Monthly Pay after deductions - Questions [Merged]

[Pusser]

Do yourself a favour and pick/apply for a specialized, at least spec 1, pay trade. After 5 years as a Cpl you will make around $70k which is about $4k month take home after taxes. To reach that amount as an infantry soldier you’ll need 5 years as a Sgt.

NO!  All the money in the world means squat if you're miserable and hate your job.  If occupations with specialist pay interest you, then by all means apply for those and I wish you the best of luck.  However, NEVER choose an occupation simply because of the pay.  You have to enjoy what you're doing.  It's very difficult to do a good job and get promoted doing something that doesn't interest you.

 

[Eye In The Sky]

I agree with Pusser...which is why I included the part below in my AES OP recruiting pitch.

Now, pay isn't the only or (IMO) primary factor in deciding a trade, but at the same time it is something to consider. 

 

[Pusser]

Once you are a Cpl and trained to the Operationally Functional Point (qual'd as aircrew on the Cyclone or Aurora, at this point) you will move to Spec 1 pay category.  To give some perspective on how much of a difference spec pay makes over your career for earning potential AND in retirement for your pension, back when I was a newly qualified Aurora AES Op, as a Corporal, I made more per month than the Sqn Orderly Room Chief Clerk who was a Sgt. 

That also didn't include my aircrew allowance, an additional $327/month starting off.

Not entirely true.  There are several factors, but if one serves a full career, there is a good possibility that your pension will not be any better than that of someone in a standard pay trade.  The difference between standard and specialist pay is biggest at the lower ranks and actually declines as you climb the rank structure, to the point that the top incentive pay for all Chief Warrant Officers is the same, regardless of occupation.  Take the example of two CWOs, one infantry and one AES Op, both of whom have exactly the same number of years of service and who were both at the top pay incentive for CWOs, for at least five years release.  Their pensions will be identical, despite the fact that the AES Op probably paid a lot more in CFSA contributions over the course of his career.  CFSA contributions are a percentage of pay - the higher your pay, the more you pay.  However, pension benefits are based on the average of your best five years of salary.  In the example I've given, all the determining factors are identical (years of service and average of best five years of salary).  So yes, if two sergeants get out after 25 years, the AES Op's pension has a good chance of being better than the infantry sergeants, because the AES Op sergeant's best five year average is likely higher than the infantry sergeant's.  However, the longer you serve and the higher you climb in rank, the lesser that gap becomes.

Aircrew Allowance (or any allowance for that matter) has no effect on pension whatsoever.  All pension benefits are based on pay alone.  Having said that, there is nothing stopping the guy with spec pay investing his extra disposable income in an RRSP or TFSA to generate more income in retirement.

On a similar note, getting promoted faster in your career (i.e. achieving higher pay quicker) will not necessarily increase your pension either.  Let's look at two boatswains:  Both join on the same day and then retire on the same day, 35 years later.  Boatswain 1 (B1) is very bright and energetic.  He rockets to the top and gets promoted to CPO1 in minimum time (14 years).  He spends the last 21 years of his career as a CPO1.  This means he spends 17 years in the top pay incentive category.  Boatswain 2 (B2) progresses at a slower rate and it takes him 26 years to make it to CPO1 (almost twice as long as B1).  Because B1 was drawing a larger salary for longer than B2, B1 has paid a lot more into the CFSA than B2.  Nevertheless, they were both drawing exactly the same salary in their last (best) five years.  Therefore, their pension benefits will be the same.  The moral of this story is, if you have more disposable income early on, don't spend it all.  Invest it for the future.

 

[Eye In The Sky]

Good post with lots more 'variables'...I was aiming more at the 'in general' aspect, leaning more towards your AES Op Sgt/Inf Sgt comparison.  Lots of folks want to make CWO but I don't encourage them to 'plan' on it.  ;D

We haven't introduced provincial tax rates (high in NS) and housing costs (no PLD in Comox, probably can't get a decent house for under 450K) into the overall equation where things can balance out where the spec pay type could have less take-home...it happens.

 

[dapaterson]

On a similar note, getting promoted faster in your career (i.e. achieving higher pay quicker) will not necessarily increase your pension either.  Let's look at two boatswains:  Both join on the same day and then retire on the same day, 35 years later.  Boatswain 1 (B1) is very bright and energetic.  He rockets to the top and gets promoted to CPO1 in minimum time (14 years).  He spends the last 21 years of his career as a CPO1.  This means he spends 17 years in the top pay incentive category.  Boatswain 2 (B2) progresses at a slower rate and it takes him 26 years to make it to CPO1 (almost twice as long as B1).  Because B1 was drawing a larger salary for longer than B2, B1 has paid a lot more into the CFSA than B2.  Nevertheless, they were both drawing exactly the same salary in their last (best) five years.  Therefore, their pension benefits will be the same.  The moral of this story is, if you have more disposable income early on, don't spend it all.  Invest it for the future.

