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Comment by 0xfaded | Hacker News Reader

It wouldn't take much in terms of salaries to corner the "Europeans that choose not to go to SF" talent market. A $60k salary is still pretty normal here in Denmark. I'm ex-SV doing my own startup, but I wouldn't take a salaried position at another company. It will be interesting to see if these billion dollar exits lead to even slightly more competitive tech salaries.

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Things I don't need to worry about/additional perks:

- No healthcare costs. Scraped elbow? Free. Brain surgery? Free.

- No saving up for college for my kids.

- 30 days of vacation + ~13 public holidays.

- No student loans (kinda-sorta, most people borrow money to not have to work during college), tuition is free in all universities and colleges.

- Goverment-paid pension savings

- On top of my salary, my employer also pays for

   - all insurances

   - 31,42% payroll tax (which I never see and is paid on top of my negotiated salary)

   - 10-15% of my salary is put in another pension savings account. Again, this is ON TOP of my salary.

   - private health insurance to fast track me to a specialist.

The healthcare issues in the US can be a little overblown. People in good careers get good healthcare insurance provided by the company. You often have to pay a copay to ensure you don't abuse the medical system, but seeing someone for a scraped elbow vs. brain surgery are basically the same nominal fee for the best health insurance. And you get to see the doctors you choose, when you want, often very quickly.

If you can't afford healthcare at all, they will bill you but you don't have to pay and they can't turn you away from a hospital emergency room. So basically government mandated free healthcare provided by private companies.

The problem is the lower and middle class, if you don't have insurance but do have something to lose, or if you have minimal insurance and a large medical issue, you can lose all your assets paying for healthcare.

What you said that's really interesting to me is that the high tax rate is paid in full by your company and not counted in your salary. Is that true all over Europe, like France for instance? I am always amazed by the really low salaries but if every bit of it is what you actually keep, it's not so bad. I didn't know it worked that way.

All well and good about healthcare being available and not-as-bad-as-people-say provided 'good healthcare by the company.' But there lies the problem, the dependence on those variables, "good", and "company."

a) What if you're self-employed? You're stuck with mediocre, expensive healthcare for the individual market.

b) What if the company is cheap or negotiates poorly the healthcare options? Sometimes they're mediocre.

c) Costs have been going up, and companies are finding ways to reduce costs (since someone has to pay for those padded healthcare executive salaries and healthy stock prices thanks for solid profit). Thus the same plan(s) get worse year after year.

d) there's a push towards 'high deductible, self-managed / pre-tax account' type healthcare, which is smiled upon as a fantastic way to give people choice. The reality is different, now not only is the healthcare company still the middleman that keeps a chunk that gets paid out to providers, but now it's up to you to 'negotiate' what healthcare service is important to you. Oh gosh, is it expensive? I'll skip this particular service.

The U.S. has got it all wrong, of course. I'm jealous of Swedish or other healthcare systems when I read through threads like these.

Bottom line: the mediocre healthcare system in the U.S. and the emphasis on giving middlemen lots of money for no reason is a barrier to innovation and self-employment. Why strike out on your own and take a risk on building something if you'll lose your precious company healthcare? This problem is only getting worse and clearly has an impact on the political discourse.

My point around the healthcare was that, yes it's an issue, no it's not really an issue for the HN crowd. If you are some sort of programmer/engineer, and want good healthcare, you can get it. And you will avoid making foolish decisions around it, and don't need people to make all your choices for you.

I ran my own small business, provided great healthcare for myself and a couple of employees, and managed to have good healthcare after I shut the company down and was unemployed for a while. I had to do a little research and make a couple good decisions, then it wasn't an issue. And that was before the Affordable Care Act, which provides free healthcare in many states for people who can't afford it.

The one thing is, if you are not working for a decent company, yes, you have to think about it and prepare for it before hand, it isn't all taken care for you without you doing anything. So I say, for the vast majority of people on HN it's not that bad.

And worst comes to worst, you are being irresponsible or have fallen through the cracks, and you get into a car accident, the hospital is going to take care of you anyway.

Well, in my state the individual market is tied to the state healthcare marketplace, and all of these are PPOs. At the worst, you'll pay $1200 a month for a plan whereby you have to stick to a finite network, and get approval every time from the primary care provider. And there's still a several thousand-dollar deductible. Even if I chose to offer $2000 a month for a plan that's a more open one, there's nowhere to give that money to someone.

