I’m a remote worker. Here’s how the exchange rate affects my salary.
I’ve been working at Buffer for almost 2-and-a-half years. 🎉
Technically, I’m a contractor. This is because I live in Australia. At Buffer, US residents are on a local payroll and foreign employees are paid as freelancers.
You would hardly know it day-to-day. Buffer does so many great things to treat everyone fairly and equally, no matter where they live. We are a fully distributed company, which means we don’t have any offices or headquarters. Everyone is encouraged to work wherever is most happy and productive for them.
We also try to make the benefits and perks of working at Buffer equitable. Staff outside the US have healthcare, accounting fees, co-working and coffee shop expenses, internet and mobile data generously reimbursed. 🙏
Everyone at Buffer is paid in US dollars, according to a salary formula that has evolved over the years. We updated the formula quite recently.
In my time at Buffer, my salary has increased a few times. The first time was after I had worked at the company for a year. I received a percentage increase thanks to a loyalty component of the salary formula. The following year (2017) I received a one-time bonus in lieu of the loyalty increase in the previous iteration of the formula. I also moved from a product research role into a marketing role, and I was promoted within the marketing team career framework, from Level 1 to Level 2.
When I started at Buffer, my annual salary was US$82,992, excluding bonuses and other benefits. My annual salary right now is US$85,481, excluding bonuses and other benefits.
Seems pretty straightforward, right?
There’s just one external element that throws a little spanner in the works — the international currency exchange rate.
Because I’m paid via an international transfer that is converted from USD to AUD, the exchange rate determines how much cash actually ends up in my bank account. It certainly keeps things interesting - every paycheck is different depending on the mystics of currency market forces.
So while my salary has gone up at Buffer over the last 2 years, with the “little Aussie battler” growing in strength against the almighty greenback, my take home pay has actually trended downwards! 🙈
I created the chart above by plotting my semi-monthly Buffer pay against the exchange rate over time. The blue outliers are one-time bonus payments for a promotion and tenure. Now, at first glance this might seem like a very slow descent into budgeting hell — however let’s look at the history of the Australian dollar.
At today’s exchange rate my salary is about AU$109,000 per year before taxes. That’s pretty great! According to Payscale, the median salary for an entry-level product marketing manager in Sydney is about AU$80k. I’d be somewhere in the top 15%.
If I had been working at Buffer in 2011 and the same formula applied, my salary would have been less than AU$78,000. On the flipside, when the Aussie dollar bottomed out in 2001, my hypothetical salary would have been in excess of AU$160,000. 🙀
Check out the drop between July 2008 and November 2008. My annual salary would have gone from roughly AU$85,000 to AU$140,000 in the space of 5 months, without me so much as lifting a finger!
Which leads me to the million (thousand?) dollar question…
Which way is the Australian dollar trending? Can I expect further pay cuts from the exchange rate gods or will my fortunes turn around?
Armed with an economics degree and the internet, I still have absolutely no idea. 🤔
Is this a problem worth solving?
Factoring currency conversions into salaries is on the agenda for our team, and it will be interesting to see if we can come up with a way to mitigate the effects exchange rates have on salaries.
What do you think? I’d love to hear any ideas about how to stabilize pay for foreign employees, without exposing the company to a lot of exchange rate risk.
In the meantime, I’m fortunate to be in a position where I don’t have to worry too much about minor volatility in my income. I’m thankfully debt-free and try to live within my means. But I’ll still be cheering on the US dollar and hoping that the little Aussie battler stops climbing!
Having open discussions about salaries is important because it pushes us towards more equal pay and greater transparency in the workplace. I’d love to hear about your experiences if you’re willing to share them, especially if you are a marketer and/or work remotely. Thanks so much for reading!
