I've received some comments recently noting some calculation misses and factors to calculator. I will be updating the graph and incorporating "basic exemptions" and "Employment insurance" taxes. The graph will be updated over the next few days.
As of current, the the previous graph posted does have some errors in the Japanese tax rates as I misinterpreted the lump sum numbers in each tax brackets. So take it as a grain of salt for the time being.
Saturday, February 24, 2007
Thursday, February 22, 2007
Salaries and Taxes in Japan vs Canada
Right now, I am in the midst of trying to determine which country I intend on working in. My current plans as of the moment are to work in Japan for a few years. The salaries between Japan and Canada seem to be rather different.
Engineering Salaries in Japan
The starting pay for an Engineering graduate (Masters) is approximately $2,200 / month. Japanese companies pay out salary bonuses twice a year valued at 1 ~ 3 months worth of pay. Assuming that I get 5 months worth of bonuses, the total works out to about $37,400 yearly. In addition, Japanese companies usually provide dormitory housing for their engineering employees at a very cheap rate, somewhere in the ball park of $150/month. Depending on the region, rent can cost in the ball park of $500 to $700. Let's assume I save $400/month in rent leading to $4,800 in savings. The starting benefits a starting engineering person receives is in the ball-park of $40,000/year.
According to the numbers I have found on the net at www.payscale.com, Electrical Engineers with 1~4 years of experience make $56,000/year. There is a $16,000 discrepancy between starting Japanese salaries and Canadian salaries.
The discrepancy comes from the attitudes of Japanese companies that recent graduates need to be retrained to be able to work for the company. They don't assume you have any skill and will proceed to train you for approximately a year. I am not particularly happy with that kind of mind set, so it will be in my best interest to find a company that operates on the concept of a meritocracy (people are paid increasingly with skill or productivity). I have heard that foreign companies are best for this kind of mindset.
I would like to stick around Japan for a few years and eventually reposition myself back into Canada or a westernized country for the long term. The asian work ethic of just working perpetually hard does not seem appealing to me (especially with poor incentives). However, I do value the international experience and my ability to live in a different country. Perhaps for external reasons, one day we might find ourselves required to relocate to different parts of the world to pursue opportunities in different countries that offer them.
Taxation in Japan and Canada
I've spent the morning comparing taxation rates between Canada and Japan. Unfortunately there is little published information online except for the raw marginal tax rates offered in both countries. I have decided to run calculations to determine the percentage of money a person pays depending on yearly income.
The calculations for Canadian taxes was based on information provided by a government of Canada website located here and is current for 2007. The Japanese marginal tax rate information was calculated from here and is also current for 2007.
2 calculations were performed, one calculation accounting only for income taxes and a second calculation including sales tax. It is important to note that Japanese sales tax is 5% and Canadian sales tax in BC is 14%, meaning that sales tax does have a significant effect on the purchasing power of money. The calculations were performed in Excel and the the following graph below was produced (click on the image for a larger view).
Graph of percent income paid as tax as a function of income and also the adjusted amount of tax paid accounting for sales taxes.
Without accounting for sales taxes, it is quite obvious that Canadian taxes are lower then that of Japanese taxes. The Japanese system taxes people at 33% to 40% in the upper tax brackets of above $90k and $180k respectively. In addition to these taxes, when you get into the higher tax brackets, you are also charged a flat lump sum fee dependent on the tax bracket which accounts for the "steps" seen in the Japanese tax graphs. It is also quite evident that Japanese people pay more taxes when in tax brackets above the $80,000 mark.
When the purchasing power of money is accounted for after the addition of sales taxes for both countries, the tax rates in Japan is cheaper compared to Canada when earnings are below $60,000, above that, the Japanese tax system becomes more expensive. In the range between $40,000 to $60,000 the difference in taxation between the 2 systems is negligible. Unfortunately, this data doesn't tell the whole story.
In the Canadian system, (if you make more than $30,000) you have more cash on hand before being hit with the sales tax, this is advantageous if you plan to move money out of a country because the money isn't heavily taxed unless you spend it in the country. In the Japanese system, you are more heavily taxed on your income leaving resulting in less cash on hand.
