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Comment by rglullis | Hacker News Reader

Again, what part of the world are you on?

Even in Berlin, with all the talks about it becoming a top destination for tech people, I'm yet to hear any 6-figures offer. Even the blockchain companies that were flush with cash were paying 90-95k€ to their top people, maybe a 10-20% performance bonus. Mind you, we are talking about Germany where the tax is ~42% of your income at this bracket if you are single.

When I was freelancing, pay was higher, but my best year hit around 130k€ net income, and that only because I deferred a lot of it and got an accountant that advised me to put as much as possible into a private pension fund to have a bigger tax deduction. If I wanted to have that cash in hand, I would've ended up with maybe 80k€?

Yes, cost of living is lower (though rapidly rising, and it is not a post-pandemic thing) and there is plenty of social welfare benefits. Especially after having kids, I wouldn't go to the US for a $200k/year job. But to think that this kind of compensation is par for the course shows a huge disconnect from the reality in the rest of world.

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I've personally worked with people who I know made 6-figures of total comp in Germany. Checking the relatively-new https://techpays.eu/, there are plenty of 6-figure entries for Germany. I'm not saying this means it's the norm, just that it's achievable for people whose posts make it to the front page of Hacker News.

You mentioned taxes. When people talk about comp in the US, we aren't taking out taxes. Effective tax rate (federal+state+fica) for a single individual making $200k of salary+bonus is ~30% here. That would turn $200k into $140k take home.

I think the parent above you is talking without taking out taxes. For 90K, you would pay (taxes+health insurance + pension+unemployment benefit) ~42%. So at the end, what you see in your account ~52K/year. This is as a single person. For family/kids, you can make little bit more.

30% is just federal. State can add between 0%-10% on top of that. So depending on where you live it may be very close to Germany. Then there's medical insurance, which is usually paid out of a portion of your paycheck. It's optional, but it would be a poor risk/reward tradeoff for even for a young healthy person to not at least have a high deductable plan, which will be another 3-4% of $200k.

I'll mention this not to disagree with your overall point, but because I've seen it be a source of confusion for some people. In the US federal income tax system, the marginal tax rate varies depending on the tax bracket each dollar of your income falls in.

That is, someone making $200k would pay 10% on their first $9,950 of income, 12% on their next $30,575 of income, and so on. They'd only pay a rate above 30% for the last $35,075 of their income.

You can plug in numbers and locations at https://smartasset.com/taxes/income-taxes to get a sense of how this plays out.

In Germany you may want to consider that the employer pays another approx. 20% on top of your salary, by law. So if your salary is EUR 100k, your employer actually pays 120k to keep you on board. Money that your employer could otherwise add to your payout as he’s paying all off it anyway _for_ you, right?

Now with 42% income tax of a 100k salary, there’s a net of 58k arriving at your bank account over a year.

Given that your employer pays 120k, you have actually “lost” 62k (not just 42k) to the government and insurances. With that maths, the _net_ tax (incl. insurances) is actually close to 52%. That is a whopping net +10% taxes from the math in the parent post.

> "Now with 42% income tax of a 100k salary, there’s a net of 58k arriving at your bank account over a year."

Oh boy, that's one of those misconceptions I'm really sick of. "The tax is so high, I pay almost half of my salary to the greedy state". No, you certainly don't! And if everyone please spent 5 minutes to understand the difference between the effective tax rate and the marginal tax rate, we'd finally get rid of that pointless discussion. With a 100k salary, there is ~75k net arriving at you bank account, if you're married. If you take care of children, it's even more.

https://de.wikipedia.org/wiki/Einkommensteuer_(Deutschland)#...

I live in Norway and pay an 34% effective tax. The highest in the world at my salary level. I don't complain, because tax money is used for an excellent education system, including the best libraries I've ever been to, and not least for my own ~50k€ PhD salary that every single PhD student in town receives. Meanwhile my high school in Germany didn't even have soap dispensers in the bathrooms because highly skilled hacker news readers don't bother to learn the basics of their tax system before they go and vote for corrupt privatization parties that promise lower taxes and cut back public investments.

> "Money that your employer could otherwise add to your payout..." Also, please don't mix up taxes, insurance and pension. If you'd prefer to pay for medical expenses yourself, do the math. You don't want that, especially when you have a family.

This is also one of my pet peeves. I keep thinking “people do understand progressive taxation, right?”, but in discussions like this, I realize: no, maybe they don’t. If you’re a single filer who makes $180K in the US in 2022, you’re in the 32% tax bracket. But your effective federal tax rate is just over 21% — and that’s assuming you’re only taking the standard deduction.

