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Ask HN: How to increase SWE salaries in Europe?

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Re: Ask HN: How to increase SWE salaries in Europe?

#911

Post by thargor »

knuthsat wrote: post #820
thargor wrote: post #753

Earlier quoted context omitted.

I call bullshit on the tax rate in Austria. "Capital gains" through GmbH is 25% KÖSt (Körperschaftssteuer) and then 27,25% KESt on Profit. The highest VAT rate is 20%, there are also lower ones. This results in 56.35% percent including VAT (1-((1-25%) (1-27.25%) (1-20%)). If you go through income tax as a freelancer this is even lower when you claim the default deductibles (Pauschalierung), which is common in IT jobs…

Well, having a GmbH does not really allow a clean profit extraction without having employees, so when you eventually employ yourself you'll get to around 70%. Austria is one of the worst countries in the world to do any kind of small business. Self-employment is also taxed aggressively. A form of self-employment in Croatia allows a fixed tax payment of about 5k EUR a year with an income cap of 39k EUR per year, leavi…

39k EUR a year in Austria is 33% tax+insurance+pension:

20% "forced savings" (Pension + Vorsorgekasse) 7% health insurance 6% income tax

But 39k a year is definitely not a freelance programmer in Austria.

80-120k is the average I see at my colleagues and enterprise customers for freelance programmers with regular working hours compared to regular employees (5 week vacation, sick absence, ...). I know people scratching at 200k, but they are senior consultants.

So a more realistic view would be 100k 40,5% tax+insurance+pension 15% "forced savings" (Pension + Vorsorgekasse) 6% health insurance 19,6% income tax

This calculation assumes that you do not really have significant expenses of business. Having those actually makes the picture look worse.

You can calculate here for yourself, no "cheating" required: https://abrechnen.wko.at (official chamber of commerce calculator)

A GmbH is always better at 220k+/year. But there may be reasons you would want one earlier (liability, employees, IP, investments, ...)

Employing people in Austria is expensive ("cost of labor"). Beeing self employed is not bad, if you factor in benefits and costs of life and quality of life.

Re: Ask HN: How to increase SWE salaries in Europe?

#912

Post by mike_k »

dnpp123 wrote: post #342
drdaeman wrote: post #307

Earlier quoted context omitted.

> My net salary is just over 1000€ That's really low, even for poorer European countries. Decent middle-level software engineer in, let's say, Ukraine (no offense meant - it is a good country, just isn't one famous for high incomes), easily makes at least 2k (and I say "at least" - that's awfully underpaid). > that means that i'd need anywhere from ~8 to ~14 years to save as much as they could in a year That's a bit…

> That's really low, even for poorer European countries He said net salary. I know a lot of engineers from C schools in mid-size towns in France who are paid less than 2k euro net.

In Ukraine, however, the reality is that most of the engineers are employed as PE (private entrepreneurs) with some additional things included, like a decent insurance. And the overall tax for this scheme is just 5% so far. No other benefits or bonuses usually. So, NET almost always equals GROSS here. In absolute numbers it is something like USD 25K - 70K per year for junior - senior/TL range.

Re: Ask HN: How to increase SWE salaries in Europe?

#913

Post by throwaway894345 »

dragonwriter wrote: post #910
throwaway894345 wrote: post #908

Earlier quoted context omitted.

The argument is that home ownership isn't a worse risk-adjusted investment than stocks. If you know how to reduce risk in the stock market without correspondingly reducing your returns, do share.

> If you know how to reduce risk in the stock market without correspondingly reducing your returns, do share. If you want to do it without reducing your expected returns you diversify to products with similar expected returns and, to the extent practical, mutually independent risks.

I don't see how this can be true. If you're splitting your investment, your downsides are smaller but your upsides are also smaller, and presumably by the same amount.

Re: Ask HN: How to increase SWE salaries in Europe?

#914

Post by dragonwriter »

throwaway894345 wrote: post #913
dragonwriter wrote: post #910

Earlier quoted context omitted.

> If you know how to reduce risk in the stock market without correspondingly reducing your returns, do share. If you want to do it without reducing your expected returns you diversify to products with similar expected returns and, to the extent practical, mutually independent risks.

I don't see how this can be true. If you're splitting your investment, your downsides are smaller but your upsides are also smaller, and presumably by the same amount.

> I don’t see how this can be true.

How could it not?

> If you’re splitting your investment, your downsides are smaller but your upsides are also smaller, and presumably by the same amount.

Yes, and your expected return remains the same. Reducing variability isn’t “reducing returns”, because, as you note, what you lose from reducing the 50+nth percentile returns is made up for by increasing the 50-nth percentile returns.

Re: Ask HN: How to increase SWE salaries in Europe?

#915

Post by ByteJockey »

arcticbull wrote: post #273
ByteJockey wrote: post #250

Earlier quoted context omitted.

It's a pretty great way to provide healthcare, actually. My understanding is that european countries have pretty significant income taxes.

You may want to take another look. Healthcare in the US is twice as expensive per capita as most European countries while the healthcare system ranks near the bottom of the OECD [2, 3] and 11th out of 11 in a recent commonwealth fund survey [1]. For the first time, life expectancy in the US is actually going down. Even the best area identified in [2, 3] re: 5-year mortality for cancers is misleading as the US notorio…

And you think that raising salaries would ruin this somehow?

Otherwise it seems like raising salaries would help here, since the system would be better funded.

Unless of course raising salaries somehow screws up the system.

