2 ms·

You are completely missing the point here. Not only are you trying to argue against things that I did not say, but you are also comparing things that cannot. Wh

You are completely missing the point here. Not only are you trying to argue against things that I did not say, but you are also comparing things that cannot. What Europeans call "gross" salary is NOT what Americans call "gross" salary. And you are mixing them together, which is exactly what my comment was trying to prevent. > the comparison of 80k euros being less than $150k, because retirement savings will come out of both numbers. No, the 80k remuneration is AFTER half the retirement contribution. > the French person will pay for healthcare in the form of higher taxes out of that 80k euros No, most of the healthcare is actually in the employer part, which is already removed from these 80k. In Europe, what people call "gross" is the employee part of the income. This part already had the employer part removed, which contains a part of medical care and retirement. In US, especially with 401k, the employer part is pretty much non existent until the employee triggers a contribution. What it means is that on the 80k that a European will call his "gross" salary, he will in fact have been paid around 140k, with 60k going to his mandatory retirement/medical care for the employer contribution. The taxes left on the 80k are only the employee part. People in Europe usually don't add up the employer contribution part into account in what they call their "gross" salary because it's a mandatory part and often not displayed on the payslips. This is not how it works in the US. The $150k that employees refer to as their "gross" income did not had the employer contribution deducted yet. I am not _at all_ trying to compare the retirement system of US versus EU, or saying that one is better or not or whatever. All I'm saying is EU gross is not comparable to US gross, as these numbers do NOT contain the same deductions. In your post, you are _consistently_ mixing the two gross numbers together, which is very wrong.

pingyong 7y ago
Hmm, this is certainly interesting, but if I do the calculation for Germany for example, 80,000€ "gross" income comes out to a cost of about 96,600€. https://www.nettolohn.de/rechner/gehaltsrechner-fuer-arbeitgeber/ https://www.nettolohn.de/rechner/gehaltsrechner-fuer-arbeitg... Certainly relevant, but there's still a decent gap between 96,600€ ($108,165) and $150,000.
- Galanwe 7y ago
  I admit I did the computation 80kE ~= $150k from the top of my head, it’s not super accurate and will depend on countries and the status of the employee (different status imply different employer deductions). In France for instance, people will insist on having the “cadre” status, which require more employer contribution and also has implications on how their liabilities toward the company are judged. This should raise the bar to $150k. Edit: I did the computation for France and end up with 130k EUR super gross for a 80k EUR gross. So that would be an equivalent of $145k. Not far from my guess. I used the french government calculator to compute the exact values: https://www.economie.gouv.fr/entreprises/simulateur-cout-embauche-salarie-CDI-CDD-apprenti https://www.economie.gouv.fr/entreprises/simulateur-cout-emb...
mkohlmyr 7y ago
I don't know anyone who calls take-home (net) pay gross salary in Europe. I have lived and worked in multiple countries. And the actual gross is definitely displayed on the payslips.
- Galanwe 7y ago
  > I don't know anyone who calls take-home (net) pay gross salary in Europe. I have lived and worked in multiple countries. That is not what I am saying... There are basically 3 stages of income in Europe: employer gross -> employee gross -> employee net. Most Europeans refer to employee gross as simply “gross”. There are still the employee contribution part to be deducted before the net, but the whole employer contribution has completely been removed already. Payslips as well as employment contracts usually display the employee gross. That is why the real total compensation including the employer contribution is rarely displayed anywhere in Europe and people forget about it, thus creating the incompréhension of this whole comment thread, where people compare incomparable incomes.
  - mkohlmyr 7y ago
    Yeah fair enough then, that's true - misunderstood your comment.
- jhrmnn 7y ago
  Let me try to reformulate OP's comment. In many European countries, there are three deduction levels: (1) the net salary, after all taxes and health and social care deductions, (2) the gross salary, after all mandatory employer contributions to the health and social care systems (3) the total cost of an employee to the employer (the English equivalent of the term used in Czechia would be "super-gross" salary). OP's point was that first, in the EU, there is often a big difference between (2) and (3), whereas they are very close or equal in the US, and second, gross salary usually refers to (2) in the EU and to (3) in the US. That said, I don't think that the difference between (2) and (3) is as big as suggested by the OP even in the EU, at least in the countries that I'm familiar with.
  - 7y ago
rayiner 7y ago
In both countries, there is an employer contribution and an employee contribution. In both countries, “gross” income excludes the employer contribution. In the US, it also excludes employer-paid health insurance premiums. In France, it excludes the employer-paid health insurance tax. As to the precise mix, I don’t think it’s accurate to say that more will be paid by the employer in Europe. In both countries, medical is paid mostly by the employer, and deducted before the $150k/80k euro number. Both countries have a similar employee-paid social security rate (6-7%). As explained above, the base Social Security payment will return as much in absolute terms as the French retirement system. Any 401k you contribute to will return a lot more in retirement than what you would receive in France.
- Galanwe 7y ago
  You are mistaken, because you do not take into account the whole contributions that are deducted between gross and super-gross. Medical care is just one of them and it adds up to WAY more than 8%. Here is a break down of what that would look like for a French employee: (1) Starting with a super gross of 130k EUR / year ($145k): - Deduct retirement contribution - Deduct health care contribution - Deduct family contribution - Deduct public housing contribution - Deduct unemployment contribution - Deduct professional disease contribution - Deduct employee formation contribution - Deduct elderly contribution - Some other contributions (2) You end up with a gross salary of ~80k EUR / year ($90k): - Deduct employee contribution to all the above (3) You end up with a net salary of ~50k / year ($55k). You can do the computation yourself from the calculator on the french government website: https://www.economie.gouv.fr/entreprises/simulateur-cout-embauche-salarie-CDI-CDD-apprenti https://www.economie.gouv.fr/entreprises/simulateur-cout-emb...
  - rayiner 7y ago
    The same thing is true of the United States as well. The $150k salary is going to be after: 1) Retirement contribution 2) Medicare/health insurance contribution 3) Unemployment insurance contribution At the $150k salary level, the following will also be provided as benefits before the $150k: 4) Short and long term disability insurance 5) Family leave A gross salary of $150k is going to be more like $175k including those taxes and costs. In California, on a salary of $150k, the net paycheck will be like $90-95k, or $80-85k if you max out your 401k contribution. (If you do that, your retirement benefits will be much more than you would receive in France.)