The conclusion to this analysis is that if you're an Engineer, you're probably better off financially in Canada.
Engineering Salaries in Japan
The starting pay for an Engineering graduate (Masters) is approximately $2,200 / month. Japanese companies pay out salary bonuses twice a year valued at 1 ~ 3 months worth of pay. Assuming that I get 5 months worth of bonuses, the total works out to about $37,400 yearly. In addition, Japanese companies usually provide dormitory housing for their engineering employees at a very cheap rate, somewhere in the ball park of $150/month. Depending on the region, rent can cost in the ball park of $500 to $700. Let's assume I save $400/month in rent leading to $4,800 in savings. The starting benefits a starting engineering person receives is in the ball-park of $40,000/year.
According to the numbers I have found on the net at www.payscale.com, Electrical Engineers with 1~4 years of experience make $56,000/year. There is a $16,000 discrepancy between starting Japanese salaries and Canadian salaries.
The discrepancy comes from the attitudes of Japanese companies that recent graduates need to be retrained to be able to work for the company. They don't assume you have any skill and will proceed to train you for approximately a year. I am not particularly happy with that kind of mind set, so it will be in my best interest to find a company that operates on the concept of a meritocracy (people are paid increasingly with skill or productivity). I have heard that foreign companies are best for this kind of mindset.
I would like to stick around Japan for a few years and eventually reposition myself back into Canada or a westernized country for the long term. The asian work ethic of just working perpetually hard does not seem appealing to me (especially with poor incentives). However, I do value the international experience and my ability to live in a different country. Perhaps for external reasons, one day we might find ourselves required to relocate to different parts of the world to pursue opportunities in different countries that offer them.
Taxation in Japan and Canada
I've spent the morning comparing taxation rates between Canada and Japan. Unfortunately there is little published information online except for the raw marginal tax rates offered in both countries. I have decided to run calculations to determine the percentage of money a person pays depending on yearly income.
The calculations for Canadian taxes was based on information provided by a government of Canada website located here and is current for 2007. The Japanese marginal tax rate information was calculated from here and is also current for 2007.
2 calculations were performed, one calculation accounting only for income taxes and a second calculation including sales tax. It is important to note that Japanese sales tax is 5% and Canadian sales tax in BC is 14%, meaning that sales tax does have a significant effect on the purchasing power of money. The calculations were performed in Excel and the the following graph below was produced (click on the image for a larger view).
Graph of percent income paid as tax as a function of income and also the adjusted amount of tax paid accounting for sales taxes.
Without accounting for sales taxes, it is quite obvious that Canadian taxes are lower then that of Japanese taxes. The Japanese system taxes people at 33% to 40% in the upper tax brackets of above $90k and $180k respectively. In addition to these taxes, when you get into the higher tax brackets, you are also charged a flat lump sum fee dependent on the tax bracket which accounts for the "steps" seen in the Japanese tax graphs. It is also quite evident that Japanese people pay more taxes when in tax brackets above the $80,000 mark.
When the purchasing power of money is accounted for after the addition of sales taxes for both countries, the tax rates in Japan is cheaper compared to Canada when earnings are below $60,000, above that, the Japanese tax system becomes more expensive. In the range between $40,000 to $60,000 the difference in taxation between the 2 systems is negligible. Unfortunately, this data doesn't tell the whole story.
In the Canadian system, (if you make more than $30,000) you have more cash on hand before being hit with the sales tax, this is advantageous if you plan to move money out of a country because the money isn't heavily taxed unless you spend it in the country. In the Japanese system, you are more heavily taxed on your income leaving resulting in less cash on hand.
The conclusion to this analysis is that if you're an Engineer, you're probably better off financially in Canada.
Wednesday, February 21, 2007
Exchange Rate Robbery at the Airport
Doing a little accounting from European trip. I just double checked the exchange rate of the yen to the Euro online and compared it to the price I paid at the airport. The results are rather startling.