Are you sure that they're mistaking marginal tax rates for effective tax rates, rather than you mistaking gripes about taxes in general for gripes about federal income tax in particular? In my state, a single filer making $180k pays 34.6% effective tax on income - 19.1% federal income, 6.4% FICA, and 9.2% state income tax. (And maybe 4% more from property taxes if they own a house in a major city, although that's a somewhat different subject.)

This is not to say that rich people are actually poor because of taxes, obviously, but it seems more likely that people would talk about these things in a somewhat inaccurate way than that they would be totally wrong about what they actually pay.

On the contrary, the OP has got it right (perhaps accidentally), and you're the one confusing things.

You're correct that taxes, insurance, and pensions are different things, but in the context of "what amount of money arrives in your bank account at the end of the month", I find it a distinction without a difference.

Plugging in a 100k brutto salary into https://www.bbx.de/brutto-netto-rechner/, yields 57k of take home pay for the year, which is within spitting distance of the 58k figure quoted by OP.

The _income taxes_ of it add to up to "only" ~29k, sure.

And your example of getting 75k on 100k of income if you're married only applies if your spouse doesn't work; which; while I'm sure is a commonly occurring situation, it feels disingenuous to not specify that when mentioning it.

Don't get me wrong — having immigrated from Poland, I am having exactly the same feelings you do towards paying high taxes in Norway — I'm more than happy to pay those, and I see a _world_ of difference in how that that money is used; but we can make _those_ arguments without downplaying the actual amount of money that goes to the State.

I explicitly said “tax (including insurances)” to make it clear that for a simple calculations of the money that doesn’t reach your bank account. Now in Germany the percentage of income that goes to health insurance is dictated by government, currently around 15%. While insurance is not tax, i’d dictated by government how much to pay, makes no big difference to a tax either.

This is wrong, getting ~58k in your bank account from a 100k salary for a single is certainly what you can expect. The 75k you mention will only happen if your spouse doesn't work at all, a rather disingenuous framing.

If you're happy paying high taxes, you shouldn't feel the need to hide the real numbers (even if you're hiding by omission).

Europe is a very different system. Suppose I work freelance in New York City, so I make $20,000 a month.

$8,000 -- city, state, and federal taxes take 40%

$3,500 -- rent

$1,500 -- health insurance

$4,000 -- care for my elderly mom

total: $17,000

In other words, it is easy to make $20,000 a month in New York City and feel like you are barely surviving. I'm grateful I don't have children, as it allows me to take care of my mom. If I did have kids, then some very painful choices would have to be made about care for my mom.

Europe is simply a different system.

Most of Europe sees you with the same tax rates of roughly 40%, if not higher. Even after rent, tax, and health insurance, your leftover pay is more than a mid to senior engineer will _gross_ before tax and rent in most major European cities. The real outlier there is the care cost. if you didn't have that, you would have 7/month left over (and even after that, you have $36k/year) - that's more than a mid level engineer will gross in the UK.

Why are European engineers paid so low?

Despite a generally higher cost of living in Europe, salaries across the board are lower. A £100k salary in the UK puts you in the 96th percentile for example. It's not just engineers, it's everyone.

This is probably a controversial thing to say, but based on your and other comments in this thread, it seems like the social safety nets aren't worth the lower salaries. Or are they? It seems like non-Americans in this thread are unhappy that their ceilings are lower.

The Welfare State is meant to be a stabilizing force to avoid social unrest and to guarantee that the elites can enjoy their power/status but at least not destroy the fabric of society completely. The Welfare State is not meant to be "worth it". You can not think of it as something that has a ROI, because it is not an investment. It is insurance.

With that said: my net salary may be less than half of my American counterpart, but my quality of life is certainly better here. At the moment, I would be more interested in getting "German" salaries but to be able to live in Southern Europe than to get US-salaries in Germany.

But it's precisely the welfare state that brought my former country to the brink, when a massive influx of refugees put so much strain on public services, that lifelong citizens were having to wait months for critical care and stirring up (understandable) angry, nationalist sentiment. And there are many such examples across Europe at different times.

The other thing the safety net doesn't seem to provide is happiness, much to the chagrin of American democratic socialists. Overtime, unchecked depression results in the crumbling of society as well.

Milton Friedman said "You can have Welfare State, or you can have Open Borders. You can not have both".

What you are describing is one of my many objections to the EU.

