If we look at Nu.500,000 as an annual salary in Bhutan, it sounds like a lot of money. But is it really a good annual salary in Bhutan?
Can one live with a Nu. 500,000 annual salary in Bhutan? Where it stands in comparison to an average salary in Bhutan?
Let us consider all possible situations, and see if it’s a generous salary in Bhutan.
Gross Salary and the Net Salary
Gross salary is your salary prior to statutory deductions like TDS, Health Contributions, Provident Fund etc.
You know now – net salary is your salary after these statutory items are deducted from your gross salary.
To get as many situations as possible, let me consider this Nu. 500,000 annual salary as a gross salary in Bhutan.
Monthly Salary and Deductions
If an annual gross salary in Bhutan is to be Nu.500,000, a monthly gross salary must be Nu.41,670 (closer convenient amount).
The Labour and Employment Act of Bhutan 2007 requires organizations to having provident fund schemes.
The provident contribution rates in Bhutan can be above 5%. In this case, let’s just take 10%.
This means Nu.8,334 will be the monthly PF in your name. But Nu.4,167 will be deducted from your salary.
In this level of monthly salary, the applicable TDS is Nu. 1,473 according to the TDS Rates in Bhutan.
When these deductions are considered, the net salary is Nu.35,654.97 in a month and Nu.427,860.00 in a year.
Since, the net salary is the amount you get to use, the previous question of ‘will it be enough’ must be asked from the net salary perspective.
Is it an Average Salary in Bhutan
There is no data on salaries released by government agencies in Bhutan. As per this website an average annual salary is Nu.447,300 – Nu.37,275 per month.
We can’t conclude if it is a gross or net. However, the way they collected data and also the sample sizes, it looks realistically believable.
Whatever we consider it – gross – net – Nu.500,000 is above an average salary. Can we live in Bhutan with Nu.500,000 annual salary?
Can Live in Bhutan with Nu.500K?
It depends on your household basic expense and district you live. If it’s in place like Thimphu, rental expense alone will take more than 40% of that monthly net salary income.
I live in a 3BHK flat in Thimphu with my 2 kids and wife. The monthly rent is Nu.16,000. I spend at least Nu.15,000 per month on groceries, internet, utilities, and other expenses.
I don’t know, maybe that might provide some basis of comparisons. If it’s outside of Thimphu, rental expense will be lower.
Ultimately, to a major extent it depends on one’s financial disciplines and management prowess.
There are people I know in Thimphu who earn lesser than Nu. 40,000 per month yet live quite well.
However, there are people who earn more than Nu.60,000 yet don’t live as good as someone earning Nu.40,000.
Can You Save and Invest with it
Nu.500,000 is above an average salary in Bhutan – though not by a huge margin. Can you save and invest with this salary in Bhutan?
It will be possible to save and invest – it’s for sure. However, it might take longer to reach your targeted portfolio goal.
You will be able to live like a common Bhutanese – no luxury apartments, no fine dining, and obviously no oversea travels.
Nu.500,000 is a good salary but not a generous one. University graduates in Bhutan, most of them, get their first jobs at this level of package.
Do you think your current salary is a generous one? Are you able to save and invest with it?
