I can't see a reference if this is for current employees only or will be applied to future hires as well.
Does anyone have more details?
Spotify is letting employees work from anywhere while paying SF and NY salaries
31–40 of 414 posts
Re: Spotify is letting employees work from anywhere while paying SF and NY salaries
#32Do they pay those salaries in Europe? Because European salaries are usually 1/3 of the US rate.
1/3 is too little
No, a person making 120k$ in NY is not making 40kEUR in a western European city. Maybe half of that, sure. But not 40k (even if you account the EUR-USD diff)
Re: Spotify is letting employees work from anywhere while paying SF and NY salaries
#33PSA: When comparing US and EU salaries (or anywhere, really), use total cost to employer (excluding fixed office costs), or total benefit to employee (incl. taxes paid in their name and health/retirement costs). US salaries are mostly discussed before taxes, while often for EU countries it's after taxes and/or after mandatory health insurance and retirement savings.
Does the US have significant employer tax?
A data point from Norway: Employer tax of 14% of pre-tax salary is paid by employer. Employer also has to pay 2-13% (dependent on individual negotiation) of pre-tax salary for retirement savings. These are both part of the cost to the employer, and are rarely considered part of "total compensation". So employers have to pay an extra 16-27% of each person's salary in addition to what the employee gets.
An 8% tax for compulsory retirement savings is then taken from the employee's pre-tax salary, along with other individual taxes, that will usually sum up to around 33%. This is not part of the cost to the employer. The number before these taxes are subtracted is usually quoted as the person's salary.
Although for a US comparison, few employers in Norway have significant expenses for health insurance. And the cost of US health insurance, a considerable percentage, is rarely considered part of your "total compensation".
Re: Spotify is letting employees work from anywhere while paying SF and NY salaries
#34FWIW we [0] employ a lot of people in the EU working remotely and a large part of them earns SF/NY salaries. Probably a strong selection bias to the types of companies that choose to work with us. [0]: I'm the CEO of remote.com
I couldn't help but remember the classic IRC exchange: http://bash.org/?258908
Too bad that employee's poker face was lacking
Re: Spotify is letting employees work from anywhere while paying SF and NY salaries
#35Maybe they should pay their artists more, instead of their employees.
Re: Spotify is letting employees work from anywhere while paying SF and NY salaries
#36I just hope the home office trend doesn't lead to an urbanization of the countryside. I'm from a charming village that was overtaken by ugly and expensive developements during the past 20 years because people from the nearest city realised it was within commutable distance.
I die a little inside every time I see someone oneline saying "I can't wait 'till X area has better internet so I can move there", understand "I can't wait 'till X area has better internet so 10k people can have the same idea as me and turn this rural community into a city".
Now in bigger countries (the US, France, Germany, etc.) there will always be cheap rural areas left (though the most desirable areas will probably urbanize and/or become completely unafordable for workers of the primary and secondary sector) but I'm very worried for smaller countries like mine where rural areas are already sought after as of now and it's only going to get worse.
Re: Spotify is letting employees work from anywhere while paying SF and NY salaries
#37PSA: When comparing US and EU salaries (or anywhere, really), use total cost to employer (excluding fixed office costs), or total benefit to employee (incl. taxes paid in their name and health/retirement costs). US salaries are mostly discussed before taxes, while often for EU countries it's after taxes and/or after mandatory health insurance and retirement savings.
> US salaries are mostly discussed before taxes, while often for EU countries it's after taxes and/or after mandatory health insurance and retirement savings. Citation? I think pretty much all salaries discussed in Europe was before tax (Stock option on the other hand are usually not counted)
This is country specific but in many European countries there are employer's and employee's social deductions. Usually salaries discussed are already without employer's part, but with employee's ones. Taxes should be taken away only once AFAIK.
So salaries discussed/negotiated will still have in them 1) tax; 2) employee social deductions; 3) health insurance. This is deducted, and result goes to employee's account. In many places, its cca 50% or less that gets into account depending on many things (state, family situation, type of employment etc.)
Re: Spotify is letting employees work from anywhere while paying SF and NY salaries
#38PSA: When comparing US and EU salaries (or anywhere, really), use total cost to employer (excluding fixed office costs), or total benefit to employee (incl. taxes paid in their name and health/retirement costs). US salaries are mostly discussed before taxes, while often for EU countries it's after taxes and/or after mandatory health insurance and retirement savings.
Having worked in many EU countries, I've never once had salary quoted or discussed after tax.
Re: Spotify is letting employees work from anywhere while paying SF and NY salaries
#39Re: Spotify is letting employees work from anywhere while paying SF and NY salaries
#40PSA: When comparing US and EU salaries (or anywhere, really), use total cost to employer (excluding fixed office costs), or total benefit to employee (incl. taxes paid in their name and health/retirement costs). US salaries are mostly discussed before taxes, while often for EU countries it's after taxes and/or after mandatory health insurance and retirement savings.
> US salaries are mostly discussed before taxes, while often for EU countries it's after taxes and/or after mandatory health insurance and retirement savings. Citation? I think pretty much all salaries discussed in Europe was before tax (Stock option on the other hand are usually not counted)
Before tax but after retirement savings (or most of them, e.g. in Italy it's about 4:1 with the employer paying the larger part). Depending on the country after healthcare costs too, since often healthcare is simply financed from taxes (if not, anyway it will be lower and also come with hardly any deductibles).