Bosun 1 blocked the trade for a generation, and probably should have CFR'd / SCP'd / UTPNCM'd to get commissioned and further increase his pay and best 5 years.

 

[dimsum]

We haven't introduced provincial tax rates (high in NS) and housing costs (no PLD in Comox, probably can't get a decent house for under 450K) into the overall equation where things can balance out where the spec pay type could have less take-home...it happens.

BC has fairly low tax rates.  The number being bandied about for posting from BC to NS is to lose about $500 off your monthly pay due to the difference. 

 

[Eye In The Sky]

Yup...pretty decent amount IMO.  Car payment/half a mortgage payment.

 

[Pusser]

Bosun 1 blocked the trade for a generation, and probably should have CFR'd / SCP'd / UTPNCM'd to get commissioned and further increase his pay and best 5 years.

True, but not everyone wants to be an officer and some make the transition better than others.  A lot of former chiefs can't get past the fact that they are no longer chiefs and can't handle the fact that junior officers don't get the same level of respect that chiefs do.

 

[gcclarke]

True, but not everyone wants to be an officer and some make the transition better than others.  A lot of former chiefs can't get past the fact that they are no longer chiefs and can't handle the fact that junior officers don't get the same level of respect that chiefs do.

In my experience, former Chiefs / POs are either the worst officers or the best officers, with pretty much no in-between.

 

[Pusser]

In my experience, former Chiefs / POs are either the worst officers or the best officers, with pretty much no in-between.

Agreed.

 

[Humphrey Bogart]

I'm a Lt(N) and honestly, the pay is pretty jammy and can be lucrative if you meet certain conditions and make certain decisions:

Give you a profile snapshot:

I'm in my early 30's and just nudged over six figures last year.  I have a common-law partner who works for Toronto-Dominion Bank and we have no kids.  I've made a conscientious decision to not buy a house as I have known a bunch of military members that bought houses and lost money when they were posted, etc.  When you account for interest payments on mortgages, maintenance, house insurance, property taxes and the fact that property values don't appreciate in value nearly as quickly as the stock market or other investments and by committing to buying a single family home you essentially tie up all your finances in to a single investment, it seems to me to be a poor choice especially with how often you could be posted.

I rent a one bedroom apartment in Victoria, it's small but meets our needs and is very modern.  It also only costs me $1500 a month and with PLD and the fact my partner and I split rent, we only end up paying $500 each per month.  I pay for electrical which because it is so warm here and I rarely run the heat, I spend around $35 a month on that.  I own a Toyota Tacoma Pickup which is almost paid off and is in very good condition and it costs me roughly $600 a month in payments with insurance coming out to $130 a month, internet and cellular coming out to $150.  My fixed expenses per month total up to around $1500, I probably spend another $900 a month on food and gas so around $2500 for fixed expenses.  After income taxes, pension contributions, etc, my living "play money" comes out to the following:

Net Income (after taxes):  $5518 - Expenses:  $2500 = $3000 of "play money" per month.  Some of that play money I use for fun and activities (travel, fine dining, hobbies) but a good sum goes in to investments, the majority of which are low cost indexed funds that passively track the S&P 500, NASDAQ, etc.  I manage all my own investments myself.  Get a couple of tours with the tax free status and a massive injection of cash and I can dump tonnes of money in to investments.  I can even hold the cash until the market is depressed and go on a buying spree and make a lot of money in the process.
 
I would eventually like kids and to own a home but I am not buying one until I am in an extremely favorable position to do so.  The spouse is a few years younger than I am so we still have time for children.  I could also make a very strong case against getting promoted because it would involve being posted and having my partner lose her job which would have a significant effect on our income generation. 

I used to work for a few senior officers and honestly, with the amount of money they were being paid, many didn't have two pennies to rub together which surprised me but then when I looked at their family situation and the sacrifices they had to make to get there:  wife didn't work, multiple kids, frequent postings involving taking losses on a house, etc. it made a lot of sense.  I am aiming to retire from the CAF at 42 which will be my 25th year of service which will give me an immediate annuity.  If I manage to get promoted another rank between now and then I will have a reasonably nice pension that I can compliment with my investments.  I don't plan on stopping work though, I will simply go do something else that I "Feel" like doing. 

