The pros and cons of sharing your salary with coworkers

When was the last time somebody asked you, “How much do you make?”

If you’re like many Canadians, the question may have taken you aback, especially if the individual wasn’t a close friend or family member.

Is there ever a good time to discuss your salary, though?

Below, I’ll outline some basic salary disclosure etiquette, explain some cultural differences I’ve noticed in my travels, and go over the pros and cons of discussing your salary with coworkers.

IS IT RUDE TO ASK ABOUT SALARIES?

With current high inflation rates and the recent federal minimum wage increasing to $16.65, it’s likely that more people have been discussing (and questioning) their current salaries and how fair they are.

I’ve also noticed an interesting trend on social media platforms such as TikTok, Instagram Reels, and YouTube shorts where content creators approach strangers and ask them questions like:

• How much money is in your bank account?
• What do you do for a living?
• How much do you make per hour?
• What’s your salary?
• What’s your trading account balance?

Some participants are more than willing to share these details or at least give a ballpark figure, while others take offence and decline to say anything.

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As a general rule, it’s considered bad etiquette and often rude to approach a stranger and ask them about their personal finances. It’s a very direct and personal question, similar to asking a stranger what their age or weight is.

This is especially true in developed economies such as Canada, where money often correlates to an individual's social status.

Nordic countries

In Canada, tax records are confidential, and only the CRA knows your exact income, with the exception being certain government employees such as the ones found on the Ontario Sunshine List. However, tax records are publicly available in some Nordic countries for all taxpayers.

For example, in Norway, any taxpayer over 16 can log into the country’s tax registrar and view the records of every other taxpayer in the country. Tax records have been public in Norway since 1863.

Because of this, you may find that those living in Nordic countries are more open about their income, taxes, and salaries.

China

In some Asian countries such as China, discussing pay amongst family and friends may be more common. For example, a parent might inquire about their child’s or their significant other’s income to see if they’re a good match and can provide a good living.

I’ve heard from some of my friends who were working and living in China that their partners’ parents have asked them how much money they earn.

SHOULD YOU DISCUSS YOUR SALARY WITH COWORKERS?

If you’re worried that discussing your salary with coworkers will get you fired, you can rest assured that there is no law stopping you from doing so.

Discussing salary, either with colleagues or with your employer, can have several potential benefits:

1. Promotes transparency: Discussing salaries openly can help create a more transparent workplace. It eliminates the mystery around who earns what and can create an environment where employees feel they're treated fairly.
2. Reduces wage discrimination: Salary discussions can reveal disparities and help reduce wage discrimination. It can expose any gender, racial, or age-related pay gaps and lead to corrective measures.
3. Encourages negotiation: By knowing what others earn, employees can better negotiate their salaries based on the value they bring to the company. It can provide employees with the necessary information to advocate for themselves.
4. Aids in decision-making: Understanding the range of salaries within a role or industry can help in career planning and decision-making. For example, if someone is considering switching jobs or industries, knowing the salary ranges can inform those choices
5. Boosts employee satisfaction: When employees feel they are fairly compensated and that pay scales are transparent, they tend to have higher job satisfaction. This can lead to increased productivity and lower turnover.

But be careful, discussing salary can be a delicate topic and comes with several potential downsides:

1. Envy and resentment: A significant disparity in the salaries of employees doing similar work could breed resentment and jealousy. This could lead to a negative work environment, harming relationships and potentially causing conflicts.
2. Discontent and demotivation: Learning that a peer earns more for the same role might demotivate some employees. This could lead to decreased productivity or cause employees to look for work elsewhere.
3. Pressure on management: Salary discussions can lead to pressure on management. If there's a perception of unfairness, managers may face demands for raises, which could affect the company's budget or create tension between management and staff.
4. Privacy concerns: Some people may feel uncomfortable discussing their salary because they consider it private. They might feel pressured or invaded if salary becomes a common topic of discussion.

USING ONLINE SALARY DATABASES

If you’re curious about what a certain position pays at a particular company, you can start by researching average salaries on online salary databases.

These databases have users submitting their own salaries anonymously. The more users that submit for a specific position, the more accurate the salary data tends to be. In general, I would trust the salary accuracy of a position with more submissions over one with less.

Christopher Liew is a CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers on his Wealth Awesome website.