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It can be hard to compare actual tax rates as you have to also account for all the payroll taxes. For instance in France for a Software Engineer you would expec

by Xixi 8y ago

It can be hard to compare actual tax rates as you have to also account for all the payroll taxes. For instance in France for a Software Engineer you would expect about 40~45% payroll taxes [1], and you will still pay income taxes (somewhere between 20% and 40%) on what remains [2]. They go towards different budgets (Social Security and State), so it makes sense that they are collected separately. I don't know how it is in Germany or Italy. [1] Payroll taxes go towards the Social Security budget, which covers health insurance, retirement pensions, unemployment insurance, etc. [2] Income taxes (and VAT) go towards the state budget, which covers debt interests payments, education, justice, police, military, etc.

asdfasgasdgasdg 8y ago
> They go towards different budgets (Social Security and State), so it makes sense that they are collected separately. Kinda beside the point, but that does not actually make sense. My home budget and car budget are different, but I collect them from the same source. I don't get a different job to pay for my car. Many countries pay for social security out of income taxes, or pay for general budget stuff out of payroll taxes. I don't know what the real reason behind payroll taxes is. Probably it's mostly historical, as opposed to something you would reimplement if you were doing it from scratch today. But it is most definitely not simply because those taxes go into a different budget.
jcelerier 8y ago
> They go towards different budgets (Social Security and State), so it makes sense that they are collected separately until next january (finally!)
woodpanel 8y ago
(fictional, simplified) Example for a Software Engineer based in Germany [1]: Gross income: 100.000 EUR / year [2] ------------------------- TAXES - Income tax (28.600 EUR) - "solidarity premium" (2.300 EUR) - church tax (1.600 € - cumpolsory until you leave the curch) SOCIAL SECURITY (compulsory) - unemployed insurance (1.200 EUR) - pension insurance (7.300 EUR) - health insurance (4.500 EUR) - long term care (800 EUR) ------------------------- Net income: 53.700 EUR Add to that what is often called gross-gross-income: Hidden from your paycheck is that social security has to be paid by your employer as well (so in this case amounts to 113.080 EUR which makes for a combined rate of 53%) [3] [1] Hypothetical young graduate from Italy/Spain/France: Unmarried, no children and catholic [2] 100k is not the typical pay for freshly graduated-from-school devs in Germany, but an attainable income goal after some working years nonetheless [3] some exemptions in that employer-part, its a bit less than the employee-part
- deleted 8y ago
  [deleted]
- mkio 8y ago
  100k is completely unrealistic for a German software engineer, especially after only a couple of years.
  - chokma 8y ago
    70-80K € seems attainable just judging by the recruiters' numbers, but most offers of that kind come with strings attached - like moving to one of the most expensive cities (thus being equal to a 50K job in a smaller city) or being a traveling consultant.
  - jashmatthews 8y ago
    That's roughly what Amazon pays SDE3 in Berlin including stock grants and Google pays similarly in Munich. Smaller companies in Berlin like SoundCloud, ThinkCell, and Simplaex offer €100k+ for engineers with the experience they need. Even startup salaries are nudging €75k on AngelList and StackOverflow Jobs.
- expertentipp 8y ago
  In most Central European countries the total salary cost/net salary easily approaches or even exceedes 200% for any software-related profession. Employment contract is a racket contribution-wise and what’s worse, there is no better option (please don’t suggest contracting or freelancing).
  - oneplane 8y ago
    Same here (western Europe) but aside from a little complaining, nobody really wants it gone as it has too many benefits for everyone as whole. And as long as you 'know' the true cost of having an employee you can take that into account which makes it more of a math problem and less of a money problem.
- expathacker 8y ago
eloisant 8y ago
This will become easier to compare as income tax will soon be taken directly from the payroll like most other countries. However it's important to note that many people don't actually pay that much income tax in France, or at least nowhere near the 20% to 40% number you're giving. If you're married it depends on your spouse revenue, whether you have kids or not (especially between 0 an 3 yo because you get a tax credit on daycare, etc...) I think the biggest difference between a Software Engineer in France and UK or Germany is not the taxes, but that the gross salary would usually be much lower in France.

by Xixi 8y ago

asdfasgasdgasdg 8y ago

> They go towards different budgets (Social Security and State), so it makes sense that they are collected separately. Kinda beside the point, but that does not actually make sense. My home budget and car budget are different, but I collect them from the same source. I don't get a different job to pay for my car. Many countries pay for social security out of income taxes, or pay for general budget stuff out of payroll taxes. I don't know what the real reason behind payroll taxes is. Probably it's mostly historical, as opposed to something you would reimplement if you were doing it from scratch today. But it is most definitely not simply because those taxes go into a different budget.

jcelerier 8y ago

> They go towards different budgets (Social Security and State), so it makes sense that they are collected separately until next january (finally!)

woodpanel 8y ago

(fictional, simplified) Example for a Software Engineer based in Germany [1]: Gross income: 100.000 EUR / year [2] ------------------------- TAXES - Income tax (28.600 EUR) - "solidarity premium" (2.300 EUR) - church tax (1.600 € - cumpolsory until you leave the curch) SOCIAL SECURITY (compulsory) - unemployed insurance (1.200 EUR) - pension insurance (7.300 EUR) - health insurance (4.500 EUR) - long term care (800 EUR) ------------------------- Net income: 53.700 EUR Add to that what is often called gross-gross-income: Hidden from your paycheck is that social security has to be paid by your employer as well (so in this case amounts to 113.080 EUR which makes for a combined rate of 53%) [3] [1] Hypothetical young graduate from Italy/Spain/France: Unmarried, no children and catholic [2] 100k is not the typical pay for freshly graduated-from-school devs in Germany, but an attainable income goal after some working years nonetheless [3] some exemptions in that employer-part, its a bit less than the employee-part

deleted 8y ago
[deleted]
mkio 8y ago
100k is completely unrealistic for a German software engineer, especially after only a couple of years.
- chokma 8y ago
  70-80K € seems attainable just judging by the recruiters' numbers, but most offers of that kind come with strings attached - like moving to one of the most expensive cities (thus being equal to a 50K job in a smaller city) or being a traveling consultant.
- jashmatthews 8y ago
  That's roughly what Amazon pays SDE3 in Berlin including stock grants and Google pays similarly in Munich. Smaller companies in Berlin like SoundCloud, ThinkCell, and Simplaex offer €100k+ for engineers with the experience they need. Even startup salaries are nudging €75k on AngelList and StackOverflow Jobs.
expertentipp 8y ago
In most Central European countries the total salary cost/net salary easily approaches or even exceedes 200% for any software-related profession. Employment contract is a racket contribution-wise and what’s worse, there is no better option (please don’t suggest contracting or freelancing).
- oneplane 8y ago
  Same here (western Europe) but aside from a little complaining, nobody really wants it gone as it has too many benefits for everyone as whole. And as long as you 'know' the true cost of having an employee you can take that into account which makes it more of a math problem and less of a money problem.
expathacker 8y ago

eloisant 8y ago

This will become easier to compare as income tax will soon be taken directly from the payroll like most other countries. However it's important to note that many people don't actually pay that much income tax in France, or at least nowhere near the 20% to 40% number you're giving. If you're married it depends on your spouse revenue, whether you have kids or not (especially between 0 an 3 yo because you get a tax credit on daycare, etc...) I think the biggest difference between a Software Engineer in France and UK or Germany is not the taxes, but that the gross salary would usually be much lower in France.