Is 100k salary good in Toronto?

Toronto is one of the best places you can live in Canada – a city with a high standard of living, economic opportunities, a safe environment, and lots more. But it’s also one of the most expensive places to live in the country, with only Vancouver being more expensive among Canadian metropolitan areas.

If you’re planning to move here, you’ll want to know how much you need to survive. So, is a 100k salary good in Toronto?

A family of 4 and a single person in Toronto needs around $95,000 and $39,072 to live comfortably. Thus, a 100k salary is pretty good in the city. But it’ll still depend on some factors such as whether it’s before or after-tax, a single person or family, and where you choose to live in the city.

While the cost of living in Toronto is high, it’s worth it due to the high standard of living and the high average salary. But it’s important to be earning well enough if you’re planning to live in the city.

Here, we discuss whether a 100k salary is good in Toronto and the cost of living so you’ll know how much you should be targeting as annual earnings when planning to move to the Six.

Factors Determining whether 100k is Sufficient in Toronto

While a 100k salary seems like a pretty great one anywhere in Canada, there are some factors you have to consider when you’re living in Toronto.

1.      Before or After Tax

As a net pay, 100k is a good salary as this is enough to cover the basic expenses. But if it’s before tax, then it might not be sufficient. The tax rate on a $100k salary in Ontario is 11.6% for provincial tax and 26% for federal tax.

The average tax rate for residents of Ontario earning $100k is 30%, while the marginal tax rate is 43.2%. Based on these rates, the take-home pay on 100k salary will be around $70,000.

While this amount might sustain a single person living in Toronto, it’s unlikely to be enough for a family of 4. Thus, it makes a lot of difference to know whether the salary is before or after tax. 

2.      Family

Another factor that could determine whether 100k is a good salary is living alone or having a family. Generally, having a family here means you’ll be spending almost quadruple of what you’ll need a single person.

According to Numbeo, the average cost of living for a single person in Toronto is $1,227, while a family of 4 will need $4,453.69. Based on these estimates, a single person will need to earn $14,724, and a family of 4 will need $53,444.28.

This doesn’t include rent which can vary from one part of the city to another. Thus, a single person can comfortably live on a $100k annually no matter where they live in the city. But a family of 4 might need to be more particular about where they choose to live in the city.

Extra costs such as a bigger apartment and money spent on childcare make it costly for a family to live in Toronto.

3.      Choice of Location

Most Torontonians spend the highest percentage of their income on housing, and this applies regardless of whether you’re buying or renting. The average cost of homes in Toronto as of January 2022 is only a few thousand below one million.

As of the third quarter of 2021, the average monthly mortgage payment was $1,911. Since then, the price of homes in Toronto has increased, which means mortgage payments now are likely over $2,000. This average payment is for a 25-year mortgage which means it’ll be much higher if your mortgage is shorter.

Rents in the city are equally expensive no matter where you choose to live. The average rent in Toronto for a single-bedroom apartment is $1,741, while the central areas cost $2,029.

This amounts to either $20,964 or $24,348 on average. For families who’ll rent apartments, a three-bedroom apartment in the city center costs $3,491, and suburbs cost $2,818. Annually, this means families spend between $41,892 and $33,818 on accommodation.

Since these are only average costs, you can expect to find cheaper and more expensive options in the city. But the part of Toronto you decide to live in can have a lot of effect on whether a $100k salary will be good enough to sustain you in the city.

Livable Wage in Toronto

Ontario has one of the highest minimum wages in the country, but that’s still not enough to meet up with its livable wage.

According to the Ontario Living Wage Network, residents in Toronto need to be earning at least $22.08 per hour to afford the basic lifestyle. However, the current minimum wage in Ontario is $15 per hour. Thus, those earning minimum wage in Toronto will find it difficult to live sustainably in the city.

Average Salary in Toronto

There are different data on the average salary in Toronto. According to Salary Explorer, the average salary in Toronto is $134,000.

This includes benefits such as housing, transport, and other benefits. Of course, there are significant wage disparities, with the lowest average wage being $33,900 and the highest average being $599,000. However, PayScale states that the average base salary in Toronto is $67,000. This doesn’t include other attached benefits and bonuses.

Is Living in Toronto Worth It

Given the obvious high cost of living in Toronto, you may wonder if it’s worth it to stay in the city while there are cheaper options around.

The answer is yes. Toronto is one of the most livable cities globally, and if you need a place where you can earn a high income, it’s one of your best options. The standard of living here is very high, and citizens have access to some of the best facilities and services in the world.

Transportation, entertainment, healthcare, sports, and more are great here. Despite being a metropolitan city with almost 3 million residents, it still has one of Canada’s most beautiful natural spaces, with over a thousand parks within the city.

In Conclusion

Many factors come into play when determining whether 100k is a good salary in Toronto. Due to how expensive the city is, it’s unlikely to be enough for a family of 4. Even if it’s enough, there might not be anything left for savings. However, a single person living in Toronto can sufficiently survive on a $100k salary and still have enough left for savings.

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