As restrictions rolled back in some popular cruising destinations this summer, some of you were fortunate enough to embark on your very first season as crew. Firstly, congratulations! We know how tough it has been — and continues to be — across the industry, so if you have landed your first job on board, well done.
We know it’s exciting to be at sea for the first time, but we also know just how frantically busy you get. It’s nonstop and time is in short supply when it comes to managing your personal finances. How on earth do you find the time to research things like bank accounts, savings options, pensions, and investments? And what about taxes? Do you know where you’re obligated to pay tax? For yacht crew, the country in which you must pay tax on earnings may not necessarily be the same country in which you’re a resident.
Also, are you aware of the different tax advantages available to you as superyacht crew? There is a lot to consider and it can get confusing pretty quickly. During the lockdown period, we spoke with a lot of crewmembers who used the time to get their financial and tax affairs in order. Many of them were surprised by how much there is to understand and organize, especially when starting out in the industry.
Here is just a taste:
- Opening the right bank account
- Knowing where and when to declare tax to avoid falling foul of authorities
- Applying for any relevant tax benefits
- Reviewing your employment contract to understand if you are covered for things like
onboard accidents or illness
- Having a solid savings plan in place for things like holidays, training opportunities, and longer-term goals such as buying property or retiring early.
We realize it’s a long list, which is why it’s important to prioritize. And it’s also why we use our three-pillared approach — banking, taxes, and savings, in that order — to help crew understand their priorities. It’s about getting the right bank account(s) sorted, understanding tax obligations and tax location (plus knowing what tax benefits there are to take advantage of), and then looking at savings and investment options. Just like the foundation of a house, these three pillars provide a solid foundation for managing your finances and coming up with a plan for your financial future.
This article originally ran in the October 2020 issue of Dockwalk.