We are getting absolutely fleeced by our American counterparts and paying higher taxes on top. Yet we're every bit as good developers, DevOps Engineers, SREs, you name it in tech. And cost of living in US metro areas vs Europe does not even begin to explain why. I wish we'd collectively take a harder stance on the bargaining line because it is insane to me we be paid half, a third less and then shell out very high taxes on top (OK Bulgaria you get a pass).
Pay always comes down to supply and demand of labor, not value added.
If you have a button that earns $1m a press, its a pretty valuable role to press it, but you can also hire literally anyone to do it. So pay for pressing the button can be quite low despite large value creation. Now, if only one person is eligible to press the button, he can easily negotiate up to $1m a press for himself. Same work, lower supply of labor.
For a long time, in person work and demand for people in SF Bay area led to major wage inflation in US tech jobs. I was there through the 2010s and saw firsthand what seemed to be 15-20% wage inflation YoY for many years.
With remote work that future is looking more tenuous. There are lower cultural barriers to having teams collocated in different timezones now that most people are remote in general.
So wages are likely to normalize somewhat over time… likely flatish in nominal terms for US workers, but down in real terms until other locales catch up. There’s still going to be a preference to hire US workers in a remote world, but the effect is going to weaken a lot.
Such high pay in real terms for people with minimal YoE is going to be considered an aberration in retrospect
Good point, we are seeing a lot of layoffs in bay area amand other HCoL locations in the US but at the same time hiring is still going strong in Eastern Europe and India. Typical outsourcing destinations where you can get a developer for fraction of the price. We can debate about quality but for sure countries like Poland have lots of developers that are on a par with best ones in Bay area
You can't have your cake and eat it too. You like your social safety net? You like stronger worker protection? Long vacations? Someone has to pay for all of it. Either through higher taxes or lower wages.
I have to take out salary insurance because welfare benefits wouldn't even begin to cover living expenses. You have such a thing in the US too. In Denmark, it's easy to fire and easy to hire (let at hyre og fyre [1]) so what am I liking here? At US Google I understand it's 30 days paid time off a calendar year: that's the same standard as Europe.
Yet Google will happily pay the same role less than half when hired here.
I've done my research: this is cultural inertia, as another commenter alluded to. "We pay this much because that's what the market rate is for [country in Europe]".
You are comparing outliners (big tech with huge salaries and outstanding benefits) with every employer in Western(?) Europe. How much does it cost to provide 6 weeks of vacation to everyone in the country? The senior engineer in Europe will have to support more people through taxes.
The market rates are lower because there is no market. FTA I only recognize one European company with somewhat global reach (booking.com). Europe doesn't have multiple companies trying risky businesses and competing for the top talent. European values (focus on equality, stability, WLB, etc) are in part responsible for this.
I don't have an answer for this, but I know that in Poland, there are numerous engineering offices located outside of Warsaw. Engineers in these offices are paid well compared to the average Polish salary. These variations in compensation are influenced by market forces.
While engineers may be more affordable in Europe, there are trade-offs to consider. One such trade-off is the significant time zone difference between California and Europe, making synchronization challenging. Additionally, cultural synchronization can be difficult, and there is significant value in having teams that share the same figurative and literal language.
You could take away Europe's social safety net and wages would still be lower. There is no equivalent to Silicon Valley there which creates the competition that bids up salaries.
>You could take away Europe's social safety net and wages would still be lower.
That's true, however the strong employee protection laws are definitely a factor that keep investors looking for safer returns like real estate rather than putting their money in starting a risky business in Europe.
If you had 1 mm USD/EUR/GBP to start a tech business, would you rather put it in a country where employees have high salaries but almost no rights or benefits by law, or in a country with lower wages but where you have the added risk to your business by all employees have stronger rights and benefits so your star coder could always spontaneously take his parental leave or his month long vacation break whenever you need him the most because "that's his legal right".
It's sad but true. Employee protection rights are good, but they do discourage investments. The fact that US has almost no employee rights does encourage investing in labour there.
I am not sure what are you trying to say. Your link says people in need are getting energy subsidies and direct payments. Do you believe that the number of people skipping meals will be lower without the safety net?
You can earn close to the average American techie in the EU, either by getting one of the better jobs here or working remotely for US/Canadian companies. Both of those options get you in $150K base range, which is what most roles in the US offer.