I consider that a barrier to innovation / entrepreneurship because many people don't want to quit cushy jobs as employees for a situation like that.

Yea, well that is the result of our more socialized system. My better health care plan was canceled when the affordable care act was implemented, and I had to get a worse one. These government healthcare systems (which, long story, I happen to be on now, I don't pay a cent) are even worse. You want to see someone, you need to get permission. First, get in line to get permission, then get in line to actually get the specialist. And there is no option to do it any other way. So I don't see how the European systems solve these problems. At least in the US, in some places, we still have choice.

In Sweden you don't really have a plan. Everyone is covered regardless including basic sick pay. You can have zero income, pay zero taxes and file zero forms and still be covered like everyone else. The maximum co-pay per year including everything (treatment, hospital, rehab, equipment, medication etc.) is $300 per year. Some other European systems are more like "US light" where you have to qualify and choose. Some employers in Sweden will cover private treatment, vaccinations and more extensive sick pay (you already get 80% of x1.5 of median income if you are employed). But it isn't really required.

This is one of those misconceptions that’s constantly stated by Americans which couldn’t be further from the truth. I know, because I am an American and used to think that. Having lived in the UK for the last 7 years, yes for noncritical issues or elective procedures, you may have to wait a couple of weeks for an appointment (acute care is excellent by the way), but you always have a choice. You can pay for your own private insurance which is extremely affordable compared to the USA and go nuts if you want, or you can wait for the free care. It’s a better system, full stop. America is literally nuts with regards to healthcare.

> What you said that's really interesting to me is that the high tax rate is paid in full by your company and not counted in your salary. Is that true all over Europe, like France for instance? I am always amazed by the really low salaries but if every bit of it is what you actually keep, it's not so bad. I didn't know it worked that way.

It is most certainly not how it works in the UK! However for balance I should say that the employer does pay some tax and pension costs on top of your salary (employers NI and auto-enrollment pension). Whatever the advertised cost, you will be deducted tax and National Insurance by your employer.

Good to know. In the US, your employer pays half of the social security, that's around 7% of your income, plus some medicare taxes that are a lot less.

Although it's not nearly as bad as other people have it, even in a good job with good employer-provided healthcare, there are two things that still really bug me about US healthcare. One is a perennial worry that I'll somehow end up with a 6/7-figure bill anyway, for example because I ended up in an ER where some of the doctors were "out of network" (this kind of billing has now been banned in some states, but only a minority of them). If I had no savings I would just not pay the bill, but since I do have some, I worry this could wipe out years of savings overnight, which makes me anxious. The second issue is that it just takes so much time to manage all the bureaucracy. Usually health insurance will in fact pay (if you have a good one), but you can end up spending literally hundreds of hours on the phone, especially if you had the bad fortune to end up in a hospital. In hospitals it seems that every individual person you encounter sends a completely separate bill, half of which the insurance company will initially refuse to pay for various reasons. This can go on for many months after being discharged.

Actyally there is another tax too, not mentioned. The company is paying something called Employer tax which is about 100% of your sallary before the working tax.

So you get 30k before tax, 20k ends up on your account after tax deducted per month, and company pays state 30k more on top of the other 10k.

That doesn't sound right...

"No healthcare costs. Scraped elbow? Free. Brain surgery? Free.

- No saving up for college for my kids.

- No student loans tuition is free in all universities and colleges.

- Goverment-paid pension savings"

It's a little disingenuous to talk about all those 'free things' that 'others' or 'the government' are paying for, because it communicates that those costs are magically externalized.

They are not, of course.

Citizens are paying for all of those things through very aggressive taxation.

Denmark has basically the highest degree of government participation in the economy in the world. [1]

Taxation in Scandinavian countries run deep.

Swedens top tax rate is 67% (!!!) though this includes social security. Payroll tax (employer side of social security) is about 30%, deducted before transfer to employee. And then after you take your money home, you pay an additional 25% VAT on everything you buy.

