7 ms·

While it is true, the best you can do is vote with your feet. I have had the situation where I was offered "locally competitive salaries" (not in the USA though

While it is true, the best you can do is vote with your feet. I have had the situation where I was offered "locally competitive salaries" (not in the USA though), and every time I've rejected it I had a 50%-100% better offer within few weeks . There ARE companies that will pay better and independently of your location, you do need to be good though (as in companies are proactively seeking you out) and keep searching. A good indicator is the finances of the company. If you are going to be another cog contributing marginal value, for whatever reason that is, then it's going to be difficult to argue for better salary (thought they MIGHT give a higher salary, to everyone, like e.g. Google). If you can however have a big impact and they have good revenue or funding, then it's a lot easier to argue for higher salaries: "so you are making $300k MRR or just raised $5M of VC money with 4 employees? And you have more tickets and bug fixes to improve growth and reduce churn that you can feasibly do? Great, let's talk how I can effectively help to slash those tickets and then we can discuss my compensation*". Classic: https://www.kalzumeus.com/2012/01/23/salary-negotiation/ https://www.kalzumeus.com/2012/01/23/salary-negotiation/ * though if the company is crushing it so much, and specially because your marginal tax rate might be already at 50%, evaluate asking for some Stock Options/RSUs/etc.

ericmay 4y ago
I’m really surprised that nobody has set up address as a service yet so that you can claim for example to live in New York by virtue of an address auto command “a New York salary”.
- Avicebron 4y ago
  I'm not a lawyer, but this seems illegal on its face. Just from a tax perspective for the government, I feel like people would immediately start trying to game it for taxes.
  - CalRobert 4y ago
    I don't know if it matters but I have a limited company and am an employee of said company, which means I deal with taxes on my own and can perform work for (almost) any company in the world - I just invoice them like any supplier. Maybe this is the future? Though some companies would rather you were their employee I suppose.
    - chii 4y ago
      > I have a limited company and am an employee of said company, which means I deal with taxes on my own and can perform work for (almost) any company in the world which means you're a contractor, rather than an employee. I do think this is a better way tbh, as you can potentially own all of your healthcare costs, and optimize your taxes properly. And you can probably charge a lot more as a contractor, to make up for the lack of job security etc.
      - CalRobert 4y ago
        I don't get a lot of tax optimisation (my home country makes it really hard to do anything useful) but I DO have a much easier time getting better-paid work from the US. Otherwise I'd need to go through something like oysterhr.com, boundlesshq, etc.
      - jjeaff 4y ago
        It might be a better idea for high income people. But it is often used to take advantage of regular employees. It is a poor reflection of our tax system that running your own entity that you then pay yourself out of can have lower taxes than simply earning money as an employee.
    - ejb999 4y ago
      I think an awful lot of employers would prefer you were a contractor; in the USA at least, it is the IRS/government that prevents this from happening more by putting the fear into said employers that they will be fined and forced to pay back taxes for anyone improperly classifying people as contractors when they are in fact employees.
      - Tangurena2 4y ago
        It was the tax reform act of 1986 that removed the "safe harbor" provision for engineers and computer professionals. In the city where I currently live, lots of small businesses try to claim that their employees are contractors. Those businesses depend on the ignorance of their workers.
      - 4y ago
- ejb999 4y ago
  great - and then you have to pay NYC taxes. Probably something you want to avoid, unless you actually live there.
- jsty 4y ago
  There’s plenty of virtual office / forwarding address services, but claiming you live at one when you don’t for a pay gain risks (1) fraud against your employer; and (2) tax fraud (if eg in a different city / state / country).
  - ericmay 4y ago
    What’s the definition of where one lives? For example what if you wanted the NYC salary and you rented out a bunk bed for $50/month and traveled around the country while working remote? Cities definitely don’t have the resources to track you down and I’m not sure employers especially larger ones have any mechanisms in place to keep track. I’m not advocating for this just surprised it’s not more well known. Though I suspect it’s common and just not talked about much for obvious reasons. Certainly there are also jobs that require you to physically work from a given state as well for example. How do so called digital nomads handle it from a tax perspective? Do they maintain a residence for tax purposes? Is that any different?
    - FartyMcFarter 4y ago