The online rates as posted at www.xe.com as of this posting is 158 yen / Euro. The rate I got at the airport was 175 yen / Euro. The difference means that I paid an extra 17 yen per Euro at the airport (10% of my cash). To add insult to injury, they also charged a commission of an additional 17.11 Euros.
WHAT!? They give me a shitty rate and then charge me for their effort? What a rip-off. With the additional charge, the exchange rate goes up to 184 yen / Euro. They ripped a whole 16% off me (I exchanged about $600, meaning they stole about $100)!
This is the first time I really double checked the exchange rate so this might be not indicative of all airports, but this experience will keep me on my toes. Generally, I've been told that you usually get the best rates when exchanging money in the host country of the currency. This might be true, so long as it isn't at the airport or a hotel.
The online rates as posted at www.xe.com as of this posting is 158 yen / Euro. The rate I got at the airport was 175 yen / Euro. The difference means that I paid an extra 17 yen per Euro at the airport (10% of my cash). To add insult to injury, they also charged a commission of an additional 17.11 Euros.
WHAT!? They give me a shitty rate and then charge me for their effort? What a rip-off. With the additional charge, the exchange rate goes up to 184 yen / Euro. They ripped a whole 16% off me (I exchanged about $600, meaning they stole about $100)!
This is the first time I really double checked the exchange rate so this might be not indicative of all airports, but this experience will keep me on my toes. Generally, I've been told that you usually get the best rates when exchanging money in the host country of the currency. This might be true, so long as it isn't at the airport or a hotel.
Monday, February 19, 2007
A few shots of France
Still in France at the moment. I'll be coming back to Japan tomorrow. I've been pretty busy attending all sorts of meetings and presentations. I am still busy at the moment so I can't talk much but I will present a few pictures.
A haphazard shot of me in Lyon.
The Eiffel Tower really doesn't look that big ~
Enjoy the pics. More after I get back to Japan. I leave tomorrow!
A haphazard shot of me in Lyon.
The Eiffel Tower really doesn't look that big ~
Enjoy the pics. More after I get back to Japan. I leave tomorrow!
Tuesday, February 13, 2007
Bon Voyage!
As of tomorrow, I'll be flying over Russia, into Germany and transfering into France. I still haven7t packed and I've come down with a cold. It's almost 6:40 pm, I need to teach English at 7:00, attend a b-day party at 8:30 and then attend a gathering with the masters students.... and then I can start packing.
It's going to be crazy. My next post, hopefully, will be from the Europe!
It's going to be crazy. My next post, hopefully, will be from the Europe!
Friday, February 09, 2007
The US has lost the War on Terror
Do you know exactly what year 9/11 happened? Probably you could, but 30% of Americans years on after that event don't remember. Years after Bush had once acclaimed "Mission Accomplished" upon the deck of an aircraft carrier, the fighting in Iraq still continues. Iraqi civilian deaths at the minimum is said to be at about 56,000 as of this posting. Did you know that? Did you even hear about it on the news? Likely not, because it seems that the majority of Americans are either ignorant or simply don't care because this information hardly appears in the news. The numbers that they do care is the 2,973 people perished during the aftermath of 9/11 and since the US invaded Iraq and the over 3,000 that have died in active duty.
To date, the US has already spent over $360 billion dollars funding this war and spends approximately $200 million/day to fund operations in Iraq with costs projected to reach at least $1 trillion. The US dollar has depreciated incredibly as results of this and already, nations around the world are considering diversifying their bank holdings to reduce the effects of devaluation of the US dollar (which in turn, also causes more devaluation). The Euro, as a result, has increased in value significantly.
What started all this? 2 planes flew into the World Trade Center towers demolishing those buildings completely. The world gave sympathy and support to the Americans immediately in an attempt to bring down the Taliban regime in Afghanistan. Then next came Iraq, whose connection to 9/11 is vague to non-existent at best. Yet they went anyways, against the will of the UN while thumbing their noses at everyone that didn't join; telling them that they would not get lucrative construction contracts during the reconstruction of Iraq. It seems to me that the joke's on the Americans because they can't stabilize Iraq, nor can they do any reconstruction. The world must be laughing at them. The US went alone and they are going to pay the price for it, very alone.
