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Big discussion, let me touch another point >It doesn't matter whether you're paying somebody in the Bay Area $100 000 per year, or somebody in the Philippines,
by gbil 3y ago
Big discussion, let me touch another point
>It doesn't matter whether you're paying somebody in the Bay Area $100 000 per year, or somebody in the Philippines, because the cost for you as a business is the same.
The cost for you as business is NOT the same. Start from the taxes part, that 100k is what the employee gets but the cost for the business is higher depending on the country/area because they also pay tax on top, social benefits etc. Also need to have in many cases a local business, doesn't matter if that is virtual etc, since they need to adhere to local laws thus having resources supporting that etc.
So while I'm on the employee side here as I'm also working on a multinational coorp with global role yet paid with local standards, there is more than meets the eye
- mjr00 3y agoyep. People vastly underestimate how difficult the logistics of "pay an employee for services" can be, particularly when you don't have a legal corporate presence in the country where the employee resides. There are services that handle this for you and they charge a 30-40% premium on top of the employee's salary. And sometimes this is still worth it, because many countries charge an absolutely obscene incorporation fee for foreign-owned businesses.
- bmitc 3y ago> People vastly underestimate how difficult the logistics of "pay an employee for services" can be That's the company's problem.
- skrebbel 3y agoIt’s not. If I have to pay some service or agency a lot of money to be able to employ you, there’s less money left to pay you. Employers at distributed companies don’t look at your take-home salary, they look at the total cost to employ you. Fees and taxes differ wildly per country, there’s no other way to compare. So if a large % of that total cost goes to middle men, then that makes you a more costly employee at no benefit to either you or the company. If I’m considering two people for a job but one is in a place where paying them well means I spend a huge amount on fees (or “employer-side taxes” for that matter, looking at you Austria), I might well choose the other.
- MattPalmer1086 3y agoYep, and they choose not to have it unless there's some compelling reason to. We've got staff in many countries, but it's not a blanket "work from wherever you like".
- skrebbel 3y agoFwiw companies like Remote and Deel charge a fixed fee of substantially less than 30-40%. IIRC we pay about 600 euros per employee per month to Remote. That’s a lot of money that I’d rather give to the employees themselves, but it’s much much less than 30-40%.
- mejutoco 3y agoHaving a freelancer registered in another country paid is not as complicated as people make it to be (pay an employee for services). As contractors. The complication is the company prefers to work in one/a few jurisdictions only and have "proper" employees. It simplifies a lot for the company.
- sitharus 3y agoso why not set a “total remuneration package” as it’s known where I live. It’s the total value, inclusive of compulsory payroll deductions and taxes, and set the salary to match that. The cost to the company is the same, but your take-home depends on where you live.
- em-bee 3y agoin many areas salaries must be specified as the take-home part (including the taxes you pay as employee, but not including the part that the employers pay, which is not part of your remuneration), because doing otherwise would be confusing and could be considered deceptive.
- Reimersholme 3y ago[dead]
- Solvency 3y agoWhy is this downvoted? What's wrong about it?