Wallstreet
So all in all
Total annual NET income: 604.852-66.486 = 538.366
Total montly NET income: 44.863
No it isn’t. You have included the “Annual Discretionary Bonus” then quoted the tax on no “Annual discretionary Bonus” being paid. Also there is absolutely no guarantee that it will be paid and you certainly can’t plan your monthly budget on it.
($604,852 – $35,170(ADB) – $66486(TAX)) ÷ 12 = $41933 NET
If we take average tax per year, not just year one then:
Total costs per month according to you: 31.320
I didn’t say that at all. That is the minimum percentage you will have to budget for tax in your first year if the Annual Discretionary Bonus isn’t paid.
The point I am trying to make is that you will get a substantial tax bill in your first year. It is absolutely pointless averaging it out over a number of years because the HKIRD are going to want their money in that first year and you have to budget for it accordingly, i.e. up to 34.3% of your salary. In subsequent years, excluding when you are budgeting to pay the tax on the forgivable loan, you can budget for tax at about 17% per year.
I still think those expenses Can be cut
You want to tell me how you will cut those expenses by anything meaningful? Have you ever lived in Hong Kong? Have you asked any recent cadets, i.e. those that have started in Hong Kong since the beginning of the year, how much they are paying for rent? I have flown with a few now and all of them are paying between 12 – 15000 per month in rent. They looked at the cheaper places you have seen on the internet and all of them were “QUOTE”, “substandard”. Rents have also gone up about 21% in the last 18 months. Most cadets are now worried that when their leases come up for renewal in 24 months they will be forced to move into this substandard accommodation because they won’t be able to afford the new lease.
but even with this expenditure you would have about 15.000HKD left per Month.
I think you should check your maths. I work out the surplus in your first year as HK$4563 per month.
41933 – 37370 = 4563
And if you are upgraded in 4 years you would earn 40.000 more, that would leave you with about 50.000 per month, and this will only become more.
You have made the assumption that you will upgrade in 4 years. Upgrades have only increased in the last 18 years that SO’s have been employed and this has been during some of the largest expansion periods in the airlines history. 4 years may be the current upgrade timing but with the airline likely to employ DEFO’s in the not too distant future, watch that upgrade time increase to between 6 – 8 years. By the way the upgrade is from SO to JFO not FO. The HKPA remains the same as SO when you are a JFO and the pay rise I can assure you isn’t HK$40,000.00.
Honk Kong is expensive, I agree. But you won't have an huge dept for your training !
Yes you will. The HKIRD will be taxing you once the forgivable loan is forgiven. That equates to a HK$187000 + $187000 (provisional tax) = HK$374000 tax bill on top of your normal tax in your 6th year. You could easily have a total tax bill in your 6th year that is in the order of HK$500,000+ but your gross salary could be as little as HK$710,000. This leaves you with a net salary of about HK$210,000 or HK$17,500 per month. How are you going to survive when in today’s dollars your expenses excluding taxes are HK$25,270?