Comment by nolok | Hacker News Reader

Comment by nolok | Hacker News Reader

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Question to non-french here, does your advertised salary include the employer's tax ?

For exemple here in France, on the salary my employer pays, it's divided pretty much like this: 40% employer's taxes, 20% employee's taxes, 40% final amount of money you put in the bank when all is said and done.

BUT my negociated salary, the one I signed on, never included employer's taxes, so for a 100€ salary I never discussed 100€ or even thought of it at any point, my contract has always been about 60€ (and then I pay about 20€ in taxes).

For me what that really changes is that:

- if employer's taxes increses, I have no idea about it, and my pay check doesn't change at all (neither if it decreases)

- our perceived salary seems to be a lot lower than some other countries.

So what I'm asking is, when you guys speak about that kind of salary being way too low, is it a "complete" salary or is it after employer's taxes ? I live with less that those 60k$/42k€ and I can afford a nice middle class life in the middle of Paris plus vacations every year ...

PS: actually if you look at french job offers, you will see "brut" and/or "net" salaries, brut is pre employee's taxes, net is post.

In the US, yes. The various taxes that employers must pay are paid separately, not taken out of their salary. If someone is talking about $60k or whatever, their takehome is $60k-federal income tax - social security tax - medicare tax - state income tax (some states don't have this, but most do)- local income tax (rare). On top of that, you are also likely going to have deductions for health/dental/etc insurance, and then pre-tax payments to your retirement plan (401k).

Separately, the company must pay a few other taxes on that $60k (nowhere near 40%, though)

For FICA (SS/Medicare) the employer pays as much as the employee. The FICA rate is 15.3% of your base pay(there is an upper limit), you pay half and the employer pays half (except for 2011, stimulus package and all, the employee part of the SS part of FICA is reduced). Typically with most large employers the employer pays 70-80% of the medical insurance premiums, varies by company. Same for Dental, long term disability, etc. Typically the employers overall cost is 20-30% of your salary.

In the US advertised salaries don't include personal income tax (local and federal), insurance, social security, medicare, 401k, and any other fees you might incur.

At the top of your paycheck you would see your 'advertised' earnings for that period and then at the bottom you have your take home net pay. Depending on your location, you loose around 20% of your 'advertised' pay to taxes and other mandatory things. If you contribute to a 401K you loose even more.

Why would it include personal income tax? Your tax situation could be different than mine (single vs. married, deductions AKA children, etc.) it would be impossible for the employer to know what you personal income tax is going to be. Insurance? if your spouse has access to a better insurance policy you might opt not to participate in your employers plan so why would they "include" that? Social security and medicare AKA FICA? they pay half, you pay half and the rate is easy to find (7.65%, except this year) 401k? well you are paying yourself there, it's still your money.

You fill out a form when you begin employment that specifies how much to withhold: http://www.irs.gov/pub/irs-pdf/fw4.pdf

Yes, but that is typically after you have accepted the job, not before.

yes, but read the question above.

In Europe some of those things are paid through taxes and some are not. To make a reasonable comparison you need to know what's included each system and how the fees are arranged.

I know that salaries in Canada are advertised in what you would make before taxes/CPP/EI, which usually come out to 17-26% less for most mere mortals.

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