Cost of employment: How much does it cost you as an employee to do your job
So you’ve just landed a new job to further your career, keep you from boredom, but most importantly earn you a living – you know, money, to pay the bills, the mortgage or rent, put food on the table, etc. Some will argue that the career path is more important, or just getting out of the house is more important, and for some this may be true. They may not have great financial concerns, so just getting out of the house or chasing their ideal career is more important. For most however, it is literally the folding stuff that counts.
The problem: in this day and age, many jobs in the middle income and higher income brackets are now advertised as negotiable when it comes to the potential income, or worse, no wage is mentioned at all. In other words, you’ll have to submit a resume along with your cover letter, hope to get an interview, then get into the final rounds of interviews, before you can even start to pop the question of how much you will be remunerated, should you succeed in obtaining employment. I’ve even spoken to a colleague recently who was successful at obtaining a new employment opportunity, but HR were unable to advise him of what he would be earning until his first pay cheque would be processed. I advised him NOT to commence employment without a wage negotiation completed and in writing. He had to bypass HR and go to the CEO to negotiate a wage. Terrible! The biggest issue in Australia lately when it comes to negotiating a wage, is that, people simply don’t know how to properly negotiate, don’t know what the position is actually worth, or sometimes are afraid of trying to negotiate a higher wage in fear of being rejected or worse, asked to find work elsewhere!
Then, sometimes, there are costs associated to actually turning up to work each day or costs in performing your duties – and I don’t mean your travel to work and travel back home from work costs – these are expected of us. I mean the other costs, such as your personal mobile phone, or an employee-paid-for computing device or other tools of the trade. Yes, sure, we can claim some of these costs back at tax time, but it really is only a small percentage that we can claim back. Every expense that we can offset at tax time helps, but what if we didn’t have these expenses to begin with? What if the computer or toolkit were company provided? If we had no reason to purchase our own, then we are financially better off. Let’s just say you land that new job opportunity, and they ‘require’ all staff to supply their own mobile phone, computer, car, and stationary. Great! Now what happens, when for some reason you can’t pay the mobile bill, or the computer breaks and requires repair or replacement. That cost and responsibility is solely on you to deal with. What happens if you cannot afford the repairs or replacement costs at the time and maybe for another few months? Will they then claim that as you cannot perform your duties as required by your contract of employment therefore we must terminate your employment with us!!? Employers are seldom concerned with the details of employee’s day to day personal matters & personal life issues (and finances) that may be preventing them from for-filling their work obligations – these are considered excuses and employees should always make every effort to ensure their equipment is in good service & working order, and have funds set aside should repair or replacement be required.
While employers need to become far more flexible in this age, employers aren’t all to blame for this, employees (or employees-to-be) are also at fault here for not necessarily being brave enough when it comes to negotiations or working out a fair agreement on what employees are obligated to supply out of their own pocket. All employees are generally expect to be contactable at any time, so having a mobile phone in this day and age is pretty critical, but being expected to purchase a $10,000 3D Cad-capable workstation class computer for use in the office might be a bit reaching in my opinion. If you are required to make regular work related phone calls (especially to clients, colleagues, suppliers, prospects, etc) then ideally the employer should be providing a work mobile phone at the sole cost of the employer or contributing additionally to your account if you are using your phone.
Under my current employment, I have a company provided car, which I have recently been reminded is a “privilege and not a right”, so I am expected to pay for all fuel and cleaning costs – despite that more than two thirds of my travel is to (and from) client sites, and not just between home. and the office. I am also expected to supply my own smart phone, pay my own bill, and have work emails on it. I am not reimbursed by my employer for any of these costs – and I am not allowed to mention my own business name in my voicemail greeting – despite that my phone is tied to my other business. I was briefly provided a work laptop computer but it was provided as a drop in replacement for a workstation – which for the most part was up to the task of day to day duties, the laptop however was not. It’s battery life was no more than 1.5 hours from a full charge, and just didn’t contain the computing power to perform my day to day duties. I did suggest a certain model before hand and even agreed to pay 50% of the purchase cost, with the vision of eventually purchasing it outright within 3 years – making it mine in time to be ready to be ready for replacement (under a similar scheme). This idea was immediately knocked back! I have since returned the work laptop computer (due to the lack of suitability & reliability), leased a far more suitable laptop and now claim it on my tax. Although the tax doesn’t give much of the cost back, it does help a little. This is all due to my poor negotiation skills at the time and also a very difficult to deal with former operations manager. Our employer at least eventually purchased work tools for all techs to use in the field, but this was only 3-4 years ago – I have been employed for 7 years already. Progress is slow, but there’s light at the end of the very long tunnel. This is by no means a complaint – its a small business in the IT industry which has ridiculously high overheads and slow growth – I get it!
So what am I trying to say here? Well, after looking back on my last few jobs, I have learned a few things that in hindsight I wish I knew to implement (then):
- ALWAYS negotiate a higher wage than what was first put forward to you (where wages are negotiated). If an employer is set to negotiate the wage, this usually means there’s room to move. If they truly value what they see in front of them (you), then they are willing to go higher to keep you. (Not for profits obviously might not fit this category).
- Work out a pay increase schedule or plan – how often do pay rises occur and what’s the formal process for this? Annually is usually acceptable. Most employers will review staff annually and negotiate pay rises. Others will either not review unless (in their minds) there’s a reason to, OR, some will review every three months but it almost always leads to no rises. Never take a pay cut! – I have done this once, never again – you’re expected to work harder for less and its just not right.
- If requested to supply your own computer or tools, try to renegotiate in such a way that the employer actually supplies most of the appropriate equipment. This way you aren’t lumped with the risk on your hands, and if the equipment supplied isn’t suitable, then the employer needs to rectify this – not you. This is especially the case with computers as you may venture down to the local department store and buy a cheap PC, only to find its not suitable or compatible with the corporate network, or line of business applications won’t work – and you’re stuck with it! Sole trader sub-contractors should probably have their own gear however.
- If your employer requires you to supply and use your personal mobile phone for day to day work duties – refuse! This is a cost of doing business that you will end up paying for and being ripped off over – not to mention, as soon as you agree to setup your work email on your device, they can remote lock, remote wipe, and deploy device policies against your will or agreement on to your mobile device (this applies to any form of Exchange email account or MDM policy). Your mobile number is your’s to use for personal reasons, and you should have the right to ‘switch off’ when not on a shift or on call. Then at the end of it all, when you move on, you’ll be taking your number with you – and all the continuous calls which will keep coming through from clients after you leave if they had your number. Nothing worse than leaving an organisation and either having your personal mobile device remote locked or remote wiped, or constant bombardment of calls you no longer want nor need to deal with.
- Always keep work-related expenses receipts for tax time. Find the best way that works for you to storing all taxable receipts securely. Scan or photograph them digitally, but keep the hard copies for at least five years. Thermal receipts should also be photocopied then stored in a cool dry place. The last thing anyone needs is a tax audit and no receipts. Speak to your accountant. If you don’t have one, use Facebook to find reputable local accountants and speak to each to see how they fit your needs and budget.
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