      Whether something is illegal is different from whether it's easy to enforce. It's hard to say how likely they are to enforce this, but you're definitely taking a risk by pretending to live somewhere. What makes it more problematic is that it's not just tax offices that would be interested in finding out. The company you work at may also get in trouble with the tax office as they pay employment taxes too, so they are probably interested in the fact that you're deceiving them. If your manager suspects you're not being truthful and follows up with HR this could easily get you in trouble. As remote work becomes more popular, it becomes more likely that companies will pay attention to this. Knowing all of that, I'd find it quite hard to justify playing these games. It just seems like asking for trouble, with a pretty good chance of getting it.
      - ericmay 4y ago
        Legality is different than enforcement, but the two aren't totally separate. For example, it's de facto not illegal to drive 5mph over the speed limit on the highway. No police officer will pull you over for that unless they have some other prior reason. So in that sense, lack of enforcement has made the practice legal.
- pydry 4y ago
  Why bother? If somebody wants to pay you less because you live in upstate NY rather than Manhattan just reject them and move on. If the reason is bullshit, there's no need to bullshit back. If the reason isn't bullshit (e.g. coz they want you in their Manhattan office on a moment's notice) then having a virtual address won't help.
  - ghaff 4y ago
    Or, for a different perspective, someone won't pay you a premium because you want to live in Manhattan because they don't actually care where in the country you live.
- davidmurdoch 4y ago
  I know someone that lived in Mexico but listed a friend's address in NYC on all work paperwork.
  - bathtub365 4y ago
    How did that go come tax time?
    - red-iron-pine 4y ago
      Having done this with VA and WA -- went fine w/ VA, went ugly w/ WA. WA has no state income tax, but a beefier payroll tax, so it's cheaper for me but more expensive for the company.
    - davidmurdoch 4y ago
      Pretty sure he pays NY taxes like normal. Not sure about Mexican taxes.
- John23832 4y ago
  Sounds like a good way to complicate your taxes. Especially if you’re claiming to live in California or New York. You know the old saying, noting is certain except death, and the will of the department of taxation for the state of (California|New York).
- elteto 4y ago
  And then pay New York taxes? And possibly NYC too?
  - behringer 4y ago
    You don't actually live there. Filing NY taxes could be tax fraud if you don't live there,although the rules may allow you to if you work there.
- philwelch 4y ago
  Seattle would be a better choice—still a relatively high cost of living but no state income tax yet.
- Mountain_Skies 4y ago
  My state's DMV is able to identify postal addresses that are not physical residences. My guess is that they get this data from USPS, which requires remailing services to register their business. Wouldn't be surprised if the DMV also checks for how many people at a given address have applied for a government ID and if it exceeds a particular threshold, flag it for investigation.
  - ericmay 4y ago
    Yea but you could legally run a bunk house or even just keep a spare bed “available” for someone for $50/month or something and they “live there”. Not saying it would be worth it per-se but definitely ways around that for anyone who is willing. The government can’t regulate something like that very well.
    - RestlessMind 4y ago
      IANAL. Let's say you do that trick of renting a bunk in state X and actually go live in another state Y. Now what if your employers does not want any ties with the state Y and hence avoids establishing a nexus there? By your actions, state Y has a reason to come after your employer since their employee lives in Y (by how Y decides its residency requirements). Pretty sure a legal battle will ensue with you branded as a liar and a deceiver. Depending on how pissed your employer is, it might even go on your personal records which can haunt you next time someone runs a background check while hiring you.
pjc50 4y ago
> specially because your marginal tax rate might be already at 50%, evaluate asking for some Stock Options/RSUs/etc. .. where are those tax exempt? In the UK they're treated as income at the time of vesting, which is not unreasonable https://frazerjames.co.uk/rsus-a-tech-employees-guide/ https://frazerjames.co.uk/rsus-a-tech-employees-guide/
- toast0 4y ago
  RSUs are US taxable at vesting as ordinary income, so that doesn't really help, no. Stock Options are complicated, but if you follow the right procedures and timelines, can end up taxed as capital gains, which is roughly half the tax rate, although there's a lot more risk there.
- franciscop 4y ago
  There's a way to make RSUs behave more like Stock Options for tax purposes for private companies in this particular example [1]. It's not exactly the same, but for the sake of delaying paying taxes on a risky on unsellable stock, they are virtually the same (at a liquidity event they DO behave totally different, but they are basically the same at vesting events). So yeah, you do need to learn about the different examples. It's something people just talk about in the valley and ultimately/generally is where the "high compensation" from tech comes from. In other countries/cities people don't even know what any of these things are. [1] https://zajacgrp.com/insights/what-you-need-to-know-about-double-trigger-restricted-stock-units/ https://zajacgrp.com/insights/what-you-need-to-know-about-do...