I now tell every single soldier or sailor that works for me that if they are going to do two things:

1.  Get a Non-registered TFSA that you can use to hold securities.
2.  Invest your maximum contribution limit per year every year for 25 years. That's $5500 per year.  If you invested all your money in an indexed fund that tracked the S&P 500 which has averaged a historical 9.8% return on investment over the past 90 years and assume a reasonable average growth rate of 8%, that is $137,000 you have invested that you will make almost $300,000 in interest for a total of just over $430,000 dollars and that is assuming you reinvest none of your dividends.  Btw, all of that money is tax free  ;D

Btw, we also have the advantage of having pretty much the best job security ever, it doesn't matter what the economy is doing, we are still getting paid which means in time of depression, you can use your income to generate even more money by buying low.

 

[Infanteer]

I rent a one bedroom apartment in Victoria, it's small but meets our needs and is very modern.  It also only costs me $1500 a month

Just because its part of the discussion, I'll chip in on this bit.  I think you're dumping on home ownership a bit (although everyone's personal situation adds a unique context).

$1,500 a month is about what a $300,000k mortgage costs per month in payments.  My logic has always been you can either pay someone else's mortgage, or you can pay your own.  The $1,500 a month you are paying in rent is leaving your pocket, never to be seen again.  If you had a mortgage, at least half of that (discounting the other half for interest) would be going to the equity in your home.

Yes, there is risk with postings, but these can be mitigated in certain ways, which includes paying attention to the market you are buying/selling in (it is, after all, an investment).  As well, the CAF relocation program legal and realtor fees, which gives a CAF member a huge leg up on selling/buying property during a move.

I often compare this situation to a friend of mine in the US military.  US service personnel get a very generous form of PLD, called BAH.  The cost of living on base is equal to your BAH, so you either live on base and give Base Housing your BAH, or you live off base and use the BAH as you see fit (like PLD).  In some places, BAH is $2,000 to $3,000 USD a month.  My friend is retiring soon, and has lived on base his entire career.  So he is leaving after 20+ years of service, with no equity - he and his spouse will be a first time homebuyers.  When you think of what BAH x 12 x however many years in a career equals, it blows my mind that more folks don't opt to live off base down in the U.S. (although I understand there relocation benefits are not as good as ours).

Anyways, all that is to say, is that on top of your two things you advise people to do, I generally advise on purchasing a home, as over a career you will likely build enough equity that you can retire without a mortgage.

YMMV of course.

 

[dimsum]

When you think of what BAH x 12 x however many years in a career equals, it blows my mind that more folks don't opt to live off base down in the U.S. (although I understand there relocation benefits are not as good as ours).

The USN exchange guy is a good friend of mine.  He said that the USN (not sure about other services) offers very little for relocation benefits - it's essentially "well, you opted to live on the economy, so go ahead".  None of the fees paid, etc.

 

[Monsoon]

Just because its part of the discussion, I'll chip in on this bit.  I think you're dumping on home ownership a bit (although everyone's personal situation adds a unique context).

$1,500 a month is about what a $300,000k mortgage costs per month in payments.

I have a mortgage on a $300K house and between the mortgage, property tax, property insurance and average monthly maintenance my total cost of ownership is about $2300 per month. And frankly I'm saving somewhat on maintenance by doing much of the work myself; if I were living in a condo of the same value it would probably be even more in the form of condo fees with statutory reserves, etc. A $1500 total cost (which is what renting gives you) would cover an equivalent ownership situation of a property of perhaps $180K: not enough to buy anything in Victoria or any other reasonably-sized city.

I'm guessing the guy with the banker wife has done his math on this one  ;D

 

[NurseMyrtle]

Hi all, I've looked around but haven't been able to find the answer to my question. I was wondering what you get paid during basic officer training. Or more specifically what you get deducted. I *think* I have read on here somewhere that while doing basic you get deducted for living expenses (mess and living) but I'm wondering how much that costs. I'm wonder as I own my house and before I apply I want to ensure I have enough money in savings to cover my home bills.
Second question: what are the chances of getting posted back to where you come from after basic and all your training is done?
Third question (sorry for all the questions as I started typing I keep thinking of more): I know that BMOQ is longer than BMQ but are they seperate, like can you start basic with NCMs in your group and then they graduate and you stay on for the leadership specific training or is your starting group going to be all CMs vs NCMs?
Fourth (and hopefully last) question: what are the chances of being in the same group as a friend who has the same start date as you?
Thanks in advance for taking the time to answer my questions. Sorry they are all over the place, I have searched the site but was unable to find the right search terms to find the answers to these questions.

 

[tomahawk6]

Why not address your questions to the training center ? I know in the US a welcome packet would be sent out covering training,accomodations,pay ect. If not your best bet is contacting the training center/school or your recruiter.