> The Welfare State is meant to be a stabilizing force to avoid social unrest and to guarantee that the elites can enjoy their power/status

Those are your beliefs, not facts.

The Welfare State exists because some politicians genuinely care about people and want to help those who fall ill or have a divorce and no where to live or lose their job etc.

Not all politicians are calculating sociopaths.

> You can not think of it as something that has a ROI,

Say that to the people in the US dying from cancer because they cannot afford the expensive treatments. Or a researcher 70+ years old, but who cannot retire (although he's 70+), because then he couldn't afford his medications.

Or youths without money to study at University.

Quite odd beliefs and ideas you've ended up with, from my perspective.

> help those who fall ill or have a divorce and no where to live or lose their job etc.

In other words: insurance.

It seems expected to me that the welfare state is not going to be worth it for the top quintile? That's kind of how redistribution of wealth works?

>Despite a generally higher cost of living in Europe, salaries across the board are lower.

I was more responding to that idea: everything is more expensive, and everyone is making a lot less (not just the top quintile). Seems like a bad trade, but that's just my $0.02

Except everything isn't more expensive. For example rent. Also, everyone can go see a doctor and pay nothing (not just the top quintile). All of this is if course simplified, but just to add another pair of cents.

And groceries. I was _shocked_ at how expensive buying fresh food was in the US, and funnily enough, the most desired food was imported from the EU and was far more expensive. Here's a great comparison - aged parmesan cheese from the supermarket [0] [1] is $11/lb here, or $17+tax in the US. This is the same for a huge amount of ingredients too; cheeses, meats + veg. I helped a friend do his grocery shopping in a trader joes, by my best guess it was twice the price of my shop in Sainsbury's (a middle-of-the-road supermarket)

[0] https://www.traderjoes.com/home/products/pdp/parmigiano-regg... [1] https://www.sainsburys.co.uk/gol-ui/product/sainsburys-parmi...

> aged parmesan cheese from the supermarket [0] [1] is $11/lb here, or $17+tax in the US.

No shit, it’s literally an import from Europe. It’s like comparing California wine prices in Las Vegas vs in Sydney.

> veg. I helped a friend do his grocery shopping in a trader joes

Trader Joe’s is not a grocery store for middle class people. It’s a high end convenience store. Unless you’re really well-off, you only buy a few select items from there occasionally.

If you want to see prices the working/middle class pays, look at the prices at Walmart.

No. Imported wine is quite often cheaper than domestic ones in the US.

Also, you want to compare the quality of products and you can not base yourself on Walmart for that. The average American eats horribly compared to the European counterpart.

> Imported wine is quite often cheaper than domestic ones in the US.

Not anything of quality. Most good wines in California that aren’t nasty blends are California wines at $10/bottle range.

> want to compare the quality of products and you can not base yourself on Walmart for that.

Yes you can. The milks, meats, vegetables, and fruits are fine quality-wise. “Walmart == bad quality” is a meme based on their cheap home goods. The food is fine.

> The average American eats horribly compared to the European counterpart.

Having lives in both places (uk, France, and Italy), the supermarkets in the US are vastly superior. The only reason an American would eat worse is if they chose frozen meals, snacks, or just straight up fast food over what’s in the grocery store.

European food costs more and is of more limited variety. The quality is consistently decent though.

Given we're talking about why salaries are higher in the US, i think it's fair to point out the comparison of items that are possible to buy in a normal supermarket here. I searched for parmesan in Walmart and could only buy an entire wheel for ~$26/lb.

The people who I'm comparing myself to in the US strive to buy imported European food, so that's the comparison I'm going to end up making.

Even basic things like fresh vegetables and fresh meat far more expensive than they are in supermarkets here.

> The people who I'm comparing myself to in the US strive to buy imported European food

That’s a dumb comparison though. Americans generally eat American cuisine. It’s just as dumb as comparing to imported Chinese food.

And many of us who exist in the top quintile are perfectly happy with that, knowing that we are net contributors to a better place to live for others.

Do you think they should be forced to stay? Suppose it was easy for all of those high performers (who wanted to leave) to move to the USA. You would lose out on that extra tax revenue, and it would undermine the redistribution scheme.

You don't need to suppose. It already happened recently in France.

When the Socialist government increased the marginal tax rate to 70% for millionaires, there was a huge capital flight and they lost revenue.

No there was not a huge capital flight. This have been aborted solely because of threats from the ultra richs in France.