ericmay 4y ago

I’m really surprised that nobody has set up address as a service yet so that you can claim for example to live in New York by virtue of an address auto command “a New York salary”.

Avicebron 4y ago
I'm not a lawyer, but this seems illegal on its face. Just from a tax perspective for the government, I feel like people would immediately start trying to game it for taxes.
- CalRobert 4y ago
  I don't know if it matters but I have a limited company and am an employee of said company, which means I deal with taxes on my own and can perform work for (almost) any company in the world - I just invoice them like any supplier. Maybe this is the future? Though some companies would rather you were their employee I suppose.
  - chii 4y ago
    > I have a limited company and am an employee of said company, which means I deal with taxes on my own and can perform work for (almost) any company in the world which means you're a contractor, rather than an employee. I do think this is a better way tbh, as you can potentially own all of your healthcare costs, and optimize your taxes properly. And you can probably charge a lot more as a contractor, to make up for the lack of job security etc.
    - CalRobert 4y ago
      I don't get a lot of tax optimisation (my home country makes it really hard to do anything useful) but I DO have a much easier time getting better-paid work from the US. Otherwise I'd need to go through something like oysterhr.com, boundlesshq, etc.
    - jjeaff 4y ago
      It might be a better idea for high income people. But it is often used to take advantage of regular employees. It is a poor reflection of our tax system that running your own entity that you then pay yourself out of can have lower taxes than simply earning money as an employee.
  - ejb999 4y ago
    I think an awful lot of employers would prefer you were a contractor; in the USA at least, it is the IRS/government that prevents this from happening more by putting the fear into said employers that they will be fined and forced to pay back taxes for anyone improperly classifying people as contractors when they are in fact employees.
    - Tangurena2 4y ago
      It was the tax reform act of 1986 that removed the "safe harbor" provision for engineers and computer professionals. In the city where I currently live, lots of small businesses try to claim that their employees are contractors. Those businesses depend on the ignorance of their workers.
    - 4y ago
ejb999 4y ago
great - and then you have to pay NYC taxes. Probably something you want to avoid, unless you actually live there.
jsty 4y ago
There’s plenty of virtual office / forwarding address services, but claiming you live at one when you don’t for a pay gain risks (1) fraud against your employer; and (2) tax fraud (if eg in a different city / state / country).
- ericmay 4y ago
  What’s the definition of where one lives? For example what if you wanted the NYC salary and you rented out a bunk bed for $50/month and traveled around the country while working remote? Cities definitely don’t have the resources to track you down and I’m not sure employers especially larger ones have any mechanisms in place to keep track. I’m not advocating for this just surprised it’s not more well known. Though I suspect it’s common and just not talked about much for obvious reasons. Certainly there are also jobs that require you to physically work from a given state as well for example. How do so called digital nomads handle it from a tax perspective? Do they maintain a residence for tax purposes? Is that any different?
  - FartyMcFarter 4y ago
    Whether something is illegal is different from whether it's easy to enforce. It's hard to say how likely they are to enforce this, but you're definitely taking a risk by pretending to live somewhere. What makes it more problematic is that it's not just tax offices that would be interested in finding out. The company you work at may also get in trouble with the tax office as they pay employment taxes too, so they are probably interested in the fact that you're deceiving them. If your manager suspects you're not being truthful and follows up with HR this could easily get you in trouble. As remote work becomes more popular, it becomes more likely that companies will pay attention to this. Knowing all of that, I'd find it quite hard to justify playing these games. It just seems like asking for trouble, with a pretty good chance of getting it.
    - ericmay 4y ago
      Legality is different than enforcement, but the two aren't totally separate. For example, it's de facto not illegal to drive 5mph over the speed limit on the highway. No police officer will pull you over for that unless they have some other prior reason. So in that sense, lack of enforcement has made the practice legal.
pydry 4y ago
Why bother? If somebody wants to pay you less because you live in upstate NY rather than Manhattan just reject them and move on. If the reason is bullshit, there's no need to bullshit back. If the reason isn't bullshit (e.g. coz they want you in their Manhattan office on a moment's notice) then having a virtual address won't help.
- ghaff 4y ago
  Or, for a different perspective, someone won't pay you a premium because you want to live in Manhattan because they don't actually care where in the country you live.
davidmurdoch 4y ago
I know someone that lived in Mexico but listed a friend's address in NYC on all work paperwork.
- bathtub365 4y ago
  How did that go come tax time?
  - red-iron-pine 4y ago
    Having done this with VA and WA -- went fine w/ VA, went ugly w/ WA. WA has no state income tax, but a beefier payroll tax, so it's cheaper for me but more expensive for the company.
  - davidmurdoch 4y ago
    Pretty sure he pays NY taxes like normal. Not sure about Mexican taxes.
John23832 4y ago
Sounds like a good way to complicate your taxes. Especially if you’re claiming to live in California or New York. You know the old saying, noting is certain except death, and the will of the department of taxation for the state of (California|New York).
elteto 4y ago
And then pay New York taxes? And possibly NYC too?
- behringer 4y ago
  You don't actually live there. Filing NY taxes could be tax fraud if you don't live there,although the rules may allow you to if you work there.
philwelch 4y ago
Seattle would be a better choice—still a relatively high cost of living but no state income tax yet.
Mountain_Skies 4y ago
My state's DMV is able to identify postal addresses that are not physical residences. My guess is that they get this data from USPS, which requires remailing services to register their business. Wouldn't be surprised if the DMV also checks for how many people at a given address have applied for a government ID and if it exceeds a particular threshold, flag it for investigation.
- ericmay 4y ago
  Yea but you could legally run a bunk house or even just keep a spare bed “available” for someone for $50/month or something and they “live there”. Not saying it would be worth it per-se but definitely ways around that for anyone who is willing. The government can’t regulate something like that very well.
  - RestlessMind 4y ago
    IANAL. Let's say you do that trick of renting a bunk in state X and actually go live in another state Y. Now what if your employers does not want any ties with the state Y and hence avoids establishing a nexus there? By your actions, state Y has a reason to come after your employer since their employee lives in Y (by how Y decides its residency requirements). Pretty sure a legal battle will ensue with you branded as a liar and a deceiver. Depending on how pissed your employer is, it might even go on your personal records which can haunt you next time someone runs a background check while hiring you.

