3 ms·
Salaries yes, stock compensation not necessarily. It's very rare to cut salaries because you end up demoralizing employees, who then aren't productive, so why
by nostrademons 5y ago
Salaries yes, stock compensation not necessarily. It's very rare to cut salaries because you end up demoralizing employees, who then aren't productive, so why bother to pay them anything? That's why companies do layoffs, where they just eliminate jobs rather than pay less.
Keep in mind that when everybody gets paid a lot, everything is expensive. That's the real way that high salaries return to the norm: everything else catches up. Bay Area is already the most expensive part of the U.S; you might get paid $200-300K, but taxes eat half that, rents are $2.5-3K/month, mortgage payments are $10K+, daycare is about $2-3K, restaurant meals are $30, etc.
Not sure how that compares to your country - if you're coming from Eastern Europe you're going to get sticker shock, but a lot of central/western European regions (eg. Zurich, Paris, Scandinavia) are already there. It's a different type of expensive though: in general consumer goods, food, housing, and gas cost more in Europe, but healthcare, education, and childcare cost more in the U.S.
- sudosysgen 5y agoTaxes won't take half your pay, more like a third, maybe a bit more if you're towards the topend. Marginal tax rate != Effective tax rate. That said, I agree as for the rest.
- imapeopleperson 5y agoNothing helps fine-tune math skills like seeing 6 figures go to taxes
- cm2012 5y agoWith FAANG salaries I've seen paystubs showing 47% total tax on the paystub, not including property and sales tax.
- sudosysgen 5y agoDid you take into account the tax return?
- wikibob 5y agoThis doesn’t need to be a debate. Simply calculate it and look at the effective tax rate. Here https://smartasset.com/taxes/california-paycheck-calculator https://smartasset.com/taxes/california-paycheck-calculator And use the Total Compensation data from https://levels.fyi https://levels.fyi You are taxed on RSUs the same as salary.
- cm2012 5y agoThis calc doesn't include payroll tax
- raiflip 5y agoSometimes it sounds like bay area programmers think how expensive their area is, is how it is for programmers elsewhere. I also get paid around the same range in NYC, but my mortgage is nowhere near 10k, my taxes eat maybe 40%, and I can definitely find restaurant meals for less than $30. The high expenses of the bay area are a policy choice by the local and state government to disallow investment. As such everyone is competing for the same old housing stock and office space that cost a 1/3rd of what it does now years ago. In effect, house owners and landlords are appropriating tech profits to themselves. I hope the banning of single home zoning in California helps to alleviate this issue.
- nostrademons 5y agoOP explicitly mentioned Bay Area in his post. I'd agree that housing policy is brain-dead in the Bay Area and that causes a lot of the high CoL; the other major factor is that these tech salaries are a significant fraction of total earners, which gives people selling to them enough of a market to raise prices. If 1% of the population makes $300K/year, they get to live like a 1%er. If 10% of the population makes $300K/year, they live like a 10%er.