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Comment by WrtCdEvrydy | Hacker News Reader

The worst bit about this is that in Europe, employers don't have to pay for insurance versus the US side yet we still find ways to dick over our European hires by having them come in very low.

I've worked at places making 150k USD where the most knowledgeable people I worked with were making 90k GBP in Europe. We lost a lot of people during the great exodus of inflation at the beginning of the "Ukraine training exercises".

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> The worst bit about this is that in Europe, employers don't have to pay for insurance versus the US side yet we still find ways to dick over our European hires by having them come in very low.

Pardon ? In France the net is about 50% of the super gross paid by the company, much of it social security. And that's before you pay the bloody income tax.

>in Europe, employers don't have to pay for insurance

They do in some cases. In France and Austria (I think Germany and others too), the gross salary you negociate to get is actually even higher for the employer as there is a tax the employer must pay on top of that to cover his side of the social contributions. I wish this would be more transparent.

What you said applies to places like Denmark, Switzerland, where the employer has to pay no extra taxes.

That happens in America as well, and I don't think people are well aware of it - the employer is required to pay unemployment insurance on top of the salary they pay to each employee. If you collect unemployment, this is where that money comes from.

Usually employees in Germany need to calculate with 1.15 to 1.2x of the salary they negotiate with the employee. The employer needs to match social contributions (retirement, unemployment, health insurance)

I don't know about Denmark or Switzerland, but in the Netherlands employers certainly have to pay premiums for social (mainly unemployment and disability) insurance.

Ah sorry then. I thought otherwise.

Here's a list how much employers pay for insurance:

https://blog.eurodev.com/social-security-tax-rates-employers....

Is 45% employer tax for France correct? Ie employer pays €181k for an employee to earn €100k, who then pays 40% income tax and is left with €60k?

You are correct for the first number (181k to 100k), but not the second one, as the income tax is calculated by brackets defined in adavance[1]. A single person with no family winning 100k would have to pay 23k, leaving them with 77k. This is more than twice the average in France[2] and nearly thrice the median salary [3].

[1] : https://www.service-public.fr/particuliers/vosdroits/F1419 [2] : https://www.insee.fr/fr/statistiques/serie/010752333 [3] : https://www.insee.fr/fr/statistiques/6436313#titre-bloc-9

Thanks, I calculated 26.7k leaving 73k, so employee keeps just over 40% of what the employer pays.

If you look at income tax in high income tax states the income tax looks similar, so its the payroll taxes and VAT that really is the difference between France and US.

I may be wrong, but I think there is also a cultural difference: everything here revolves around your gross income.

You'll hear "I win 100k a year", not "I win 181k a year". During hiring, you negotiate on the 100k number. Your contract mention this number. In the end, if there is a tax raise on the company part, they have to maintain your salary to the same level, even if it ends up costing them more than before.

That'd be also why US salaries seem so high from the outside, but are less impressive once your factor this in.

This is exactly how it works in the US. Salaries here are listed and negotiated around the gross amount that the employer pays to the employee, without any regard for the employer taxes. The difference is that employer-side taxes on that salary are about ~8% (and most of this is capped at the first $147k), not 45%.

Sadly, US salaries don’t just seem much higher than Europe: they are much higher. Take home pay after all taxes for a senior engineer at a large public tech company can commonly be $250k+ per year, in addition to benefits like health insurance and 6+ weeks off once vacation and holidays are taken into account.

The employee doesn't pay 40% income tax on a 100k salary.

Income tax in France is progressive. You slice your income in brackets, and for each there's a tax rate. Your average tax rate is the average of your brackets.

The highest bracket in France is 45% for income above 160k, so for your total income tax rate to be about 40%, it would mean that you make an absolute shitload of money.

Income tax brackets, French, but the table is clear enough: https://www.service-public.fr/particuliers/vosdroits/F1419

Maybe someone from France can confirm it, but in Hungary, the 17% is just part of the whole tax. Here's a much better site explaining it: https://hu.talent.com/en/tax-calculator?salary=100000&from=m...

Not French, but it doesn't sound that weird. I think my grandmother (an accountant) once told me that the general principle is that an employee should be worth at least three times their salary for the employment to make sense financially.

At least here in ireland, the legal mandated contribution to the public health system is called Employer's PRSI, and usually most big tech employers will pay for private health insurance also (albeit private health insurance is priced much more reasonably here, due to needing to compete with the public system with its capped patient costs).

In the UK (still part of the European geographical area despite the Brexit foot shooting), employers pay a "National Insurance" contribution over and above the employee's salary i.e. it's not deducted from your salary.

Employees also have their own national insurance contribution which is deducted along with income tax.

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