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Employers pay half of social security, health insurance and stuff like that on top of the salary. The costs for a company to hire one employee for 60k gross is
by knowhy 6y ago
Employers pay half of social security, health insurance and stuff like that on top of the salary. The costs for a company to hire one employee for 60k gross is about 75k. US dollar does not equal Euro. 75k Euro is currently around 92k USD. The difference is not that big.
- balfirevic 6y agoI'm not from US, but my understanding is that when people quote the US salary figure it also doesn't include all costs that employer has to hire an employee.
- doopy1 6y agoCorrect. It costs's a lot to hire a new employee. I'd say for a small/medium size company hiring an engineer in the 100k-200k range, the cost of hiring is easily at least 6 months of that person's salary if not more.
- balfirevic 6y agoThat too, of course, but I didn't mean expenses like office space, training etc. but things like additional benefits/insurance that employer pays in addition to salary that can be considered part of compensation package but don't get paid to the employee.
- kasey_junk 6y agoTypically the employer cost in the US for an employee is between 1.5-3x their salary cost because the employer is paying things like health care and taxes.
- balfirevic 6y agoWhoa, that's a huge range. Do you know what number is typical for (higher paid, 100K+) tech workers?
- itronitron 6y ago2x cost is typical, so if your salary is 80K then the employer is likely paying another 80k for things like social security and health insurance. Keep in mind that the employee will still have to pay quite a bit for health insurance, and that is largely driven by number of dependents (spouse and children).
- balfirevic 6y ago> so if your salary is 80K then the employer is likely paying another 80k for things like social security and health insurance Is that 80K gross salary? If it is, that would mean that the ratio of take_home_pay/total_cost_for_employer for US is smaller than in much of Europe (which is surprising to me). Here is what numbers for that kind of salary would look like in Croatia: Gross yearly salary: 80 000 USD Total cost for employer: 93 200 USD Take home pay: 48 088 USD (Note - this puts you in the highest tax bracket, almost no one makes that much.)
- kasey_junk 6y agoIt really depends on a lot of tax factors & health insurance but in the US your take home on 80k would be higher than 48k. An example single person with no kids would have 12400 in federal income tax and 6k in social security/Medicare taxes. They’d also pay the employee portion of their health insurance premium which can be anything from 0 to a couple hundred per month but is paid pretax. The highest federal tax rate in the US is 37% and that’s only taxed on income over 518k.
- itronitron 6y agoI should point out that I'm considering the 2X to be the total operational costs to the employer for having an employee. In other words, if I am billing a client $X per hour then my expectation is that my salary will never be more than $X/2 per hour. As kasey_junk points out, an employee will have federal income tax, social security and medicare payments as well as health insurance premiums removed from their paychecks. Some employers also offer additional insurance policies such as short term disability, long term disability, and life insurance. Those are optional and would be additional deductions from the employee's paycheck.