Author Topic: Question about my Salary..  (Read 4091 times)

cbr shadow

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Question about my Salary..
« on: July 26, 2015, 04:42:24 PM »
I've worked for 5 years for my company in Chicago. Last year my wife was offered a (2) year contract through her company for a position in Melbourne Australia, which we took. My company arranged for me to work remotely from my house in Melbourne.

My company has to follow Australian employment laws while I'm working here, which helped me in a couple ways (4 weeks vacation rather than 2) but the way my salary was calculated puts me at a disadvantage because since I've gotten here the US dollar has taken off.

To figure out my salary my company took my US salary and converted it from USD to AUD, then wrote the contract based on that AUD amount. Since then the USD has gone up in value compared to the AUD, but my paychecks have stayed the same (same AUD amount deposited in my account). This means that as the USD goes up in value my company is paying less and less for me per paycheck. In the last 1 year this change has lowered my salary by ~$14,000

I have my annual performance review coming up in 2 months. I expect to get a very small raise in pay (probably 3-5%) but I also want the company to "recast" the conversion to be current with today's USD/AUD value. Is this appropriate? Would it be appropriate to ask them to update my pay more often than that 1 time per year?

My original employment contract gives a AUD dollar amount, which I signed. So I do understand that I signed that amount and that they dont "owe" me anything other than that.. However it does still seem reasonable to have that number updated based on current rates.

Thanks for any input.

Edit: For clarification, my employment contract isn't for any set amount of time, but is open-ended.  Meaning I didn't agree to "2 years at ($) pay".
« Last Edit: July 26, 2015, 05:26:40 PM by cbr shadow »

forummm

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Re: Question about my Salary..
« Reply #1 on: July 26, 2015, 05:36:26 PM »
I would definitely ask to have it recast to be consistent with your agreed on USD value of salary plus the raise, and then convert it into AUD. What can it hurt? They are presumably earning in dollars and only paying in AUD for your benefit, so it makes them less subject to currency risks to pay you in USD.

Davids

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Re: Question about my Salary..
« Reply #2 on: July 26, 2015, 05:57:05 PM »
If you end up getting a 5% merit based pay raise that is not small by most standards since most companies typically do 2-3% at best for merit base pay raises.

With that said absolutely ask to have your USD salary recast to the current AUD conversion rates.

marty998

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Re: Question about my Salary..
« Reply #3 on: July 27, 2015, 02:09:18 AM »
There's transfer pricing implications for the company (are they running the enterprise in Australia as a branch of head office or as an established legal entity).

I would hate to think we have another US multinational claiming a bunch of expenses here (such as your salary) and transfer pricing revenue out of the country.

You could have it reset but it will cost your employer more in payroll tax & workers comp. You'll also lose a chunk to tax as well. I'm assuming the $14,000 you quoted is gross not net? How much are you really down? (Not sure if it even possible to work it out on a like-for-like basis after tax)

Here's a thought....if the currency had gone the other way what you have given the extra back? What happens if they give you the money then the A$ starts going back up? (unlikely as it is to happen with most pundits predicting the $A to go to $0.65)

JLR

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Re: Question about my Salary..
« Reply #4 on: July 27, 2015, 02:20:19 AM »
A tricky situation.
It seems reasonable to ask for your pay to be recalculated, but they will probably want it to cut both ways - if the dollar goes the other way you could find yourself with less.
Really, I think they should pay you each pay period for your US pay converted to $AU. That way the amount for the company remains the same and you wear the cost of the choice to live in Australia.

ShoulderThingThatGoesUp

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Re: Question about my Salary..
« Reply #5 on: July 27, 2015, 10:41:01 AM »
Has the cost of living in Australia gone up in AUD terms with the currency fall?

waffle

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Re: Question about my Salary..
« Reply #6 on: July 27, 2015, 10:57:17 AM »
Is there a legal reason that they are paying you in AUD? If not I'd just ask to be paid in USD and only convert what you need to live off of. If you plan to return to the states later then you wont have the reconversion hassle. Maybe you can live completely off your wife's pay and not have to do any conversion at all.

RyanAtTanagra

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Re: Question about my Salary..
« Reply #7 on: July 27, 2015, 01:10:55 PM »
I would definitely ask for it to be adjusted at least yearly to the appropriate USD rate, not just because you're missing out on money, but because if you eventually move back to the US, you're going to be at a salary disadvantage.

beltim

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Re: Question about my Salary..
« Reply #8 on: July 27, 2015, 01:20:14 PM »
Here's a thought....if the currency had gone the other way what you have given the extra back? What happens if they give you the money then the A$ starts going back up? (unlikely as it is to happen with most pundits predicting the $A to go to $0.65)

That's not an analogous situation.  The OP isn't asking for the difference received over the previous year, he's asking for an updated exchange rate for the upcoming year.  This seems entirely reasonable to me, and yes, if the exchange rate changes after another year negatively for the OP, it would be fair to use the then-current exchange rate as well.

I would also think it fair to just use the then-current exchange rate every month when he gets paid, or if he just got paid in USD and had to do the conversion himself.

chasesfish

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Re: Question about my Salary..
« Reply #9 on: July 27, 2015, 07:07:42 PM »
It also depends on what other employment options are and how important the work from home arrangement is.

I'd say renegotiate the contract and see what you can get.