To what benefit did the US wage their "War on Terror?" I can't think of any thing positive. To be honest, it would have been cheaper to let a second 9/11 attack happen and pocket the $360 billion they would have spent and save the 56,000 Iraqi civilians that died during this conflict. If this solution sounds absurd then you've only just begun understanding the absurdity of America's "War on Terror."
Do they Deserve This?
The answer to this question in my mind is a most affirmative "Yes, they do." The US is a democracy is it not? They elected the likes of Bush and Cheney into the White House, for a second term even after their "War on Terror" had begun. It would be not until 4 years later that people would finally realize that this was a mistake, where by Bush's approval rating would drop to less than 30%. More than half of the nation thinks that Bush is doing a terrible job and just as many think likewise of the war in Iraq.
And yet, somehow, despite the majority of Americans thinking this way, they can't get him to stop or kick him out of office. I sometimes wonder if this is how a democracy is supposed to work; if this is this the same "democracy and freedom" that they are trying to spread to the Middle-East. The American people can't even get a handle on their own government.
A democracy means that you have a say for how your country is run-- your representatives take responsibility for the things they do and in turn, you take responsibility for your representatives. It seems to me that nobody takes any responsibility for anything and as a result, the current state of America is what you get.
But perhaps I am getting ahead of myself here, all this intellectual discourse means nothing if there are too few brains out there understand it. Have you ever seen a video called "Why People Believe Americans are Stupid"? I suggest that you watch it... and then after, realize that these people are eligible to vote.
After writing this, I've come to the realization that a democracy only works if your country isn't stupid. If it is, I can only suggest that you move out.
To date, the US has already spent over $360 billion dollars funding this war and spends approximately $200 million/day to fund operations in Iraq with costs projected to reach at least $1 trillion. The US dollar has depreciated incredibly as results of this and already, nations around the world are considering diversifying their bank holdings to reduce the effects of devaluation of the US dollar (which in turn, also causes more devaluation). The Euro, as a result, has increased in value significantly.
What started all this? 2 planes flew into the World Trade Center towers demolishing those buildings completely. The world gave sympathy and support to the Americans immediately in an attempt to bring down the Taliban regime in Afghanistan. Then next came Iraq, whose connection to 9/11 is vague to non-existent at best. Yet they went anyways, against the will of the UN while thumbing their noses at everyone that didn't join; telling them that they would not get lucrative construction contracts during the reconstruction of Iraq. It seems to me that the joke's on the Americans because they can't stabilize Iraq, nor can they do any reconstruction. The world must be laughing at them. The US went alone and they are going to pay the price for it, very alone.
To what benefit did the US wage their "War on Terror?" I can't think of any thing positive. To be honest, it would have been cheaper to let a second 9/11 attack happen and pocket the $360 billion they would have spent and save the 56,000 Iraqi civilians that died during this conflict. If this solution sounds absurd then you've only just begun understanding the absurdity of America's "War on Terror."
Do they Deserve This?
The answer to this question in my mind is a most affirmative "Yes, they do." The US is a democracy is it not? They elected the likes of Bush and Cheney into the White House, for a second term even after their "War on Terror" had begun. It would be not until 4 years later that people would finally realize that this was a mistake, where by Bush's approval rating would drop to less than 30%. More than half of the nation thinks that Bush is doing a terrible job and just as many think likewise of the war in Iraq.
And yet, somehow, despite the majority of Americans thinking this way, they can't get him to stop or kick him out of office. I sometimes wonder if this is how a democracy is supposed to work; if this is this the same "democracy and freedom" that they are trying to spread to the Middle-East. The American people can't even get a handle on their own government.
A democracy means that you have a say for how your country is run-- your representatives take responsibility for the things they do and in turn, you take responsibility for your representatives. It seems to me that nobody takes any responsibility for anything and as a result, the current state of America is what you get.