Think about that: Swedish company allocates $100K to employee. ~30% deducted for SS, so employees income is really $70K. Now, you pay up to 66% of that in taxes (not at 70K, but for higher income earners - certainly a lot of Google folks would!), so say 50% taxes, 'take home' is now $35K. Now, you pay 25% taxes on everything you buy. Assume people save 10% conservatively, meaning $31.5K in spending, which is about $6 VAT taxes.

So from $100K in comp, you're paying $70K to the government.

In the US obviously it would be considerably less.

I know all this has been argued before, but it's important to consider how aggressive that taxation is, I don't think it's ever fair to talk about 'no student debt' or 'free healthcare' without taking into consideration that level of taxation.

The real issue is the cost vs. quality of things like healthcare.

Now - in Canada, we have similar levels of taxation as California or New York and we get healthcare out of that, so now that's something to talk about ...

[1] https://data.oecd.org/gga/general-government-spending.htm

[2] https://tradingeconomics.com/sweden/personal-income-tax-rate

When I asked a Swede why salaries in Stockholm are comparatively low even by german standards (mostly because cost of living is higher in scandinavia while salaries are similar) he told me that it might have to do with the fact that in Sweden people are not supposed to rack up huge savings because they will be taken care of by the state when they retire to be able to still live comfortably. Basically you just need to earn what you need to live comfortably unlike in the US where you have to do a lot not to be poor when you reach retirement. The guy was not in tech and also a generation older than me, so i am not sure if it's fully true, but i was surprised by the low salaries in relation to the cost of living.

> in Sweden people are not supposed to rack up huge savings because they will be taken care of by the state when they retire to still live comfortably

This applies only to native Swedes. As a foreigner, even EU national, it's trivial to end up overboard of the social security net. Beware of tollerating low compensation fed by the "we'll hold your back" cliche. The same situation in Germany.

In Germany, even if you are a German national, there's no guarantee that the state will be able to fund pensions as it does now, due to the shift in demographics.

I love it here, but I operate under the assumption that I'll have to provide for myself in retirement.

Free education gives an "oversupply" of educated workers. Plus high marginal tax incentivizes payment by other mean than salary (time off, short work hours ...).

Sweden of the Scandinavian countries is the odd one out. The serious hardworking big brother. They always had big companies (IKEA, Volvo, Ericsson) compared to Denmark and Norway. Far stronger engineering tradition. Self-sufficient with nuclear plants, weapons, automobiles and so on under the cold war. Far more open to immigration. Bigger difference between rich and poor. Better and deeper financial markets. More hierarchical.

No, I posted about this in another comment thread. Here's it quoted:

> One thing that should be emphasized when comparing salaries between Sweden and other countries is how there is a secret tax baked into the Swedish salary -- arbetsgivaravgiften.

> Basically, in all other nationalities (to my knowledge), you are quoted how much the company will pay for your salary. Then tax is applied, and whatever is left is what you take home. In Sweden, you are quoted an in-between number. If you are offered $100k before tax in Sweden, that means the employer is _actually_ paying something like $143k. You will still not be getting $100k, but rather that is the "taxable income", so you end up with about $70k, but your employer paid $143k, but you agreed on $100k. Makes no sense.

I used to think like you, with this idea that Swedish salaries are substantially lower -- but if you use the true tax, salaries are actually comparable.

same in Germany btw. Salaries are gross, before income tax, still the employer pays roughly 1.4x of that gross salary.

One thing that should be emphasized when comparing salaries between Sweden and other countries is how there is a secret tax baked into the Swedish salary -- arbetsgivaravgiften.

Basically, in all other nationalities (to my knowledge), you are quoted how much the company will pay for your salary. Then tax is applied, and whatever is left is what you take home.

In Sweden, you are quoted an in-between number. If you are offered $100k before tax in Sweden, that means the employer is _actually_ paying something like $143k. You will still not be getting $100k, but rather that is the "taxable income", so you end up with about $70k, but your employer paid $143k, but you agreed on $100k. Makes no sens.e

This is the way salaries are quoted in Finland as well.

I suspect it's the same for many countries - though with different percentages. And yes makes comparisons very hard.

Update: looking at this comment - this is not unique - same in Croatia: https://news.ycombinator.com/item?id=17941203

Isn't most of the Europe like that? Salary on contract is halfway between before-all-taxes and take home pay. Some taxes are paid by the employer, some others deducted from the employees salary. Way too unintuitive, but it is what it is.