pingyong 7y ago

Hmm, this is certainly interesting, but if I do the calculation for Germany for example, 80,000€ "gross" income comes out to a cost of about 96,600€. https://www.nettolohn.de/rechner/gehaltsrechner-fuer-arbeitgeber/ https://www.nettolohn.de/rechner/gehaltsrechner-fuer-arbeitg... Certainly relevant, but there's still a decent gap between 96,600€ ($108,165) and $150,000.

Galanwe 7y ago
I admit I did the computation 80kE ~= $150k from the top of my head, it’s not super accurate and will depend on countries and the status of the employee (different status imply different employer deductions). In France for instance, people will insist on having the “cadre” status, which require more employer contribution and also has implications on how their liabilities toward the company are judged. This should raise the bar to $150k. Edit: I did the computation for France and end up with 130k EUR super gross for a 80k EUR gross. So that would be an equivalent of $145k. Not far from my guess. I used the french government calculator to compute the exact values: https://www.economie.gouv.fr/entreprises/simulateur-cout-embauche-salarie-CDI-CDD-apprenti https://www.economie.gouv.fr/entreprises/simulateur-cout-emb...

mkohlmyr 7y ago

I don't know anyone who calls take-home (net) pay gross salary in Europe. I have lived and worked in multiple countries. And the actual gross is definitely displayed on the payslips.

Galanwe 7y ago
> I don't know anyone who calls take-home (net) pay gross salary in Europe. I have lived and worked in multiple countries. That is not what I am saying... There are basically 3 stages of income in Europe: employer gross -> employee gross -> employee net. Most Europeans refer to employee gross as simply “gross”. There are still the employee contribution part to be deducted before the net, but the whole employer contribution has completely been removed already. Payslips as well as employment contracts usually display the employee gross. That is why the real total compensation including the employer contribution is rarely displayed anywhere in Europe and people forget about it, thus creating the incompréhension of this whole comment thread, where people compare incomparable incomes.
- mkohlmyr 7y ago
  Yeah fair enough then, that's true - misunderstood your comment.
jhrmnn 7y ago
Let me try to reformulate OP's comment. In many European countries, there are three deduction levels: (1) the net salary, after all taxes and health and social care deductions, (2) the gross salary, after all mandatory employer contributions to the health and social care systems (3) the total cost of an employee to the employer (the English equivalent of the term used in Czechia would be "super-gross" salary). OP's point was that first, in the EU, there is often a big difference between (2) and (3), whereas they are very close or equal in the US, and second, gross salary usually refers to (2) in the EU and to (3) in the US. That said, I don't think that the difference between (2) and (3) is as big as suggested by the OP even in the EU, at least in the countries that I'm familiar with.
- 7y ago

rayiner 7y ago

In both countries, there is an employer contribution and an employee contribution. In both countries, “gross” income excludes the employer contribution. In the US, it also excludes employer-paid health insurance premiums. In France, it excludes the employer-paid health insurance tax. As to the precise mix, I don’t think it’s accurate to say that more will be paid by the employer in Europe. In both countries, medical is paid mostly by the employer, and deducted before the $150k/80k euro number. Both countries have a similar employee-paid social security rate (6-7%). As explained above, the base Social Security payment will return as much in absolute terms as the French retirement system. Any 401k you contribute to will return a lot more in retirement than what you would receive in France.

Galanwe 7y ago
You are mistaken, because you do not take into account the whole contributions that are deducted between gross and super-gross. Medical care is just one of them and it adds up to WAY more than 8%. Here is a break down of what that would look like for a French employee: (1) Starting with a super gross of 130k EUR / year ($145k): - Deduct retirement contribution - Deduct health care contribution - Deduct family contribution - Deduct public housing contribution - Deduct unemployment contribution - Deduct professional disease contribution - Deduct employee formation contribution - Deduct elderly contribution - Some other contributions (2) You end up with a gross salary of ~80k EUR / year ($90k): - Deduct employee contribution to all the above (3) You end up with a net salary of ~50k / year ($55k). You can do the computation yourself from the calculator on the french government website: https://www.economie.gouv.fr/entreprises/simulateur-cout-embauche-salarie-CDI-CDD-apprenti https://www.economie.gouv.fr/entreprises/simulateur-cout-emb...
- rayiner 7y ago
  The same thing is true of the United States as well. The $150k salary is going to be after: 1) Retirement contribution 2) Medicare/health insurance contribution 3) Unemployment insurance contribution At the $150k salary level, the following will also be provided as benefits before the $150k: 4) Short and long term disability insurance 5) Family leave A gross salary of $150k is going to be more like $175k including those taxes and costs. In California, on a salary of $150k, the net paycheck will be like $90-95k, or $80-85k if you max out your 401k contribution. (If you do that, your retirement benefits will be much more than you would receive in France.)