But perhaps I am getting ahead of myself here, all this intellectual discourse means nothing if there are too few brains out there understand it. Have you ever seen a video called "Why People Believe Americans are Stupid"? I suggest that you watch it... and then after, realize that these people are eligible to vote.
After writing this, I've come to the realization that a democracy only works if your country isn't stupid. If it is, I can only suggest that you move out.
Wednesday, February 07, 2007
Indonesian Cooking Class
I attended a cooking last Sunday, which took place at the Sendai International Community center, hosted by a few volunteer students from my University. The week before was Chinese food, this week is Indonesian Cooking. Excellent, because I've never eaten Indonesian food before so I was up for this new experience.
I had such a great time the last time around during the Chinese cooking class that I seriously regretted not brining my camera to take pictures of the event. This time, I was sure to not repeat that mistake!
To the left, is some of the ingredients we used to make a type of Indonesian dessert (the name eludes me at the moment as it was rather hard to pronounce and thus I had no clue how to spell).
On the plate, there are bananas, a Japanese pumpkin, sweet potatoes and some coconut milk that will be going into the mix. In the back, a bowl of brown sugar sits on a tray somewhere that is added at the end.
The completed dessert is depicted below:
Mmm... delicious Indonesian dessert
We definitely had a lot of fun cooking. Most of the people at the event were amateur chefs with no professional training, but just out to learn something new. All of us worked in groups of 2~3 people, taking turns at chopping food, washing dishes and doing the cooking.
Left: Ms. Oota flipping in some Indonesian style Tempura into hot oil
Right: Our cooking teacher for the day explaining a few points on hot peppers
I could of course, write a long post about the cooking class but I'll let the photo album do most of the explaining. Click on the group picture below to view the album.
For 750 yen (about $7.5 CAD), I am absolutely confident that I'm getting the best entertainment mileage for the money I spend. When a movie costs about $12~$15 (+more if you want food) for 1.5 hour of entertainment. I can do the same thing for half the price, learn a new skill, get something to eat and possibly make new friends. I'd be hard pressed to find a sweeter deal!
I had such a great time the last time around during the Chinese cooking class that I seriously regretted not brining my camera to take pictures of the event. This time, I was sure to not repeat that mistake!
To the left, is some of the ingredients we used to make a type of Indonesian dessert (the name eludes me at the moment as it was rather hard to pronounce and thus I had no clue how to spell).On the plate, there are bananas, a Japanese pumpkin, sweet potatoes and some coconut milk that will be going into the mix. In the back, a bowl of brown sugar sits on a tray somewhere that is added at the end.
The completed dessert is depicted below:
Mmm... delicious Indonesian dessert
We definitely had a lot of fun cooking. Most of the people at the event were amateur chefs with no professional training, but just out to learn something new. All of us worked in groups of 2~3 people, taking turns at chopping food, washing dishes and doing the cooking.
Left: Ms. Oota flipping in some Indonesian style Tempura into hot oil
Right: Our cooking teacher for the day explaining a few points on hot peppers
I could of course, write a long post about the cooking class but I'll let the photo album do most of the explaining. Click on the group picture below to view the album.
For 750 yen (about $7.5 CAD), I am absolutely confident that I'm getting the best entertainment mileage for the money I spend. When a movie costs about $12~$15 (+more if you want food) for 1.5 hour of entertainment. I can do the same thing for half the price, learn a new skill, get something to eat and possibly make new friends. I'd be hard pressed to find a sweeter deal!
Monday, February 05, 2007
Head-hunted?
I just got a random phone call from Toyko today. Seems that one of the Semiconductor divisions wants me to attend one of their company presentations happening in Sendai next week. Am I being head hunted? I doubt it because I'm not famous (yet!).
I've registered on a job finding forum in Japan as it is currently job hunting season in Japan to check out my options. My current game plan entails working in Japan for a few years to gain some international experience and then probably making a return move to North America in the future.
The current working culture of Japan is that most people graduating out of universities tend to aim for large corporations for stability. These corporations end up training graduated in trade and in turn providing them with life long employment. This is (was?) the career life of your usual Japanese graduate.
