We have all heard that the rich are getting richer and that wealth is incredibly concentrated at the top of the ladder.
Canada is no exception. Nearly 11,000 people in Canada are ultra-high-net-worth individuals (UHNWIs), meaning they hold more than $30 million in liquid assets and make at least six figures per year.
So, what yearly earnings will put you in the top 1% of income in Canada?
A yearly income of over $500,000 is required in order to be in the top average 1% of earners in Canada in 2022. According to the Economic Policy Institute, this number is as high as $758,434 in the United States.
Let’s get into the details.
Yearly Income To Be At the Top 1% in Canada
Data released in 2019 by Statistics Canada (StatCan) indicates that the top 1% of Canadians made on average around $513,700 in a single year.
This is the latest year that the data was available and is before any taxes. The numbers from year to year fluctuate, but for 2022 it should be close or higher than that number. As a safe estimation, a yearly income of over $500,000 for 2022 is reasonable.
What’s really interesting to note is that this was a 3.5% income increase from the previous year (2018 average salary was $496,200) for the top 1% of earners in Canada. The rest of the Canadian population only saw an income increase of 0.2% during that same time period, significantly less than the growth seen by the top 1%.
Median Income of Top 1% in Canada
The median income of the top 1% eliminates the outliers of the extremely rich that skew the results higher for the average. The median income for the top 1% income group in Canada as of 2019 is $345,300, and that was achieved at a median age of 53 years of age. This is significantly lower than the average above.
The Rich Get Richer
According to Statistics Canada and a variety of other research institutes, the yearly income of the top 1% tends to rise faster than the rest of the population.
I’m sure we have all heard that the richest of the world are getting richer and that income disparity is growing with each passing year.
Unfortunately, many studies also show that this income inequality trend became even more exacerbated during the COVID-19 pandemic, with the top 1-5% growing vastly in wealth, especially in North America.
The top 1% statistics can be seen as a good benchmark to see how a country is doing economically.
But it’s also good to notice that it sheds light on this disparity. For instance, StatCan reported that the average income needed to be in the top 1% of earners in 2016 was $433,500 in today’s dollars.
In 2022, this number is likely over $500,000, and the same growth rate is not reflected in the incomes of the remaining 99%, especially not in the bottom 50%.
If you read my Net Worth By Age In Canada post, you may remember that one’s average net worth has a positive correlation with their age in Canada.
Naturally, a similar trend applies to the top 1% in each age group. Here’s the net worth of the top 1% of each age group in Canada:
|Age||Average Net Worth of the Top 1%|
|35 to 44||$2,028,681|
|45 to 54||$4,260,230|
|55 to 64||$7,303,251|
|65 and above||$7,506,119|
As can be seen, the net worth of the top 1% grows significantly between each age group, with the exception of the jump from the 55-64 to 65 and above age groups.
This levelling off can be attributed to the retirement and/or increased spending of those who are above 65. Of course, investments are likely to appreciate even after retirement, but a decreased salary and increased spending still make a big difference, resulting in this levelling off.
It is also no surprise that the net worth of the top 1% grows by more than $1,420,077 between the below 35 and 35-44 age groups, as younger people pay off their student loans and get settled in their careers.
But the biggest growth of net worth clearly comes later in life, which should be uplifting for us all. There is a jump of $2,231,549 between the 35-44 and 45-54 age groups and, most significantly, a jump of $3,043,021 between the ages of 45-54 and 55-64.
As a result, the 55 to 64-year-old age group seems to be the wealthiest in Canada, with their top 1% having an average net worth of more than $7 million.
This can be for a multitude of reasons, such as investments growing with a combination of contributions and interest gains, pay grades rising due to gained expertise, and inheriting large sums of money becoming more likely.
Whatever the reason, one’s average net worth grows as they surpass each age bracket, and there is no exception for those in the top 1%.
According to a 2019 StatCan study, 2.9 million people out of about 28.5 million earn more than $100,000 per year. This means that about 11% of total persons with income in Canada make over $100,000 per year.
The median total income in Canada is $37,710, which represents the income value lying at the very middle when all the numbers are sorted in an ascending or descending order.
What kind of people do you think make up this 11% of individuals who make over $100,000?
A 2019 study by TD bank can shed some light: their research shows that women are actually less likely than men to have a high household income. Geography also plays a big part, as Albertans earn the highest wages in Canada.
Canada’s median net worth figures for different age groups are listed below as reported by StatCan, Canada’s national statistical agency. As I mentioned earlier, net worth figures tend to rise with each age bracket, with the exception of those 65 and older.
|Age||Median Net Worth|
|35 to 44||$234,400|
|45 to 54||$521,100|
|55 to 64||$690,000|
|65 and older||$543,200|
The above numbers apply to individual persons. The median net worth of Canadian families was $329,900 in 2019.
The top 1% of earners in Canada make hundreds of thousands of dollars per year, and their incomes grow significantly with each passing year. Statistically speaking, most Canadians are more likely to be in the 99% category, but this certainly does not mean that they are not well-off.
It is true that wealth is concentrated at the top, but regardless of whichever “group” you fall into (that is, whether you are in the top 5%, %10 or 20%, or in the bottom 50%), the truth is that most people are trying to make it to next step in the ladder.
I’m sure that many of those who fall into the top 1% are eyeing the top 0.1% megamillionaires, which is likely true for most people going down the income ladder, as well.
It feels like there is always more money to be made and more wealth to be acquired, but I recently read several studies that found that the happiness people derive from money levels off past making $80,000 per year.
Either way, one of the best ways to grow your net worth and get to the next “group” can be by supplementing your income through a variety of ways. I find side hustles and income-generating hobbies can be great for this.
Want to read up more on net worth in Canada? Check out this post on Net Worth By Age In Canada to see how you stack up.