportionately retaining taxes, according to inflation.
Government Benefits
Government benefits can play a significant role in determining your ideal income in Vancouver. These benefits can provide additional financial support to individuals and families.
Here’s some good news. The Province of British Columbia actually has a family benefit program that supports eligible families with children under the age of 18 to receive benefit payments.
$133.33 per month for your first child
$83.33 per month for your second child
$66.67 per month for each additional child
Data from the Province of British Columbia via https://wwww.gov.bc.ca/
Another government benefit that can help families in Vancouver is the Registered Education Savings Plan (RESP). This program helps families save for their children’s post-secondary education by providing matching funds from the government.
Additionally, the Canada Pension Plan (CPP) and the Old Age Security (OAS) are two government programs that provide financial support to seniors.
So when determining your ideal income in Vancouver, it is important to consider the impact of government benefits on your overall financial situation.
Healthcare Coverage
Next up we have healthcare. The cost of healthcare in Canada can be significant, and without adequate coverage, it can be challenging to access the medical care you need.
But fear not, BC residents actually have access to the Medical Services Plan (MSP), which provides basic medical coverage to all eligible residents.
But hey, the cost of MSP premiums can vary based on income, and the program does not cover all medical expenses.
For those who require additional medical coverage, private health insurance can be an option. However, the cost of private health insurance can cost CAD 69.70 per month according to Health Insurance BC.
Data from the Fraser Institute via https://www.fraserinstitute.org/
To meet your healthcare needs, you must factor in the cost of medical coverage, prescription drugs, and unexpected medical costs when calculating your income needs.
Tips for Families to Save in Vancouver
Register Your Child/Children for Government Benefits
Listen up! One of the many ways for you to save money is to register your child for the Canada child benefit, as this automatically makes you eligible for the B.C. family benefit.
To find out your monthly benefit amount, you can use this handy federal child and family benefits calculator!
Another government benefit available to families in British Columbia is the BC Early Childhood Tax Benefit (BCECTB). It’s a tax-free monthly payment that provides financial assistance to eligible families with children under the age of six.
Families with children with disabilities may also be eligible for the Disability Tax Credit (DTC) and the Registered Disability Savings Plan (RDSP).
By registering your children for government benefits, you can help offset the cost of raising a family in Vancouver. These benefits can help cover the cost of food, clothing, childcare, and other essential expenses.
Shop at Discount Grocery Stores
Shop at discount grocery stores! Trust us, this will save you so much money on the long run. Why? Because these stores have their own product brands and weekly sales and specials.
- Marketplace IGA – has weekly flyer features with on-sale products! Getting an AIR MILES Collector card here will help you earn Reward Miles.
- No Frills – when you shop here, you’ll get redeemable points when you purchase with a PC Optimum card. Also has weekly flyers!
- Safeway – aside from weekly flyers, they also allow buyers to earn Reward Miles by purchasing with the AIR MILES Collector card.
- Save on Foods – shopping here with the More Rewards card allows you to earn points every time you shop here. They also release weekly flyers every Wednesday.
Pay Your Taxes on Time
Paying your taxes on time is crucial to avoiding late payment penalties and interest charges. These charges can add up quickly and significantly increase the amount you owe.
For personal income taxes, the CRA charges a late-filing penalty of 5% of the balance owed plus 1% of the balance owed for each month that the return is late, up to a maximum of 12 months.
For property taxes, the penalty for late payment is a flat 5% on the unpaid balance after the due date, which is typically in early July each year.
To avoid late payment penalties and interest charges, it’s important to file your tax return on time and pay your taxes by the due date.
You can do this online through the Canada Revenue Agency (CRA) website, by mail, or through a certified tax professional.
Pick a Neighborhood near Your Workplace And/or Your Children’s School
So which Vancouver neighborhood should you live in? Well, ideally, it’s wise to pick a place that’s near your workplace, and if possible, also near your children’s school.
By selecting a neighborhood that is close to your daily destinations, you can save money on transportation costs such as gas, transit fares, and car maintenance.
Similarly, if you choose a neighborhood that is close to your children’s school, you can reduce the time and cost of commuting.
Utilize the City’s Landmarks for Entertainment
Look, we get it. You want to let your kids experience the joys of watching a movie in the cinema, or watch a sports game with a huge crowd. But before you do, let us tell you, it’s not cheap.
Data from Numbeo via https://www.numbeo.com/
So maybe hear us out, because there are actually a lot of cheap things to do in Vancouver! That’s why we highly advise that you utilize the city’s landmarks such as Stanley Park, Kitsilano Beach, and Granville Island.
Many of these landmarks and attractions are free or low-cost, which can help you save money on entertainment expenses.
Also, lucky for us, Vancouver also has a lot of festivals and events throughout the year, such as the Vancouver Folk Music Festival and the Vancouver Pride Parade. These events are free to attend, and offer a chance to experience the city’s diverse community.
So that’s about it! By understanding these factors, you’re able to calculate how much you need to provide for your family and how to make wise financial decisions.
If you’re like us, we’re going to need more help, so we highly suggest you read our article on tips for families living in Vancouver. Trust us, you’re gonna need it.