I didn't know that! But it seems difficult to me to justify this system. Cost incurred for paying an employee is tax, anything else is make-believe -- the market forces are decided on cost to the employer, not quoted salary.

It's the same in the USA. The percentages are just different. In the USA, if you are quoted $100k salary, it costs the company about $120k+ (depending on how you account/include things).

Yes, it complicates things, and makes comparisons a bit more difficult. But it makes sense.

In the USA, depending on the company, you will have to add in healthcare as a "cost to company". That's basically included in the Swedish taxes.

Plus you have to normalize culture and employee protection/rights.

In the USA it's not abnormal to get 2 weeks of vacation per year, less than a week of "paid parental" leave, and be expected to be available to answer emails while you're on your paltry vacation. You can be fired at any time for any reason or no reason (in most cases and states you are an "at will employee")

In Sweden, this work:life balance would be preposterous. Employees get 6+ weeks of vacation a year, over _1 year_ of _paid_ parental leave, working healthcare, subsidized childcare, etc. You cannot be fired without cause and notice.

In the USA, other than social security (which is another topic), employees get very little back for their taxes. But we have a lot of wars to pay for.

You need to look at the big picture when you compare these numbers.

It's the same everywhere.

You get quoted what you get paid, and you pay tax on that.

That's rational.

It's just that they way 'employer taxes' are calculated is a little different - and in Nordic countries they are massive (thereby making it feel 'hidden').

VAT when baked into prices is also kind of hidden as well.

I've always been perplexed by the massive salary rift between Europe and SV.

There's an even bigger rift between startup valuations. Less investment, less value created or employee, lower salaries.

To be fair, Europe and the more able governments are making up some of the gap through grant money. Although this leads to a cottage industry of funneling government money into others pockets, whether it be through companies that help you apply for the grants or just bullshit startups that aren't properly vetted.

You have to normalise by purchasing power and take the quality of life into account. My 60k salary in Poland gives me similar quality of life like 100k in Denmark and 140k in SF.

Wait, you have a 60k USD salary in Poland? Where do you work, what do you do? I'm on 40k and I already feel like this is better than 100k in Denmark, considering their higher taxes and insane cost of living

60k is high for a Polish software developer, 140k is probably below the median for SF.

Yes, that's another abnormal labor market. I'm from Croatia, but I've seen similar things with colleagues from eastern and central Europe.

IT salaries here are much better than western Europe compared to other professions and it's not worth migrating.

I've interviewed for jobs in Netherlands, Belgium, Denmark and Germany and the highest offer was 75k € for job in Brussels region.

According to online calculators thats 40k take home salary with housing and services at least twice as expensive. My 50k € Croatian salary leaves me with 33k net with vastly better quality of life.

Why are western Europe's developers paid so little while living in much richer countries?

But SF in general is such a unique case because of the huge tech market and high cost of living. 70-80k EUR in Berlin get you as far as 150k USD in SF i would imagine. Also very different cultures and socioeconomics in terms of taxes, state welfare etc. It's just hard to compare. But when I see that tech salaries in expensive European cities like London/Stockholm aren't really much better than in Berlin, I am a bit perplexed too to be honest. Most of it has to come down to demand and supply in the end.

Some cost don't vary by location, and whatever you have left over after living expenses is absolute purchasing power. In the SF I could (and did) fly light aircraft. Fat chance doing that on $60k no matter where you live.

The wage statistics in e.g. Sweden is after a 31.43% "federal" (royal?) pay-roll tax is deducted.

BLS, US median for programmers:

82 240 USD/y

https://www.bls.gov/ooh/computer-and-information-technology/...

Engineering Union, Sweden, median for union programmers:

61 416 USD/y, as reported.

80 719 USD/y, including payroll tax.

I believe other European countries could report data in a similar manner. The employer cost is similar.

Only anecdotal, but $60k at a startup in Denmark is not uncommon.

If we assume Danish wages are similar to Swedish, the $60k bracket should be the most common, actually.

I don't really trust these fantastic Silicon Valley wage statistics. There seems to be bad coverage over a wide range of companies, and it mostly seems to be self-reported in a non-organized way.

