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Ask HN: Salary discussions – numbers are before or after taxes?

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Re: Ask HN: Salary discussions – numbers are before or after taxes?

#31

Post by junon »

samstave wrote: post #30
junon wrote: post #21

Gross = before expenses/taxes. Net = after (which, specifically, depends on the context). Always negotiate your compensation in gross. Always negotiate hourly in hours, salary in years or months (most places prefer the former, but depending on your country it might be customary to discuss in the latter). A multiplication/division by 12 is usually sufficient. Hourly pay means you work time, you get paid for exactly th…

Also, its super easy to calc your annual based on hours: just double the hourly rate and thats what you generally gross per year, i.e. $16/hour is ~32,000 per year. So if you ever wonder, take your $160,000 per year and you are making $80 per hour... so your complaints about salary will diminish.

TIL, neat trick!

Re: Ask HN: Salary discussions – numbers are before or after taxes?

#32

Post by neverartful »

samstave wrote: post #30
junon wrote: post #21

Gross = before expenses/taxes. Net = after (which, specifically, depends on the context). Always negotiate your compensation in gross. Always negotiate hourly in hours, salary in years or months (most places prefer the former, but depending on your country it might be customary to discuss in the latter). A multiplication/division by 12 is usually sufficient. Hourly pay means you work time, you get paid for exactly th…

Also, its super easy to calc your annual based on hours: just double the hourly rate and thats what you generally gross per year, i.e. $16/hour is ~32,000 per year. So if you ever wonder, take your $160,000 per year and you are making $80 per hour... so your complaints about salary will diminish.

Double the hourly rate and then add three zeros to the end (to multiply by 1000). Or if you want just 1 step, multiply by 2000.

Re: Ask HN: Salary discussions – numbers are before or after taxes?

#33

Post by redwood »

In the US it's always pre tax and generally annual whereas in Europe it's often post tax and monthly in many cases.

I respect the European model but the US model is not going away since taxes are situation dependent and culturally folks have a different attitude about taxes

Re: Ask HN: Salary discussions – numbers are before or after taxes?

#34

Post by CodesInChaos »

In Germany you negotiate the "gross" salary. But certain mandatory insurance payments (healthcare, unemployment, retirement, nursing) are split between employee (subtracted from gross) and employer (added to gross). So the direct cost to the employer is about 20% higher than the "gross" salary.

Re: Ask HN: Salary discussions – numbers are before or after taxes?

#36

Post by seattle_spring »

throwaway09223 wrote: post #23
junon wrote: post #21

Gross = before expenses/taxes. Net = after (which, specifically, depends on the context). Always negotiate your compensation in gross. Always negotiate hourly in hours, salary in years or months (most places prefer the former, but depending on your country it might be customary to discuss in the latter). A multiplication/division by 12 is usually sufficient. Hourly pay means you work time, you get paid for exactly th…

Yes, and to build on your comment regarding the employer's lack of knowledge and control over taxes: Equity comp also means the employee has control over when they get compensated. Maybe the employee will sell equity as it vests, maybe they'll keep it and sell it all ten years later. These choices will all drastically change the tax situation. A good employer will work with you as a team to help you realize your fina…

> Equity comp also means the employee has control over when they get compensated.

I wish that were a universal truth, but it decidedly does not apply to RSUs which most equity compensation comes in the form of.

Re: Ask HN: Salary discussions – numbers are before or after taxes?

#37

Post by seattle_spring »

CodesInChaos wrote: post #34

In Germany you negotiate the "gross" salary. But certain mandatory insurance payments (healthcare, unemployment, retirement, nursing) are split between employee (subtracted from gross) and employer (added to gross). So the direct cost to the employer is about 20% higher than the "gross" salary.

That's true in the US as well.

Re: Ask HN: Salary discussions – numbers are before or after taxes?

#38

Post by Konnstann »

samstave wrote: post #30
junon wrote: post #21

Gross = before expenses/taxes. Net = after (which, specifically, depends on the context). Always negotiate your compensation in gross. Always negotiate hourly in hours, salary in years or months (most places prefer the former, but depending on your country it might be customary to discuss in the latter). A multiplication/division by 12 is usually sufficient. Hourly pay means you work time, you get paid for exactly th…

Also, its super easy to calc your annual based on hours: just double the hourly rate and thats what you generally gross per year, i.e. $16/hour is ~32,000 per year. So if you ever wonder, take your $160,000 per year and you are making $80 per hour... so your complaints about salary will diminish.

If you're doing that for salary->hourly rate make sure you're honest about how many hours you actually work, that math only works for 40h/week, if you're working 50, 60, or 80 hour weeks adjust accordingly.

Re: Ask HN: Salary discussions – numbers are before or after taxes?

#39

Post by junon »

seattle_spring wrote: post #36
throwaway09223 wrote: post #23

Earlier quoted context omitted.

Yes, and to build on your comment regarding the employer's lack of knowledge and control over taxes: Equity comp also means the employee has control over when they get compensated. Maybe the employee will sell equity as it vests, maybe they'll keep it and sell it all ten years later. These choices will all drastically change the tax situation. A good employer will work with you as a team to help you realize your fina…

> Equity comp also means the employee has control over when they get compensated. I wish that were a universal truth, but it decidedly does not apply to RSUs which most equity compensation comes in the form of.

> which most equity compensation comes in the form of.

* location depending.

This is certainly the case today in some places, but has not been the norm in most places (unfortunately).

Re: Ask HN: Salary discussions – numbers are before or after taxes?

#40

Post by 41209 »

Amezarak wrote: post #8
41209 wrote: post #5

Always pre tax. Everything depends on the person. For example the same 2 people can make exactly the same, but live in 2 different states. And with state income tax is varying from 10% all the way down to 0%, this choice of locale can make a big difference

It's not just state income tax making a big difference, it's also health insurance! The employee contribution towards health insurance premiums has IME ranged from $0 to $10k. So even in the same state, two different employers paying the same gross salary could mean very different net salaries. Unfortunately, it's also a big pain in my experience to get companies to disclose this information before hiring.

Even so-called good health insurance can often have massive gaps. I'm exceptionally fortunate in that I make enough money to just pay out of pocket, if I was poor or even just working class I wouldn't be able to say drop $100 or so on an Uber ride to and out of the way doctor. I'd be skipping medicine when I can't make my co-pays, which for my extremely treatable conditions would make things much much worse.

If I had one wish it would be to decouple healthcare from employment. No one should have a nightmare scenario where they get fired on Wednesday and next week can't afford their wife's heart medicine.

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