Re: Ask HN: How to increase SWE salaries in Europe?

#916

Post by s17n »

Izikiel43 wrote: post #330
s17n wrote: post #237

Earlier quoted context omitted.

A SWE might make like 5 times what a teacher makes but a CEO can make like 1000 times what a SWE makes (eg $50k for the teacher, $250k for the SWE, and $250M for the CEO).

What kind of CEO makes 250 million? Microsoft's CEO made ~44 million last year, and Microsoft is a trillion dollar company ( https://www.bizjournals.com/seattle/news/2020/10/20/microsof... .)

Sundar Pichai

Re: Ask HN: How to increase SWE salaries in Europe?

#917

Post by presentation »

marsrover wrote: post #337
presentation wrote: post #318

Earlier quoted context omitted.

My personal experience moving from CA to Japan is that despite the national taxes being higher than the USA, it pencils out to less than what I was paying in the US because of CA’s high tax rate, and I get a functioning healthcare system to boot.

Are you a developer in Japan? What is that like and what space do you work in? I’ll never be able to move to Japan but it sounds very interesting to me.

I'm working remotely for my startup I built in the USA, so I don't know personally what it's like at companies here per se, but as the other commenter said, wages are considerably lower on average - though I've heard that it's generally higher than the wages in Europe. Seems that $40-70k is a fairly normal first job wage for a bootcamper for instance.

The culture at companies is extremely dependent on the company - a traditional employer might expect the prototypically Japanese extreme deference/obedience to hierarchy, but it also seems that there are plenty of companies that "get it" and don't play that game, as well as the full set of FAANGs and foreigner-run companies that follow a totally different set of rules than the old school businesses here; and it's also subject to change considerably now that model companies like Toyota are moving to merit- instead of loyalty-based promotions, but that kind of shift takes a long time to take hold.

Your job options are much smaller if you don't speak Japanese, but jobs exist, I know people who have gotten them, and they tend to be in the international- or international-style companies. Wages for foreigners strangely are generally decently higher than for locals, I hear, even if not knowing Japanese is more of a handicap than a help lol.

Re: Ask HN: How to increase SWE salaries in Europe?

#918

Post by ricardobeat »

Aunche wrote: post #251
ricardobeat wrote: post #173

Earlier quoted context omitted.

As far as my experience goes, managers make about the same, or less, as an engineer at a similar experience level. They may end up at a higher compensation level if far enough in the career ladder, but I don't think it's significant in the bigger picture. The average CEO earnings in the Netherlands, including bonuses, is only 5x-6x the average engineer salary.

> The average CEO earnings in the Netherlands, including bonuses, is only 5x-6x the average engineer salary. What do you mean by average CEO? That's about the same as a CEO of a mid-sized American company. Shell's CEO makes a lot more than that, even considering the terrible year for oil.

The ratio in the US is reported as 320:1.

Re: Ask HN: How to increase SWE salaries in Europe?

#919

Post by digianarchist »

ano88888 wrote: post #300
KronisLV wrote: post #231

Earlier quoted context omitted.

That does sound like a pretty stress-free way to live! That said, living in Europe doesn't always equal good living conditions and stability - it depends on the particular country you're in as well. My net salary is just over 1000€ per month as a software dev. My living expenses eat up around half of that. If a quick search turns up that in USA the median salary for a dev is around 100k$ per year ( https://money.usne…

That seems really underpaid. I live in south east asia and my net pay is above 4000 Euro (excluding year end bonus which could be 6 to 12 months salary) . There is no social benefits though.

South East Asia could mean Singapore or Cambodia. Huge difference between those countries

Re: Ask HN: How to increase SWE salaries in Europe?

#920

Post by sguo35 »

iso1631 wrote: post #627
sguo35 wrote: post #212

Earlier quoted context omitted.

Lower income tax allows high earning engineers to found their own companies and become angel investors. This builds the startup ecosystem and makes it more self sustaining; new startups receive angel funding from prior employees that are moderately wealthy, and when they get big they fund the next generation. A social safety net is not a substitute for this because you can’t invest government welfare into your compan…

Income taxes for a $500k/year person in California is $210k Income taxes for a $500k/year person in Arkansas is $196k Income taxes for a $500k/year person in the UK $220k - but that includes healthcare Why isn't Arkansas the centre of the development world? Does skipping healthcare and increasing your takehome pay by 3% really make a difference? sources: https://goodcalculators.com/us-salary-tax-calculator/ https://l…

I said it was partially responsible; it is by no means even close to the sole factor by which startup ecosystems are formed. Arkansas lacks in education, research, and a number of other metrics that make it undesirable to develop in. Income taxes are only one part of the tax equation as well, since employers pay a larger chunk of overall taxes in France and other EU countries [1] compared to the US. Again, an employer (or startup) being forced to pay very high taxes on worker income gives a lot of incentive to reduce worker income and makes it more difficult for cash strapped startups to find personnel. Factoring in the employer side makes the tax difference more in the range of 10-20%, not 3%. That difference gets passed on to the worker, either in cash for large companies or in stock options for startups, since the software job market is highly competitive.

Healthcare costs for FAANG and other big tech employees (such as those that would be making $500k) are on the order of $2000/year or less. The company I currently work for covers all health insurance costs for me and I can choose to enroll dependents at a small cost per month. Again, adding high healthcare costs here for an engineer making $500k is unrealistic.

[1]: https://www.crfb.org/blogs/us-highest-taxed-nation-world

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