4 ms·

When the pay cut is to the point where it not only impacts your cost of living (maybe 2-3k/month going from SF -> Fayetteville, AR), but also digs in to your li

When the pay cut is to the point where it not only impacts your cost of living (maybe 2-3k/month going from SF -> Fayetteville, AR), but also digs in to your lifestyle, savings, and ability to afford "national" things, it feels more like a demotion than an adjustment. According to one popular-remote-company, that is a 30% downward adjustment. If you were making 200k in SF (for many, that is low), that is a 60k pay cut. If we assume 30k was a "real" adjustment, that is a 30k difference in spendable income. That feels like a demotion. We also know that many large-ticket items in life do not adjust for "cost of living" in the area that you live. College tuition, medical expenses, etc. Over just a couple years that 30k/year difference is an entire college education for a child.

tomjakubowski 6y ago
Can that 30k/year be squirreled away for college untaxed?
- coredog64 6y ago
  Via a 529 plan, yes. But depending on the plan you’re still going to have some overhead.
  - edoceo 6y ago
    You can shop around for 529, to find the right rate/plan. I got mine in MI but I don't live there
tru3_power 6y ago
Which company is this? 30% is a ton. In senior roles, getting 10-15% raises considered a good “promotion”. 30% cut in pay would feel like taking two years backwards...
- nrmitchi 6y ago
  I don't want to call them out explicitly, but they're one of the largest all remote companies, and this information is ready available on their online (and googleable) remote compensation calculator.
  - OliverGilan 6y ago
    This is definitely what I would consider as an edge case (at least I'd assume so). I agree that 30% seems aggressive but something like 10-15% seems more normal imo.
    - nrmitchi 6y ago
      I'm not sure I'd agree. From personal experience speaking with larger companies (not FAANG, but larger "start-up"), I was always seeing an even larger difference. Think "~150-170 in Austin, 225-250 in SF". You may want to knock my negotiation skills, and perhaps you have a point there that I could have pushed their initial non-SF numbers up, but these were at earlier-stage discussions and sharing those numbers seemed "reasonable" to them. And this was Austin, a city which the aforementioned salary calculator only gives a -20% "adjustment". Note that even that 30% is for a "large" AR city. Anyone else in that state is given a 37(!)% reduction. In my opinion, which I've been trying to wrangle into a coherent blog post over the last couple of days, any adjustments like this should be an absolute-dollar-number figure. Percentages don't make sense at _either_ extreme. A 60k/year position with a 20% "move to SF" upward adjustment? That is unlikely to even cover the change in rent. 400k/year with a 20% adjustment? Calling that "cost of living" is bonkers.
- guessmyname 6y ago
  > Which company is this? 30% is a ton. In senior roles, getting 10-15% raises considered a good “promotion”. 30% cut in pay would feel like taking two years backwards... @nrmitchi is probably talking about GitLab and their “Compensation Calculator” [1]. [1] https://about.gitlab.com/handbook/total-rewards/compensation/compensation-calculator/calculator/ https://about.gitlab.com/handbook/total-rewards/compensation...

tomjakubowski 6y ago

Can that 30k/year be squirreled away for college untaxed?

coredog64 6y ago
Via a 529 plan, yes. But depending on the plan you’re still going to have some overhead.
- edoceo 6y ago
  You can shop around for 529, to find the right rate/plan. I got mine in MI but I don't live there

tru3_power 6y ago

Which company is this? 30% is a ton. In senior roles, getting 10-15% raises considered a good “promotion”. 30% cut in pay would feel like taking two years backwards...

nrmitchi 6y ago
I don't want to call them out explicitly, but they're one of the largest all remote companies, and this information is ready available on their online (and googleable) remote compensation calculator.
- OliverGilan 6y ago
  This is definitely what I would consider as an edge case (at least I'd assume so). I agree that 30% seems aggressive but something like 10-15% seems more normal imo.
  - nrmitchi 6y ago
    I'm not sure I'd agree. From personal experience speaking with larger companies (not FAANG, but larger "start-up"), I was always seeing an even larger difference. Think "~150-170 in Austin, 225-250 in SF". You may want to knock my negotiation skills, and perhaps you have a point there that I could have pushed their initial non-SF numbers up, but these were at earlier-stage discussions and sharing those numbers seemed "reasonable" to them. And this was Austin, a city which the aforementioned salary calculator only gives a -20% "adjustment". Note that even that 30% is for a "large" AR city. Anyone else in that state is given a 37(!)% reduction. In my opinion, which I've been trying to wrangle into a coherent blog post over the last couple of days, any adjustments like this should be an absolute-dollar-number figure. Percentages don't make sense at _either_ extreme. A 60k/year position with a 20% "move to SF" upward adjustment? That is unlikely to even cover the change in rent. 400k/year with a 20% adjustment? Calling that "cost of living" is bonkers.
guessmyname 6y ago
> Which company is this? 30% is a ton. In senior roles, getting 10-15% raises considered a good “promotion”. 30% cut in pay would feel like taking two years backwards... @nrmitchi is probably talking about GitLab and their “Compensation Calculator” [1]. [1] https://about.gitlab.com/handbook/total-rewards/compensation/compensation-calculator/calculator/ https://about.gitlab.com/handbook/total-rewards/compensation...