BLS collects a wider range of statistics than PayScale or what not the HR departments are spamming with good reviews and salaries.

https://www.huffingtonpost.com/entry/silicon-valley-salaries...

To even base an article on those numbers is borderline fraud.

For "San Francisco-Redwood City-South San Francisco, CA Metropolitan Division" BLS reports $106k mean wage for programmers.

https://www.bls.gov/oes/current/oes151131.htm

Swedish Engineering union reports mean wage:

69 543 USD/y in Stockholm

91 400 USD/y including payroll tax.

So the difference is 1.1k USD more a month for the median Bay-area programmer compared to Stockholm in employer cost. It's not really raining VC money over the SF area programmers compared to e.g. Stockholm, where there is more or less none VC money.

There's really no point in climbing over 60k/y in Sweden since you start to pay upwards 50% tax on that. Perks are also taxed, so better condition/more vacation is better way of "raising" the salary.

https://en.m.wikipedia.org/wiki/Taxation_in_Sweden

I don't think computer programmers is the right search term, you want the entry for software developers:

https://www.bls.gov/ooh/computer-and-information-technology/...

103 560 USD/y

about 25% higher than swedish pre-tax and taxes are a lot lower in most of the US

US gdp per capita ppp is 54k vs. 37k for EU, so 45% higher, its unsurprising salaries are higher

Oh, well my calculations are off by 25% then and my point kinda invalid.

Never heard about a distincion between a developer and programmer. Seems to be a distinct BLS category.

Two main contributors to this in my experience, and both suggest this is unlikely to change for the foreseeable future.

Part of it is cultural, in that there is still a widespread perception that software engineers are fungible cogs and that no one could possibly be worth that much more than the average technical worker in any other industry -- they value the contribution like industrial labor. I do a lot of work in Europe and many business people find it inexplicable that any software engineer could be worth a senior manager's wage.

The second part is that while wages are relatively low, the cost of employment is astonishingly high in many European countries. Consequently, the fraction of employment cost that gets delivered to the worker as wages is much smaller, all other things being equal. From an employer's perspective, the employment costs are much closer than the paycheck suggests. The company only cares about employment costs, not wages per se. This is unlikely to change anytime soon because it is a manifestation of the social labor ethos common in Europe.

Me too - though I also am perplexed by the massive "respect for other people's down time" rift too. It always saddened me when people said they'd be on vacation and then details of how to bug them with trivial issues.

That being said, I suppose I'm a little hypocritical because I live in Europe and work remotely for a US company. I was already doing fairly well (not astronomical) by local standards but got a 40% raise by just being normal by US standards.

It makes me wonder why there isn't more entrepreneurship here. Labour is cheap and if you fail you're unlikely to die in a gutter (at least you have health care). Hell, even commutes are better for the most part. It should be easier to start something in Europe than in California, not harder. Maybe I'll give it a shot after naturalization.

We have 1.5 months off (paid). I never work past 5pm and most days not past 4pm (4 is when I get the kinds from school).

I could probably make 50-100% more somewhere else but I’d likely be working much more. What’s the hourly pay difference?

There are things like cost of living and social security nets that account for the difference, but even then there's still a gap, albeit smaller. It seems that you do have more purchasing power in the US than in Europe, if you're college- or PhD-educated.

On the flip side: I know a few people who turned down opportunities to go work in the US, or who went there and came back to Europe after a few years. Having not worked outside Europe, I'm always curious about discussing the various pros and cons, and although the pros were fairly obvious (good weather all year long, astronomical salary, etc.), one of the cons listed was invariably "I have to live in the US". Exactly why this was a con changed from person to person, but it was always there, and couldn't be accounted to long distance since countries like Japan or Singapore were fine.

I'm going to hazard a guess and say that there's something intangible (which could probably be best ascribed to 'quality of life', as vague as it sounds) that makes very competent people stay in or go back to Europe, and this limits the brain drain somewhat and maintains competition for lower wages on this side of the Atlantic.

I'll add a +1 to your list. I'm now in the fortunate position of being able to sit anywhere in the US or the EU and work, and I'm sitting in the US.

Pro: The weather is fantastic. Running a sole proprietorship is easy.

Con: Everything else. I'm absolutely not growing old in this place, and I will definitely move back to Europe before I retire.

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