 

[BeyondTheNow]

Hi all, I've looked around but haven't been able to find the answer to my question. I was wondering what you get paid during basic officer training. Or more specifically what you get deducted. I *think* I have read on here somewhere that while doing basic you get deducted for living expenses (mess and living) but I'm wondering how much that costs. I'm wonder as I own my house and before I apply I want to ensure I have enough money in savings to cover my home bills.
Second question: what are the chances of getting posted back to where you come from after basic and all your training is done?
Third question (sorry for all the questions as I started typing I keep thinking of more): I know that BMOQ is longer than BMQ but are they seperate, like can you start basic with NCMs in your group and then they graduate and you stay on for the leadership specific training or is your starting group going to be all CMs vs NCMs?
Fourth (and hopefully last) question: what are the chances of being in the same group as a friend who has the same start date as you?
Thanks in advance for taking the time to answer my questions. Sorry they are all over the place, I have searched the site but was unable to find the right search terms to find the answers to these questions.

I was wondering what you get paid during basic officer training. Or more specifically what you get deducted. I *think* I have read on here somewhere that while doing basic you get deducted for living expenses (mess and living) but I'm wondering how much that costs. I'm wonder as I own my house and before I apply I want to ensure I have enough money in savings to cover my home bills.

If you're married or common-law you won't be deducted the approx. $100.00/mth for quarters that single members are charged. All members are charged approx. $550-575+/mth for rations while there. So your total deductions (if you're single) relating to R&Q will be quite significant at approx. 650-675/mth, plus any standard government deductions, benefits, etc.

Second question: what are the chances of getting posted back to where you come from after basic and all your training is done?

Are you already a trained nurse and have passed your NCLEX-RN or will you be doing your BMOQ while still in school (so doing it in 2 MODs)? That makes a difference as to how your training process will unfold.

Whether or not you actually get your posting preference once all your placements and training is done is very difficult for anyone to determine. There are several factors involved. Someone specifically in the know about Nursing Officer placements will have to chime in.

Third question: I know that BMOQ is longer than BMQ but are they seperate, like can you start basic with NCMs in your group and then they graduate and you stay on for the leadership specific training or is your starting group going to be all CMs vs NCMs?

No. BMQ and BMOQ candidates are coursed separately at all times.

Fourth question: what are the chances of being in the same group as a friend who has the same start date as you?

That depends entirely on how many recruits they have and how many platoons are running with the same dates. You and your friends wouldn't know until you get your message.

 

[NurseMyrtle]

@beyondthenow
Thank you for answering my questions! I am currently a Registered Nurse, so will be a direct entry officer I think?. And yes I am single.
So my understanding is that during basic I would be paid as an officer cadet- so ~$2100 a month and then I've been told that once I've graduated basic that I get promoted to captain because I already have my RN and NCLEX done. (Please correct me if I'm wrong)
And also, is this pay gross or take-home?
And does my previous civilian nursing experience put me on a higher pay increment starting out? Or does only military experience affect that?
Sorry for all the questions, I don't want to go to a recruiter yet as I know I'm a year away from applying I just want to get my ducks in a row first. And it looks like I'll have to save some money to cover my home bills while I'm away.
Thank you!

 

[Eye In The Sky]

You might find some helpful info in the Nursing Officer thread, if you hadn't found it before. 

https://army.ca/forums/threads/4249/post-1448810.html#msg1448810

 

[BeyondTheNow]

So my understanding is that during basic I would be paid as an officer cadet- so ~$2100 a month and then I've been told that once I've graduated basic that I get promoted to captain because I already have my RN and NCLEX done.  (Please correct me if I'm wrong)

I believe Lt, although I only know that to be true based on the member not having completed their BNOQ/phases. Since you’ve already been practising, I can’t imagine you would still have to do any placements in a civvy hospital, but you’d still be required to complete the military-specific component, so I’m not totally sure how that would effect rank.

And also, is this pay gross or take-home?

Any figures you’ve seen specified anywhere would be listed as gross.

And does my previous civilian nursing experience put me on a higher pay increment starting out? Or does only military experience affect that?

I’m not sure, so can’t answer one way or the other.

Sorry for all the questions, I don't want to go to a recruiter yet as I know I'm a year away from applying I just want to get my ducks in a row first. And it looks like I'll have to save some money to cover my home bills while I'm away.

It’s still not a bad idea to inquire in order to start at least getting ballpark info figured out, especially related to financial planning. You will indeed take a hit while you’re in BMOQ. Unfortunately. Although tough, most are able to make it through relatively unscathed.

I’ll echo Eye In The Sky’s advice and give that thread a thorough read. As well, further questions may be better suited there, should you have more. I know there are a few users floating around here who can offer more solid answers.