What is the minimum income needed to live in Vancouver?

There are articles and posts all over the internet talking about how expensive to live in Vancouver and how it’s one of the cities with the highest cost of living. However, it is rare to see accurate numbers that would tell you what that definition of expensive means. As newcomers, it can be difficult to evaluate what a good salary is or what an average priced rent or night out should be worth. Here’s a quick recap of what would be the minimum income needed to cover the basic expenses and bills.

Income wise, what is that number?

There will of course be people arguing that it would cost more or less to live in Vancouver than what I’m estimating and the more careful you are, the less you can spend. However, unless you’re planning on never going out and sharing an apartment with 5 other people, there will be a minimum of expenses to pay a month. Based on that total (broken down a bit below), a good income for one person would be 45 000 CAD annually, which would amount to around 3000 CAD a month after taxes (more or less). This amount still excludes a lot of expenses that some might see as a necessity (like retirement contributions or adding to your savings account or investments) but this is the minimum needed for the basics and a bit more to breathe, go out a couple of times a month.

What is that amount broken down into?

As a couple with no kids, the below numbers will be based on our current experience and what our estimate could be for one person. The larger the family, the more expenses there are so the below can be considered a minimum.

Rent

Metro Vancouver’s housing and rental costs are notoriously known for being too expensive and incomes overall have not played catch up with the cost of living. This means that for most people, rent would amount to almost half of their income.

When we initially moved in 2018, rent for our one bedroom was around 1800 CAD a month. To give an estimate as to what that would amount to, my first temporary role paid me 18.5$ an hour, which amounted to 2000 CAD after tax. That’s right! If I was a single person wanting to live alone in an apartment with a bedroom that has a door, I would have paid almost everything I made on rent. However, even if I stayed in a bachelor/studio, average rent at the time was 1400 CAD. This is the main reason very few people live on their own and you will sometimes even find couples sharing apartment with other couples. You can find cheaper apartments if you move further away from downtown. However, if you have to take transit, what you will save in rental fees, you might spend on transit.

As of May 2020, an average unfurnished one bedroom across all of Metro Vancouver would be at a minimum of 1800 CAD.

Transit

A transit card is inevitable if you want to move around Metro Vancouver. If you have a daily commute to work then a monthly pass is a must have. The transit covered area is divided into three zones. If you spend most your time within the same area, as in your home and work are all within the same zone, getting a one zone monthly pass is enough and you can pay the extra when heading to another zone. If your work is in another zone, then you will need a 2-zone card, otherwise every time you tap, you will spend an extra 3$. As of July 2020 (when this post is being written), the costs of the monthly transit pass are 98 CAD/month, 131 CAD/month and 177 for a one-zone, two-zone and three-zone monthly pass respectively.

Hydro bills

Here’s where things become a little more variable depending on your deal with your landlord as sometimes utilities would be included in the rent as well as what appliances you have. Hydro BC bills are sent for payment once every two months. Ever since we moved to Vancouver, our bill has not gone over 35 CAD every two months. We don’t however have a dishwasher or en suite washing machine and dryer and so cannot consider this to be the average. The newer the condo, the higher the bill due to additional amenities and single detached homes could have a bill that goes up to 100 CAD a month. However, as we are counting the minimum needed, 45 CAD every two months for utilities would be a reasonable number to start with.

Phone and Internet

Having a phone number and internet access is one of the first things to be done once moving to a new country. Having a local phone number can boost your chances at getting a job and having an internet connection will make job hunting easier! There will be a variety of phone plans, with or without a two year contract and the same thing for your home internet. One thing’s for sure though, plans are ridiculously expensive compared to the rest of the world.

Our current phone plan totals 50.4 CAD per person, which is the cheapest as it’s a BYOB (bring your own phone) and with 5GB of data. With two of us, it adds up to 100 CAD.

Where it comes to our home internet however, we realized we could have found much cheaper plans but they would not be as stable as what we have. At the moment, we are paying 100.8 CAD a month for 500 GB for up to 75 Mbps. Going for a smaller package of a third of the speed is only a 10 CAD difference which doesn’t make it worth the downgrade.

Food and Groceries

Here’s the amount that no two people will agree on, the cost of purchasing groceries and eating. Vancouver offers a variety of supermarket chains and grocers but also farmer’s market and a lot of organic stores as people try to eat healthier. Depending on where you shop, how often you order in or eat out versus cook, the groceries bill might vary greatly. Being from a budgeting household, we are very careful when it comes to keeping track of our spending and what goes where. In an average month on our household of two, we can spend close to 500 CAD on groceries and only order once a week for a delivery budget of 200 CAD. However, if one really wants to budget shop, that grocery amount can be squeezed to 400 CAD.

What’s the total?

There are a lot of things that add up to one’s budget, such as your Netflix subscription, tenant insurance, gym and so on, however the five categories above would count as the essential ones that cannot be given up on. The numbers were based on our household of two but can be easily extrapolated to have an idea of what your family could spend and how much money you would need.

Now the above numbers could give you a good starting point as to what to expect for the bare minimum. As mentioned, this excludes any additional luxury such as going out, buying liquor or getting cable or home entertainment.

A 2100 monthly income will add up to a yearly salary of 30 000 CAD a year after tax or approximately a 15$/hour job for around 40 hours a week. For a couple, this adds up to a total yearly household income of 45 000 CAD a year. However, as discussed before, that income works with extremely conservative expenses. If you work in a different zone, you’ll have to upgrade your monthly pass. If you would like to go to the movies once a month, that’s an additional 15 CAD, get a Netflix account for another 10 CAD. Go out for dinner and one drink? It can easily add up to 30 or 40 CAD and that’s without tips, liquor tax and sales tax. That also excludes buying clothes, taking an Uber as transit is only up to a certain hour and so on. This is why a monthly income of 45 000 CAD for one person would be enough to have some breathing space besides the already costly monthly basic expenses.

To give an idea of where that can fall, minimum wage in Vancouver is 13.85$ which would amount to an income lower than what is needed for bare essentials. The living wage for Metro Vancouver in 2019 was calculated at 19.50$. It was calculated as the amount needed for a family of four with both parents making that income. It works however due to the various child benefits program provided by the government for support.

One of the ways people can survive on minimum wage jobs is by sharing apartments. There will often be a lot of advertisement to rent rooms in houses rather than the whole suite. Living with a flatmate can be a hit and miss as you never know what the other person is like but it can help dramatically reduce the rent fees. Buying secondhand furniture and clothes is also a great way to cut down on costs especially when you first move in. Facebook marketplace, Craigslist and Kijiji are good places to find all the above for less than if bought brand new. Sometimes, one can even find catches as items are listed for free.

Metro Vancouver is one of the most expensive places to live in the world and there’s a possibility that one would have to make sacrifices when it comes to housing, clothes and going out to be able to get started until a more steady and higher income comes along. This is also one of the reasons a lot of artists end up leaving town or students rent houses with several rooms to shared the costs. It is therefore good to know what to expect expenses wise when moving, otherwise you may easily lose all your savings within the first few months of moving as it can often take up to six months on average to find a job!