4 ms·

Maybe I'm wrong but the salary an American gets is the whole package and they have to figure out their income tax, social security, etc. In Europe a good part o

Maybe I'm wrong but the salary an American gets is the whole package and they have to figure out their income tax, social security, etc. In Europe a good part of what the company pays for an employee is "hidden" but can account to 50%-100% of the gross salary you receive. So if you're getting 50k company is really paying 75k.

cianmm 10y ago
This is definitely not the case in Ireland, and I would imagine the rest of Europe. While there is the odd tax that an Employeer might need to pay on having an employee (probably benefits related), if a job says it pays, say, €60k, that's €60k pre tax. Tax is then deducted from that and you get your payslip which displays both pre and post tax numbers, and you receive the post tax amount.
- jonasvp 10y ago
  I don't know about Ireland but that's definitely not true for Germany. While the amount usually talked about in negotiations is pre-tax (since people have differing tax rates due to children, marriage, etc.), there's a significant difference from there to the actual cost to the company. In my company we pay about 25% on top for social security, worker's benefits, health insurance, etc. This is without any company-provided benefits such as trainings, conference allowances, holidays, etc.
  - m3Lith 10y ago
    Yeah, similar here in Lithuania. You can say there's three salaries a person can be valued at. There's the official one which you would declare (pre-tax, or "on-paper"), the actual you get (post-tax, or "hands-on") and the one that shows your actual cost to the employer (pre-tax salary + 31% additional tax).
to3m 10y ago
Same in the UK - the amount quoted is before any tax is deducted. It is usual for the employer to deduct the income taxes themselves, though... businesses in the UK bear some tax collection responsibilities, of which this is one. On top of the quoted figure, there is an equivalent of employer's FICA contributions. The rate is around 12.5%. Anyway, this is treated separately and you don't generally hear about it; employers factor it into their calculations before deciding on a salary range. Exception: it's somewhat common for public sector employees to have the employer's contribution quoted on their payslips, perhaps to make them feel like they're paying into the system.
jdminhbg 10y ago
The "all-in" cost of an employee is also much higher than the nominal rate in the US. The employer pays ~8% in social security/medicare taxes, unemployment insurance, most or all of the health insurance premium, etc.
shados 10y ago
The hidden cost of an American employee is probably even higher. Since the company picks up most of the cost of health insurance, its a huge chunk of change right there. 50%~ overhead sounds about right.

cianmm 10y ago

This is definitely not the case in Ireland, and I would imagine the rest of Europe. While there is the odd tax that an Employeer might need to pay on having an employee (probably benefits related), if a job says it pays, say, €60k, that's €60k pre tax. Tax is then deducted from that and you get your payslip which displays both pre and post tax numbers, and you receive the post tax amount.

jonasvp 10y ago
I don't know about Ireland but that's definitely not true for Germany. While the amount usually talked about in negotiations is pre-tax (since people have differing tax rates due to children, marriage, etc.), there's a significant difference from there to the actual cost to the company. In my company we pay about 25% on top for social security, worker's benefits, health insurance, etc. This is without any company-provided benefits such as trainings, conference allowances, holidays, etc.
- m3Lith 10y ago
  Yeah, similar here in Lithuania. You can say there's three salaries a person can be valued at. There's the official one which you would declare (pre-tax, or "on-paper"), the actual you get (post-tax, or "hands-on") and the one that shows your actual cost to the employer (pre-tax salary + 31% additional tax).

to3m 10y ago

Same in the UK - the amount quoted is before any tax is deducted. It is usual for the employer to deduct the income taxes themselves, though... businesses in the UK bear some tax collection responsibilities, of which this is one. On top of the quoted figure, there is an equivalent of employer's FICA contributions. The rate is around 12.5%. Anyway, this is treated separately and you don't generally hear about it; employers factor it into their calculations before deciding on a salary range. Exception: it's somewhat common for public sector employees to have the employer's contribution quoted on their payslips, perhaps to make them feel like they're paying into the system.

jdminhbg 10y ago

The "all-in" cost of an employee is also much higher than the nominal rate in the US. The employer pays ~8% in social security/medicare taxes, unemployment insurance, most or all of the health insurance premium, etc.

shados 10y ago

The hidden cost of an American employee is probably even higher. Since the company picks up most of the cost of health insurance, its a huge chunk of change right there. 50%~ overhead sounds about right.