Getting $250K is also attainable if you freelance, which is better than 90% of companies in the US pay.
Which European companies in which countries pay 250k for freelancers? I've never seen anything like that in my area.
Top I saw was about 170k a year but then you gotta pay taxes on that, pay for healthcare and pension contributions out of pocket, account and budget for vacation days and sick leave and the 170k become much much less in take home pay.
This is in the Netherlands. $250K with 4 weeks vacation at 40 hours/week is about 120 EUR / hour, which is slightly above average somewhere like a bank.
Healthcare is only about €1300 / year. You can choose to build a pension, but you save on taxes compared to regular employees and can deduct things like business internet and electronics, so it's pretty close to the same in a regular salary.
It is not ok, but I cannot see it change soon. You can change things though for yourself at least, however, people seem to not want to change and want the government to fix things for them. I expect that as well when I vote for a party that has this on their program, but I know it won’t happen. I have always (since begin 90s) made Silicon Valley wages in the EU, but that takes some effort; hard bargaining, being cocky (consistently overselling yourself; I am not particularly talented as a programmer but I always get paid more than most of my colleagues, including ones in management), having an agency (which made wfh possible for the past 30+ years, so I don’t need to throw my money away on renting/buying in a city), being smart with taxes, smart investing and not live in a big, expensive country or city.
From my salary alone I am over Silicon Valley higher bracket earners and that’s salary. Most Silicon Valley posts say they earn $x but that’s including stock options etc. It is really more that EU people seem very risk averse and waiting for ‘things to improve’ by some type of magic. I might be a cynical old guy, but I accepted they won’t and you have to do it yourself. Which means you need to make some sacrifices to make it work more like the US but with the benefits of the EU (mostly; simply healthcare without needing insurance, free uni and working 4 days or less with a lot of vacation and still making more than most Americans). I realise you and most others here will do things to change the way you live, that is fine, but then things will remain the same and your gov or the eu gov is not going to change that. The options are already there if you search and they have always been like that in IT at least.
I worked for varios European companies in the US traveling often and for long periods of time to Europe for work.
I must say at least in places like Austria and Germany things like groceries, utilities and eating out seem to be considerably cheaper (and much better).
I'm currently paying $250 per month for water in the US for a household of three and this is not in San Francisco.
We also work more hours in general.
My counterparts in Germany had over 30 vacation days and at least one holiday per month.
Taxes here are lower, but just because we pay other big expenses ourselves such as health care.
But the real hit comes when you add kids.
In Germany it seems you are given even more paid time off work to spend time with your kids and travel with them which is awesome, besides your employer picking up some of the bills like education.
Forget that in the US. Here you are on your own. $chool, extra curricular activitie$, nannie$. Money money money.
Some european countries enjoy very high standards of living and great services and infrastructure, and that cannot possibly be free.
So salaries as a metric alone are meaningless, at the end of the day what matters is how much money is left in the bank after you pay all the bills to keep up with a certain life style. In the US a decent, not even a good life style costs a lot of money, almost like a hidden tax you need to pay.
Taxation is highly dependent on location and personal factors (single income vs double income household) and other factors that are irrelevant in this context.
Also "benefits" in the American sense aren't really a thing in the EU.
> I think like 60+% of engineers get company cars.
Honest question: How useful is when we frequently hear that Europe doesn't use cars as much as in the US? I can't fathom someone in a major European city finding much use for a car.
Very usefull. Many people live outside the city centers (which are very small in Belgium) and use cars to commute.
Public transport is relatively good within a city, but if you come from outside the city it can get really bad. 20 min by car can be 1 hour by bus for example.
It is but at a hilariously cheap rate. It’s pennies on the dollar (or euro, in this case) compared to owning a car outright.
It’s a fringe benefit that was invented in order to enable employers to sweeten the pay package without having to straight up pay more, and respectively pay a lot more taxes.
We’ve a large bunch of these tax efficient fringe benefits in Belgium but the company car is by far the one that provides the most value.
Yup, so Belgium has a lot of weird things like that, but it's really hard to take it away since it's such an important part of salary for many people and taxation is really high so most people are very opposed to losing benefits like this.
