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> an internet search says German taxes go up to 40s, which seems pretty inline with Cali. Using https://www.arbeitnow.com/tools/salary-calculator/germany https

by acchow 4y ago

> an internet search says German taxes go up to 40s, which seems pretty inline with Cali. Using https://www.arbeitnow.com/tools/salary-calculator/germany https://www.arbeitnow.com/tools/salary-calculator/germany and https://smartasset.com/taxes/income-taxes#9jiRJIN31w https://smartasset.com/taxes/income-taxes#9jiRJIN31w In Berlin, 200k nets you 113k after taxes In California, 200k nets 132k after taxes That is 43.5% vs 33% But there are differences in sales taxes/VAT, property taxes (and deductions for such), mortgage interest deduction, etc. A $1M mortgage loan at 3% could reduce your taxable income by 30k, saving you almost 10k in taxes per year in the US.

hef19898 4y ago
German net includes unemployment, social security and health care, among other things (did the stat include church tax or not?), not sure about the California thing. That being said, one million in mortgage buys you one hell of an house in Berlin! And mortgage payments can be tax deductible to an extent as well.
- acchow 4y ago
  In California (and pretty sure this is standard across the USA), unemployment insurance is paid by the employer so doesn't come out of your compensation. The calculator I used also included payments for social security and medicare contributions, which you would use if you eventually fell below security security income bracket (knock on wood) or if you need medical as a senior (I believe age 65+) For other health coverage, that is paid for by the employer so also wouldn't come out of your compensation.
  - bzbarsky 4y ago
    Of course it comes out of your compensation in the end. It just doesn't come out of the "headline" compensation number you see. Which is fine if you're comparing equivalent "headline" numbers. But for other purposes the ratio of take-home pay to what the employer has to pay out (so including all the employer-side taxes) might be more relevant in terms of determining your likelihood of receiving a certain level of take-home pay.
    - acchow 4y ago
      We're comparing headline numbers, not economic cost. There are so many other economic costs to hiring someone that it would be almost impossible to compare. The most blaring one of course is healthcare cost. In the US, the employer bears this cost which is enormous (as healthcare is astronomically expensive in the US) and by your argument this would reduce "your likelihood of receiving a certain level of take-home pay" And yet incomes are much higher in the US than in Germany. I think headline numbers are the only useful thing to compare here.
- pkaye 4y ago
  The FICA rate above for California is the social security/medicare tax. An equal portion is paid by the employee and employer. Unemployment is paid by the employer in California. Mortgage tax deductions are a lot more limited since the 2018 tax reforms. Health care is the big wild card since better employers might subsidize 80-100% of the premium while worse one hardly anything. The Obamacare ACA plans can provide subsidized health insurance for lower income workers but the subsidies taper off at a fairly low income given how much you need to survive in California.
  - hef19898 4y ago
    So overall pretty much on par then. Higher net salaries in California are offset by better / more predictable healthcare costs in Germany. Which leaves base pay, I assume the 200k in Berlin were choosen to make the comparison easier. On the surface, lower base pay in Berlin is offset by lower living costs, especially housing (I am aware Berlin is getting more expensive, it is still far from SV so). Just shows that money isn't everything.
poorlyknit 4y ago
The German calculator (quite transparently) prices in {pension,health,unemployment} insurance. Still a ~10k difference favoring Cali but it shouldn't be left unsaid.
- acchow 4y ago
  The calculator I used also includes a little bit of pension (called Social Security) beginning at age 62+, but it's not very much compared to what you put in. It is quite a bit different from a typical pension plan. The maximum you can get from social security today is $3345/mth. As for health and unemployment insurance, both of those are paid for by the employer in the US.

by acchow 4y ago

hef19898 4y ago

German net includes unemployment, social security and health care, among other things (did the stat include church tax or not?), not sure about the California thing. That being said, one million in mortgage buys you one hell of an house in Berlin! And mortgage payments can be tax deductible to an extent as well.

acchow 4y ago
In California (and pretty sure this is standard across the USA), unemployment insurance is paid by the employer so doesn't come out of your compensation. The calculator I used also included payments for social security and medicare contributions, which you would use if you eventually fell below security security income bracket (knock on wood) or if you need medical as a senior (I believe age 65+) For other health coverage, that is paid for by the employer so also wouldn't come out of your compensation.
- bzbarsky 4y ago
  Of course it comes out of your compensation in the end. It just doesn't come out of the "headline" compensation number you see. Which is fine if you're comparing equivalent "headline" numbers. But for other purposes the ratio of take-home pay to what the employer has to pay out (so including all the employer-side taxes) might be more relevant in terms of determining your likelihood of receiving a certain level of take-home pay.
  - acchow 4y ago
    We're comparing headline numbers, not economic cost. There are so many other economic costs to hiring someone that it would be almost impossible to compare. The most blaring one of course is healthcare cost. In the US, the employer bears this cost which is enormous (as healthcare is astronomically expensive in the US) and by your argument this would reduce "your likelihood of receiving a certain level of take-home pay" And yet incomes are much higher in the US than in Germany. I think headline numbers are the only useful thing to compare here.
pkaye 4y ago
The FICA rate above for California is the social security/medicare tax. An equal portion is paid by the employee and employer. Unemployment is paid by the employer in California. Mortgage tax deductions are a lot more limited since the 2018 tax reforms. Health care is the big wild card since better employers might subsidize 80-100% of the premium while worse one hardly anything. The Obamacare ACA plans can provide subsidized health insurance for lower income workers but the subsidies taper off at a fairly low income given how much you need to survive in California.
- hef19898 4y ago
  So overall pretty much on par then. Higher net salaries in California are offset by better / more predictable healthcare costs in Germany. Which leaves base pay, I assume the 200k in Berlin were choosen to make the comparison easier. On the surface, lower base pay in Berlin is offset by lower living costs, especially housing (I am aware Berlin is getting more expensive, it is still far from SV so). Just shows that money isn't everything.

poorlyknit 4y ago

The German calculator (quite transparently) prices in {pension,health,unemployment} insurance. Still a ~10k difference favoring Cali but it shouldn't be left unsaid.

acchow 4y ago
The calculator I used also includes a little bit of pension (called Social Security) beginning at age 62+, but it's not very much compared to what you put in. It is quite a bit different from a typical pension plan. The maximum you can get from social security today is $3345/mth. As for health and unemployment insurance, both of those are paid for by the employer in the US.