pjc50 4y ago

> specially because your marginal tax rate might be already at 50%, evaluate asking for some Stock Options/RSUs/etc. .. where are those tax exempt? In the UK they're treated as income at the time of vesting, which is not unreasonable https://frazerjames.co.uk/rsus-a-tech-employees-guide/ https://frazerjames.co.uk/rsus-a-tech-employees-guide/

toast0 4y ago
RSUs are US taxable at vesting as ordinary income, so that doesn't really help, no. Stock Options are complicated, but if you follow the right procedures and timelines, can end up taxed as capital gains, which is roughly half the tax rate, although there's a lot more risk there.
franciscop 4y ago
There's a way to make RSUs behave more like Stock Options for tax purposes for private companies in this particular example [1]. It's not exactly the same, but for the sake of delaying paying taxes on a risky on unsellable stock, they are virtually the same (at a liquidity event they DO behave totally different, but they are basically the same at vesting events). So yeah, you do need to learn about the different examples. It's something people just talk about in the valley and ultimately/generally is where the "high compensation" from tech comes from. In other countries/cities people don't even know what any of these things are. [1] https://zajacgrp.com/insights/what-you-need-to-know-about-double-trigger-restricted-stock-units/ https://zajacgrp.com/insights/what-you-need-to-know-about-do...