Yeah healthcare is for sure better in EU and so less of a benefit, but I still get additional insurance through my company and most white collar jobs do. It's for the extra costs of hospitalisation such as upcharges for a single room and other costs general health care doesn't cover.
I stopped paying attention to these sorts of stats when I realised it’s far more effective to focus on improving what I’m making in a way that doesn’t compromise other things I value in life (leisure time, location, type of work, etc) than it is worrying about what people in other economies make with no context.
The figures are inflated because they focus on outliers. The vast majority of employers in EU are plain boring companies, telekom, industrial, automotive, and products that have a market but not that of Google, Facebook, Amazon. There's little difference between the salary of a software developer and that of a teacher or police officer, developers in EU here are less of a privileged caste isolated in their hundreds of thousands of dollars per year bubble.
I myself live in Eastern Europe and make €60,000 per year gross, which is about the median pay for a developer in Western Europe. Tax rate is 35% so I'm left with =~ €40,000 net. Apart from real estate, prices are on par with Western Europe, meaning that food, energy, transportation cost about the same. I could make more but that would erode my competitive advantage, the employer needs to feel they're getting a good deal, so I also don't need to go above and beyond to prove myself, just do my job. With work from home there are also other possibilities which I won't discuss here, only that they landed me another €30,000 net last year, there's a saying in my native language which goes about "the gentle lamb sucks on two sheep" ;)
What makes the difference is real estate, my 65 square meters apartment + garage sells for about €100,000 and I'm renting another one as my home office for €300 per month (not including expenses, which add up to another €200 in the winter). My cousin who lives in Paris owns a 30 square meters apartment evaluated at €300,000+ and was asked a million euro for an 80 square meters one. Ridiculous if you ask me, he doesn't make vastly more than I do, in order to be able to afford the larger one.
>I myself live in Eastern Europe and make €60,000 per year gross
That's a very good salary for Romania. Can I ask your seniority level. DO you work for a company on a local employment contract or freelance for outside remote companies?
Yes, it's in the high range, but I have 20+ years of software development experience, C++ and quantitative finance although I only do the former now because I was getting the same money as doing just development and working twice , with the latter being particularly nasty stuff. Also Java and lately Kotlin (Android).
The €60k are on local employment contract. Besides that I get the odd remote freelance contract, usually because of my trading and quant finance domain knowledge.
That seems way more realistic.
The salaries in the original article are not common at all for software development positions in Europe as far as I know ...
The legal minimum is 20 working days, though. The people in tech I've met in Berlin are getting anything between 26 and 30. My contract starts with 27 days and this number will be raised every year I'm working there till it reaches 30.
Legally is zero days in the US. I met people with 3-5 days per year. Most companies give you 10 days to start so that's considered standard. It took me 15 years to get to 20. There are some exceptions of course with a generous amount of days or unlimited vacation, but the vast mayority of corporations in the US go with 10,15,20 and maybe 25 once you spend 30+ years with the company.
Also Switzerland (or Scandinavia for that matter) which pays similar to the US for tech jobs. Even academic jobs here pay exceptionally well compared to anywhere else in Europe. Starting salary for a good data scientist role (requiring some domain expertise) here is close to 100k CHF (not including Big Tech who can easily pay 1.5x more). Cost of living is high, but frankly London is comparable in terms of rent nowadays if you consider like-for-like (i.e. centre of the city, short commute).
Pretty much yeah. The price for groceries or bills don't differ too much between EU countries at this point, but the price of real estate and having your own place either paid off or secured at a good price and a good rate makes the biggest difference.
Earning 50% more before tax somewhere else is not a good deal if there's 200 people fighting for every moldy 20sqm apartment that hasn't seen a renovation in 50 years, and you also no real chance of affording to buy something decent in that area.
Real estate is messed up in EU at the moment. Far too expensive considering the wages and rates.
cost of living is highly relevant when you compare salary data because it's one of the primary factors that determines the cost of labor.
If you pay a Berlin salary in SF nobody's gonna show up because that doesn't cover your apartment rent. It tells you little about how much you effectively pocket. If you want to get some use out of this data you need to adjust it for purchasing power.
You’re right. Which is why it’s great that this link was posted. You can now take this available data and combine it with you understanding of the CoL on the various locations. Otherwise you’d only have a feel for the CoL.
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