The 1% or “one-percenters” are those whose individual income is higher than that of 99% of other people. The one-percent are rich. Very, very rich.
How much do you need to earn to be in the top 1% in Canada? The number may surprise you. Right now, you only need ot earn $244,800 to be counted among Canada’s 1%. But that threshold is getting higher every single year.
What does it take to be in the 1% in Canada?
The threshold to join the 1% in Canada is only $244,800. However, the median income of a one-percenter is $338,300 and the average is a whopping $496,200.
What’s even more shocking are the incomes of 0.1% and 0.01%. If you want to see how truly rich the rich are, check out those figures!
Here are the threshold, median, and average incomes for the top 1%, 0.1%, and 0.01%
|Income Bracket in Canada||Threshold||Median||Average|
The threshold income is the minimum amount it takes to be considered part of that income bracket. The median income is the amount for which 50% of people in that income make more, and 50% make less. The average is the average income for that income bracket.
Top 1% Income by City
Unsurprisingly, the income and wealth needed to be in the upper echelons of wealth vary by city. A one-percenter in Calgary earns twice as much as a one-percenter in Montreal.
The rich tend to live in big cities, so the threshold to be part of the 1% is typically, but not always, higher in big metropolitan urban centres. Below is a list of the top 10 richest cities in Canada, and their corresponding 1% incomes.
Is this individual or household income?
The 1% is determined by how much they individually earn. It is not based on household income.
In Canada, all tax-filers file individually, even if they are married or living common law. All the income thresholds for the top 1%, 0.1%, and 0.01% are based on individual incomes, not household incomes.
What’s interesting about the wealthy is that most people tend to marry within their socioeconomic class. This suggests that one-percenters will tend to marry other one-percenters, supercharging their household income. If you want to see a real power couple, it’s two one-percenters bringing in multi-six-figures each.
Increasing female participation in the workforce and narrowing of the wage gap has helped women gain economic ground. But it’s also exacerbated the wealth gap by creating super-earning households.
But there’s one hang up… the gender imbalance at the top is staggering.
The gender wage gap is the worst for the 1%
One of the things that manages to be simultaneously shocking and unsurprising is the gender wage gap at the top.
For example, to be in the 1% as a man you need to earn at least $234,129. For a woman you only need to make $160,552 to be counted among the 1%.
One-percenters are predominantly men. And the higher the income threshold, the fewer the number of women represented. Where women make up nearly one-third of the top 10% of income earners, they are less than 1 in 8 of the top 0.01%.
Here is the gender balance of income brackets in Canada:
|Income Bracket in Canada||Men||Women|
Why do women lag behind men in the top 1%? The same reasons they lag behind at all income thresholds. The highest paying industries are dominated by men, men tend to be paid more than women for the same job, and women are more likely than men to take time away from the workforce for caregiving or to raise children.
Unsurprisingly, women in the 1% were less likely to be married or have a common-law partner, and less likely to have children than their male counterparts.
How do I join the 1% in Canada?
Getting to the 1% in Canada isn’t easy. After all, you have to out-earn 99% of Canadians. But it is straightforward. You can take a series of steps to get you to the end goal, one after the other, just as though you were building an investment plan.
Choose a high earning career
If you want to become part of the 1%, you can do it as an employee. There are many professions that will pay you over $250,000 per year, which is an individual income high enough to be counted in Canada’s 1%. Most of these jobs concentrate in technology, healthcare, and finance, but you can find 1% salaries at the top of most industries.
Many of the highest earning careers will require a bachelors degree or higher, most of which need a professional degree. If you want to join the 1%, expect to spend 4 to 8 years in universities to get a BSc, Masters, or doctorate that can command the salary you want.
Start a business
If you’re not in the mood to spend decades in school and climbing the corporate ladder, the shortcut to joining the 1% club is starting a business. Entrepreneurship is an especially attractive route to wealth because there is no income ceiling. You don’t have to stop at the 1%, you might be able to sneak into the 0.01%!
That said, starting a business that generates an 1% income is much harder that getting a job with a 1% salary. Coming up with your own idea, building a company, and then scaling it to support a one-percent income is no small feat. But it can be done.
Expect to devote anywhere from 2 to 10 years to building a business that will pay you a 1% income. You can see, this timeline isn’t much shorter than that to earn a 1% salary in the workforce, but at least you’re in control of your own work.
Invest in multiple income streams
While your career or your business will be your main drivers to get you to the one-percent in Canada, you should cultivate as many income streams as you can. The more money you have coming in, the closer you get to being counted among the 1%.
You might choose a second job or side hustle on top of your main gig. Earning $180,000 base salary and then doing consulting work for another $70,000 will push you into the 1%.
A better choice is to invest in income generating assets, like dividend stocks or investment properties. These assets require upfront investment, but then produce a regular income stream.
Most millionaires have multiple income streams, so it makes sense that in order to get to a 1% income in Canada, you would do the same!