Moreover, this law was actually pretty fair : it was applied on marginal annual revenue over 1M so it meant that you had to be actually a multi-millionaire to be concerned.

No, France didn't threaten to force high earners to leave, they tried to enforce a higher tax on the absolute absolute highest earners in the country. Even making 3-400k you would have been unlikely to have been affected by this. Funnily enough, you'll also notice the bluster was about people leaving to other EU states and not to the US.

Also, to call the French government socialist I'd completely laughable. Maybe in comparison to somewhere like Hungary, sure.

I am not talking about Macron, I am talking about Hollande, which is (was?) the leader of the Socialist Party.

And I may be wrong about it, but I think that he increased taxes all across high-income brackets, not just the absolute top. And that certainly leads to a game-theoretical equilibrium.

To me (and I assume others) the following calculation comes into play:

- for what I pay in taxes, do I get a reasonably good public services back? I am not saying that I want to account for every euro, but I don't want to feel like I did in Brazil, paying 38% effective tax rate and receiving virtually nothing back in public services and still having to pay again for private healthcare, private education for the kids, etc...

- how much money do I have left in the bank after I paid all my expenses and taxes, i.e, what is my saving power?

If I had a 250k€/year brutto income, it wouldn't be too difficult to show that I would be better off in Switzerland (higher CoL, but way lower tax rate) or in Greece (similar tax rates, less return on public services, but way lower CoL). If Germany decided to increase the effective tax rate, this threshold would go down significantly.

Thats a big stretch and a huge thought experiment, and way out of scope of what we're talking about (but no I don't). Any sort of systemic change on that scale would make me reevaluate where I live though - if for example I lived on a country that flip flopped between right wing and centrist every four years I would be pretty uncomfortable with that.

> Suppose it was easy for all of those high performers

A bit of a nitpick, but an important one. High performers and high earners are not the same thing.

I'm an engineer living in the UK who likely _could_ move to the US and take a larger salary, but actively choose not to pursue that option. As I've said many times on this site, it's likely that after paying rent for an apartment in SF, health insurance, and all my living costs, my pay after that would be more than the gross pay of an engineer in most parts of the UK, I still decide not to move for a few reasons.

The first question I ask is what would I do with the extra money. I don't _want_ to retire at 40 to pursue my dreams, I like what I'm doing and the pace that I'm doing it at. If I had the choice, I would choose to be where I am doing what I am doing. Why would I move somewhere else for 10 years to make money only to come back and do what I'm doing right now? [0]. I have friends, family, a life here. I don't want to uproot all of that (I have no kids and have already moved country, I don't want to do it again unless it would improve my quality of life). My partner would likely need to find something to do, as it's unlikely she would find a company willing to sponsor a visa for her line of work. Health care being tied to my place of employment is a total nightmare - I can only imagine what happens if I'm in a car accident and I end up at the wrong hospital, or treated by an anaesthetist that is out of network. It's also not just me, the injustice of it boils my blood, and I don't really want to contribute to that system.

I own a car, but it spends 5 days a week parked outside my door, and is only used for "adventuring". The idea of movin somewhere to live in a large house that I have to drive for groceries, drive to the doctors, drive to the bar after work etc, is not appealing to me.

The annual leave situation is commonly far superior in Europe - my current job has 40 days PTO per year, and I take them all. My previous job, the American employees had unlimited PTO, and I don't think my boss ever took anything longer than a long weekend in the 3 years I worked there. It also seemed many of them were banking on a "European trip of a lifetime" with their families, which I can do on the train from where I live (also I live in one of those bucket list countries to boot).

> It seems like non-Americans in this thread are unhappy that their ceilings are lower.

Grass is always greener. The Americans in this thread are complaining that it's so much more expensive to live in the US and are unhappy that it costs so much. Of course it seems the "ideal" situation is work for an American company, on an American salary and live in the UK, but having worked with Americans for the last decade, that has it's tradeoffs too - my workday starts at 10am and ends at 7pm (whereas my partner works 9-5). The "culture" of American work spills across, etc.

[0] https://www.becomingminimalist.com/recognizing-happiness/ - it's not a perfect comparison, but the point stands!

> seems like non-Americans in this thread are unhappy that their ceilings are lower.

Maybe a few men here who would want to maximize their income, save for the future? Seems like a good idea,

Still, they're a bubble and not representative of people in general.

Have a look, happiest countries:

https://www.google.com/search?q=happiest+countries

Employer social security contributions is a big one. In the USA it's around 5-10% of a worker's salary. In Spain it's around 40%.

