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Spotify is letting employees work from anywhere while paying SF and NY salaries

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Re: Spotify is letting employees work from anywhere while paying SF and NY salaries

#91

Post by sokoloff »

Smaug123 wrote: post #22
FartyMcFarter wrote: post #3

This could create a "golden chains" situation for employees, whereby they don't leave their job only because of the money, despite not being happy or as productive as they could be.

Isn't this an age-old story? Choosing whether or not to take a pay cut to get work you prefer? My initial reaction to "oh woe, my employer pays me so much that I don't want to leave!" is "… and this is a problem?"

If you find the work tedious or unethical and have arranged your finances such that you’re trapped into the bi-weekly drip of cash, I’d find that to be a problem.

Re: Spotify is letting employees work from anywhere while paying SF and NY salaries

#93

Post by eptcyka »

marvin wrote: post #33
senko wrote: post #29

PSA: 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…

I've never understood why there's a split between what taxes get paid by your employer and what taxes get paid by the employee - in the end, the employer pays all of them anyway. I'd like to know exactly how much money an employer would have to pay for a given amount of money landing in my bank account in a given time period.

Re: Spotify is letting employees work from anywhere while paying SF and NY salaries

#94

Post by samvher »

senko wrote: post #29

PSA: 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.

For many of the sibling comments discussing before/after tax: part of the confusion arises here because many European countries essentially have two steps of taxation. I work for an American organization as a Dutch person and have had to figure some of this out for my own contract situation.

For the Netherlands, your contract will state a wage "before taxes". But the employer will play "employer's taxes" over this wage, making you effectively ~20% more expensive. What gets transferred to your bank account is wage "after taxes", but this is after income taxes.

For example, say that your salary in the Netherlands is E50,000. Your employer pays E60,000 for that, but E10,000 goes straight to the government (doesn't show on your payslip, used to fund primarily social security systems). After that, you pay income taxes, let's say 30%, so you get E35,000.

Of course, effectively you're paying close to 50% taxes and your employer considers you as costing E60,000, but the two-step process hides part of it and makes it somehow more palatable for the employee/tax-payer. This is a really large part of why European wages are lower than American ones.

Re: Spotify is letting employees work from anywhere while paying SF and NY salaries

#95

Post by tester34 »

syshum wrote: post #86
nly wrote: post #20

Make hay while the sun shines. A true shift to remote work, should it happen, spells the eventual end of insanely high SF FANMAG salaries. Market forces will soon close these opportunities. My limited experience tells me people aren't prepared for homogenization of salaries across geographies: South East England, outside London: 1x London: 2x New York: 3x San Francisco: 6x On making hay: A friend of mine is currently…

Not even homogenization, for the US this will be the precurser to the next round of Layoff's, and all those people that took part in the #LearnToCode and other movements to retrain people displaced from other employment into Programming jobs / office style jobs are going to be shocked when their nice remote job is outsourced to another nation. Round 1 was the manufacturing Sector, Round 2 will be the office sector. E…

I hope you're right

That's what I'm looking for - increasing salary 4 times for similar stuff while having living costs of 400-500 USD / month

Re: Spotify is letting employees work from anywhere while paying SF and NY salaries

#97

Post by pjc50 »

lanevorockz wrote: post #24
nly wrote: post #20

Make hay while the sun shines. A true shift to remote work, should it happen, spells the eventual end of insanely high SF FANMAG salaries. Market forces will soon close these opportunities. My limited experience tells me people aren't prepared for homogenization of salaries across geographies: South East England, outside London: 1x London: 2x New York: 3x San Francisco: 6x On making hay: A friend of mine is currently…

That is true, it might be the end of the sustainability of overpopulated cities ...

Where would people go? Underpopulated cities? Rapidly expand towns?

Re: Spotify is letting employees work from anywhere while paying SF and NY salaries

#98

Post by superbcarrot »

tpetry wrote: post #66
Cthulhu_ wrote: post #49

Earlier quoted context omitted.

It sounds like you don't think people doing the same job you do don't deserve the same pay. It comes across as classism to be honest, looking down your nose at people because they don't live in the most expensive areas of the country.

You do understand this wrong! The message is that any startup/company not in the valley will have a hard time finding employees. Until now every company paid a salary fitted for the locale the company is in: You are in an area with a low cost of living you are paid a lower salary than elsewhere. But from now on you can get the inflated valley salaries from everywhere. They are so high because cost of living is very h…

> But from now on you can get the inflated valley salaries from everywhere.

You can't. Spotify are an exception and I doubt that they'll keep this up long term or that many companies will follow.

And I think that that people overestimate these effects in general - the most likely outcome is that the salary distribution gets smoothed over to some extent i.e. big-city salaries go down a bit (or don't rise as high and as fast), remote and lower-cost areas see some increase in salaries but to a limited extent. But at the end of the day SV and big cities will still offer the best compensation, just with a smaller delta between them and the rest of the market.

Re: Spotify is letting employees work from anywhere while paying SF and NY salaries

#99

Post by wooger »

0_____0 wrote: post #57
lanevorockz wrote: post #24

Earlier quoted context omitted.

That is true, it might be the end of the sustainability of overpopulated cities ...

Funny because cities are more efficient from an energy and carbon footprint perspective. The only thing that makes it unsustainable is that some cities haven't figured out how to make it so everyone who should abbe able to live there can afford it

They're already more efficient though, and there's no benefit to the current residents (tech rich or not) from massive incoming population growth.

There won't be equivalent investment in services, recreation, leisure facilities to cope, so they'll degrade.

Re: Spotify is letting employees work from anywhere while paying SF and NY salaries

#100

Post by Majromax »

marvin wrote: post #33
senko wrote: post #29

PSA: 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…

No, the United States does not have high employer-paid payroll taxes. The employer is responsible for about 8% for social security (pension) and medicare (old-age health care) taxes, but only income up to $150k/yr is subject to this tax.

States also assess a payroll tax to pay for unemployment benefits; this varies by state and industry. It is also subject to relatively low income caps, especially compared to tech-sector salaries.

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