I have already spent 3 weeks at a Japanese corporation known as Sumitomo Bakelite. I've commented about my experiences previously, doing rather boring work for 3 weeks and I have seen what boring work does to people-- it leads to mental decay. Hopefully in my search for a job, I will find an interesting place to work at. Over the next few weeks and months, it will be necessary for me to hash out a general work mind set to accomplish a set of general goals over throughout my working career.
The fundamental premises are:
Rule #1: never get stuck in a dead end job.
Rule #2: observe rule #1.
The long term plan will be to break the work clock-- I don't want to be paid by the hour, I want to be paid for by productivity. This too, I've mentioned previously during my internship post.
I've registered on a job finding forum in Japan as it is currently job hunting season in Japan to check out my options. My current game plan entails working in Japan for a few years to gain some international experience and then probably making a return move to North America in the future.
The current working culture of Japan is that most people graduating out of universities tend to aim for large corporations for stability. These corporations end up training graduated in trade and in turn providing them with life long employment. This is (was?) the career life of your usual Japanese graduate.
I have already spent 3 weeks at a Japanese corporation known as Sumitomo Bakelite. I've commented about my experiences previously, doing rather boring work for 3 weeks and I have seen what boring work does to people-- it leads to mental decay. Hopefully in my search for a job, I will find an interesting place to work at. Over the next few weeks and months, it will be necessary for me to hash out a general work mind set to accomplish a set of general goals over throughout my working career.
The fundamental premises are:
Rule #1: never get stuck in a dead end job.
Rule #2: observe rule #1.
The long term plan will be to break the work clock-- I don't want to be paid by the hour, I want to be paid for by productivity. This too, I've mentioned previously during my internship post.
Sunday, February 04, 2007
Some Friends are Hilarious!
Just got back from the cooking lesson today, pictures will be up soon. I was walking home when I ran into a Chinese friend of mine (very good at English) and we started chatting on the way home and I invited her over to see the new place I was living at since we haven't met in a long while.
There were plenty of good quotables but my favorites for the evening were:
N: So you're going to France?
J: Yeah, I arrive on Valentine's day.
N: Are you going with a girlfriend?
J: I haven't one.
N: Oh that sounds kind of pathetic. Like you're in the most romantic city in the world on the most romantic day of the year, but you're going to be alone.
J: Heh, my sentiments exactly.
N: Did you know that French people smell bad?
J: Why is that?
N: My mom just tells me that because they have to make really good perfume or else without it they kind of stink. That's why they make the best perfume in the world!
J: An interesting hypothesis.
N: (looks into my roomie's room). Is that a snowboard? Does he snowboard?
J: Yeah, he's pretty good!
N: People that snowboard are pretty cool. So he must be pretty cool! Does he have a girlfriend?
J: Yeah, he does.
N: Oh, that doesn't matter?
J: What!?
N: Yeah, because I have a boyfriend.
Obviously the nuances are off in the last paragraph, but I thought that was incredibly funny. I like 'N,' just because she's incredibly blunt.
There were plenty of good quotables but my favorites for the evening were:
N: So you're going to France?
J: Yeah, I arrive on Valentine's day.
N: Are you going with a girlfriend?
J: I haven't one.
N: Oh that sounds kind of pathetic. Like you're in the most romantic city in the world on the most romantic day of the year, but you're going to be alone.
J: Heh, my sentiments exactly.
N: Did you know that French people smell bad?
J: Why is that?
N: My mom just tells me that because they have to make really good perfume or else without it they kind of stink. That's why they make the best perfume in the world!
J: An interesting hypothesis.
N: (looks into my roomie's room). Is that a snowboard? Does he snowboard?
J: Yeah, he's pretty good!
N: People that snowboard are pretty cool. So he must be pretty cool! Does he have a girlfriend?
J: Yeah, he does.
N: Oh, that doesn't matter?
J: What!?
N: Yeah, because I have a boyfriend.
Obviously the nuances are off in the last paragraph, but I thought that was incredibly funny. I like 'N,' just because she's incredibly blunt.
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