The gross salary a worker sees is after these, so not representative of what it actually costs to hire them.

I live in a country with 5 million people. Any software targeting the local market automatically has much less potential for growth than in the US with its 330 mln, so the work of making it has comparably less economic value. I'd say that's at least part of the explanation.

If this a realistic representation of your situation, I have a tiny piece of unsolicited advice: open a retirement account like a SEP IRA. You can contribute up to 25% of your salary in there, and avoid those steep NY/NYC taxes. That can save you a truckload of money.

And I know NYC rent is steep. I lived there as of 6 months ago, and spent a hell of a lot less on rent, and had an apartment no reasonable person would describe as "barely survivable"—it was a beautiful place in Downtown Brooklyn. Rents have increased a bit, as they have everywhere, this past year. But $3,500/month is.. more than ~1/3 of NYC residents take home a month total.

Unless you are assuming worst case (ACA legal max out of pocket) you are vastly overpaying for health insurance. Average in NY is under $500.

https://www.ehealthinsurance.com/new-york-health-insurance

Also, you might look into state funded elderly care support. Saved my family thousands a month for my dad in assisted living in FL.

I am pretty sure they're saying $200k before taxes. It's equivalent wage in Germany would be 150k€, as the employer has to pay about 21% on top of the salary for social securities.

I agree that these numbers always sound outlandish (I'm from Germany too), but they do seem to be true. Do keep in mind that while the wage gap is bad here, its several times worse in the USA.

No 200K doesn't include say things like 401K contribution or health contribution from employer's side. So if you are going to top German salary with employer contribution, you need to do the same with USA salary.

I know it is pre-tax. I also know that there are benefits in Europe that simply do not exist in the US - minimum of 25 days of actual vacation and not that "you may travel for a few days, but you are still on-call" thing that people in the US call "holidays", Elternzeit, etc...

But still, no one would claim that is easy to get a 90k€ salary in Germany, or that "if you are not asking that much then what are you doing". For 150, you have to be way above average or you have to running your own business.

You have more then 25 days of "real" vacation at all the major tech companies in the USA. Pretty much all the issues that people mention in the USA (healthcare, vacation, maternity leave, etc) are non issues for employees in our industry.

The only true risk is becoming unemployable for some reason and losing your job. USA tech might fly higher but can crater way lower.

Is there any company in the US where parents can take (collectively) up to 14 months of leave while still receiving 2/3 of their salary?

More importantly: do people actually take it?

Or 49 weeks at 100%, like here in Norway.

My teammate took 6 months off paid for her maternity leave but in general I can't really say. It's not a benefit I've looked much into; I'm male and don't plan on having kids this decade.

yeah as another tech worker in Berlin, reading these salaries on consistent basis is kinda depressing. The 70-80K is like a starting tech salaries in larger part of US. Here in Berlin you have to toll for multiple years and then before you know you have hit the 90-100K ceiling.

Just compare Berlin with any big American US city, Berliner's PPP is still quite low. This is after the salary "boom" in Berlin.

COVID and companies being more open to hire remotely has partially fixed that, I know of multiple people making 130kE+ in Berlin now, working remotely, with full benefits of being an employee of a German GmbH.

I can give you some details via DM if you want.

yeah I won't say no :) Thank you!

Share them with me too! Thanks.

Straight out of University, I started in the $70-80k range in the US almost 20 years ago outside of SV (but still an expensive area).

To clarify, 42% of every euro earned above 57919€. Weighted average tax rate is still "just" 27% when earning 100.000€

Depends if you count the cost of statutory health insurance as a de-facto tax, in which case it's closer to 40% again. There's a bit more nuance to this (there's a contribution cap), but if you ever read that taxes in Germany are lower than 40% odds are the speaker is leaving out health insurance.

Aside: The neat thing with the statutory health insurance is of course that they have to pay for your treatment, no matter how fucked up your situation is or how little money you have - but if you're healthy and well-paid it's poor value.

Parent was talking about 42% tax rate, so taxes only. Yes you get deducted more for social services, health insurance, pensions and unemployment insurance push this up to 46% going to the government services when you earn 100k.

> Again, what part of the world are you on?

Doesn't matter. There's plenty of remote (as in worldwide) offers with these figures now.

Source: heavily interviewed last July while living in Moscow, Russia. Got several offers in that ballpark, accepted one from "Who's hiring" HN thread. Not a rockstar, just a regular developer.

Congrats!

But unless your story can come with many other examples, it should not be counted as representative of any "average" situation from the market at large.

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