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Comment by hef19898 | Hacker News Reader

hef19898

German net includes unemployment, social security and health care, among other things (did the stat include church tax or not?), not sure about the California thing. That being said, one million in mortgage buys you one hell of an house in Berlin! And mortgage payments can be tax deductible to an extent as well.

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The FICA rate above for California is the social security/medicare tax. An equal portion is paid by the employee and employer. Unemployment is paid by the employer in California. Mortgage tax deductions are a lot more limited since the 2018 tax reforms. Health care is the big wild card since better employers might subsidize 80-100% of the premium while worse one hardly anything. The Obamacare ACA plans can provide subsidized health insurance for lower income workers but the subsidies taper off at a fairly low income given how much you need to survive in California.

So overall pretty much on par then. Higher net salaries in California are offset by better / more predictable healthcare costs in Germany.

Which leaves base pay, I assume the 200k in Berlin were choosen to make the comparison easier. On the surface, lower base pay in Berlin is offset by lower living costs, especially housing (I am aware Berlin is getting more expensive, it is still far from SV so).

Just shows that money isn't everything.

In California (and pretty sure this is standard across the USA), unemployment insurance is paid by the employer so doesn't come out of your compensation.

The calculator I used also included payments for social security and medicare contributions, which you would use if you eventually fell below security security income bracket (knock on wood) or if you need medical as a senior (I believe age 65+)

For other health coverage, that is paid for by the employer so also wouldn't come out of your compensation.

Of course it comes out of your compensation in the end. It just doesn't come out of the "headline" compensation number you see.

Which is fine if you're comparing equivalent "headline" numbers. But for other purposes the ratio of take-home pay to what the employer has to pay out (so including all the employer-side taxes) might be more relevant in terms of determining your likelihood of receiving a certain level of take-home pay.

We're comparing headline numbers, not economic cost. There are so many other economic costs to hiring someone that it would be almost impossible to compare. The most blaring one of course is healthcare cost. In the US, the employer bears this cost which is enormous (as healthcare is astronomically expensive in the US) and by your argument this would reduce "your likelihood of receiving a certain level of take-home pay"

And yet incomes are much higher in the US than in Germany.

I think headline numbers are the only useful thing to compare here.

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