4 ms·

Comp may be lower, but so is everything else. At the end of the day the guys in the south have more in their pocket than most Bay Area workers.

fierro 8y ago
I hear this often. I would like to see an analysis, breakdown, or a real life comparison that suggests this, and for which tier of engineers this is true. I think two things; 1) non bay area tech workers severely underestimate the total comps that bay area workers are earning right now. 2) many renters in the Bay Area may actually have more in their pocket. If you are willing to rent a room (i.e not have a studio or 1BR apartment), you're probably paying 1-1.5k more per month. The salary delta for Bay Area techies is way more than 12months*1.5k/month per year. Have some basic financial responsibility and you can really save a lot out here.
- deleted 8y ago
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- tfehring 8y ago
  You need to apply the marginal tax rate for California workers, which would typically be ~41% (24% federal + 9.3% state + 7.65% Social Security + Medicare), to figure out how much more is needed on a pre-tax basis. You need an extra $2.5k/month ($30k/year) pre-tax to make up a $1.5k/month difference in rent, or $3.4k/month ($40k/year) pre-tax to make up a $2k/month difference in rent, which is more realistic if you want your own apartment. And that's just looking at the difference in rent. The number goes up further if you account for the fact that everything else is also more expensive in the Bay Area, and if you add in the additional money you need to save for a down payment, assuming you want to buy at some point. I wouldn't be surprised if that $40k/year difference ends up in the $60k-$70k range if you factor those in. I don't doubt that a $60k-$70k difference in total comp is achievable at FANG. At startups, you probably don't get there without counting equity, which is riskier and far less liquid than equity comp at FANG.
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  - mercutio2 8y ago
    Note that your marginal tax as a tech worker should NOT include 7.65% for FICA. Tech worker’s marginal taxes are, perversely and regressively, lower than not-quite-six-figures earners, because social security cuts out well before marginal tax rates go up.
- chrisseaton 8y ago
  > If you are willing to rent a room (i.e not have a studio or 1BR apartment) That’s fine for the first year after graduating, but then when you get married and have children what are you supposed to do then?
- mbrumlow 8y ago
  I don't think you have anywhere near of a clue how much it cost for housing in the south. Although I am talking mostly about Houston. My mortgage on a 5 bedroom 3 bath house (3k sqfeet) in the population center of Houston is $1500 a month... That being said the most I have ever paid for a apartment was $2100 a month for a 2 bedroom in the riches part of town with views of the city skyline and spiraling biking and jogging ways. Awesome food everywhere. $800 or less and you can still live in a nice area with more food options and awesome public parks and public transpiration. And if you are on a budget -- you can still get 1 bedroom apartments for $500 to $600 a month --- from my understanding you can't even get near that in the Bay Area, you would break the bake at 1k for a single room.
mdorazio 8y ago
I'm not convinced this is really true in a lot of the "actually desirable to young tech people" areas of southern cities. I just checked rent prices in Franklin, TN for a contract project opportunity and found newish apartments are going for $1300+. Trendy parts of Raleigh are renting apartments for $1100+. Meanwhile, it's very difficult to live in the South without a car, and salaries are far lower than $24k under a Bay Area tech comp structure (assuming you rent at the $3k level there). I will grant you that if you have a family it's way cheaper due to availability of real houses in the burbs combined with cheaper daycare/nanny/housekeeping/etc., but a young, successful tech worker is probably better off on the west coast despite the higher cost of living.
- fierro 8y ago
  I think you're spot on, the only case where I see this is true is for families or those who wish to be homeowners
throwaway713 8y ago
This isn't true for a lot tech workers. It's part of the reason why I moved from the south to the Bay Area. I pay as much in rent, taxes, and other California fees as I made in my entire salary in the South (which was roughly $110k), and I still have way more left over to save for retirement after all of that. Not to mention the health insurance here saves another $10k per year.

fierro 8y ago

I hear this often. I would like to see an analysis, breakdown, or a real life comparison that suggests this, and for which tier of engineers this is true. I think two things; 1) non bay area tech workers severely underestimate the total comps that bay area workers are earning right now. 2) many renters in the Bay Area may actually have more in their pocket. If you are willing to rent a room (i.e not have a studio or 1BR apartment), you're probably paying 1-1.5k more per month. The salary delta for Bay Area techies is way more than 12months*1.5k/month per year. Have some basic financial responsibility and you can really save a lot out here.

deleted 8y ago
[deleted]
tfehring 8y ago
You need to apply the marginal tax rate for California workers, which would typically be ~41% (24% federal + 9.3% state + 7.65% Social Security + Medicare), to figure out how much more is needed on a pre-tax basis. You need an extra $2.5k/month ($30k/year) pre-tax to make up a $1.5k/month difference in rent, or $3.4k/month ($40k/year) pre-tax to make up a $2k/month difference in rent, which is more realistic if you want your own apartment. And that's just looking at the difference in rent. The number goes up further if you account for the fact that everything else is also more expensive in the Bay Area, and if you add in the additional money you need to save for a down payment, assuming you want to buy at some point. I wouldn't be surprised if that $40k/year difference ends up in the $60k-$70k range if you factor those in. I don't doubt that a $60k-$70k difference in total comp is achievable at FANG. At startups, you probably don't get there without counting equity, which is riskier and far less liquid than equity comp at FANG.
- deleted 8y ago
  [deleted]
- mercutio2 8y ago
  Note that your marginal tax as a tech worker should NOT include 7.65% for FICA. Tech worker’s marginal taxes are, perversely and regressively, lower than not-quite-six-figures earners, because social security cuts out well before marginal tax rates go up.
chrisseaton 8y ago
> If you are willing to rent a room (i.e not have a studio or 1BR apartment) That’s fine for the first year after graduating, but then when you get married and have children what are you supposed to do then?
mbrumlow 8y ago
I don't think you have anywhere near of a clue how much it cost for housing in the south. Although I am talking mostly about Houston. My mortgage on a 5 bedroom 3 bath house (3k sqfeet) in the population center of Houston is $1500 a month... That being said the most I have ever paid for a apartment was $2100 a month for a 2 bedroom in the riches part of town with views of the city skyline and spiraling biking and jogging ways. Awesome food everywhere. $800 or less and you can still live in a nice area with more food options and awesome public parks and public transpiration. And if you are on a budget -- you can still get 1 bedroom apartments for $500 to $600 a month --- from my understanding you can't even get near that in the Bay Area, you would break the bake at 1k for a single room.

mdorazio 8y ago

I'm not convinced this is really true in a lot of the "actually desirable to young tech people" areas of southern cities. I just checked rent prices in Franklin, TN for a contract project opportunity and found newish apartments are going for $1300+. Trendy parts of Raleigh are renting apartments for $1100+. Meanwhile, it's very difficult to live in the South without a car, and salaries are far lower than $24k under a Bay Area tech comp structure (assuming you rent at the $3k level there). I will grant you that if you have a family it's way cheaper due to availability of real houses in the burbs combined with cheaper daycare/nanny/housekeeping/etc., but a young, successful tech worker is probably better off on the west coast despite the higher cost of living.

fierro 8y ago
I think you're spot on, the only case where I see this is true is for families or those who wish to be homeowners

throwaway713 8y ago

This isn't true for a lot tech workers. It's part of the reason why I moved from the south to the Bay Area. I pay as much in rent, taxes, and other California fees as I made in my entire salary in the South (which was roughly $110k), and I still have way more left over to save for retirement after all of that. Not to mention the health insurance here saves another $10k per year.