I'm a software engineer in Europe, and my firm is about to offer me a position in the US to bring up a team (In San Francisco or New York, it's still not decided yet)…
Though looking at the job market in the US the salaries do not match at all the European one, which look like being way higher than in Western Europe. It somehow looks like a ~€50-55k salary in Western Europe matches a $100-120k there. I know there are many things (like retirement, healthcare…) that are included in European salaries that are not in US ones.
So is there any way, any rule of thumb, that could help me match US salaries with Western European ones?
N.B.: as western european I'm mostly talking about France, UK, Germany, Belgium, for which the difference net and gross salary is about 75% on average. And I'm comparing salaries in IT market in metropolitan areas, of course.
After a mail I got from an user asking if I found a way, I found that there's still no good calculation in the answers. Let's consider the calculation from the answer I originally accepted through an example, let's consider the wage for an engineering job in Paris with a gross income of €50000 a year. And let's consider moving to SF, NY and Denver:
First let's make that income net of all taxes:
- 50000*0.77 = 38500 gross/net difference in France: 0.77
- 38500-3600 = 34500 net after income tax in France: 0.09
Then convert it to US dollars, at today's rate €1=$1,22:
- €34500 * 1.22 = $42021
Now, let's take the cost of living ratios (from expatistan.com):
- Paris: 231
- SF: 261
- NY: 263
- Denver: 180
So the adapted wages from Paris to target city are:
- SF: $47063 x1.12
- NY: $47483 x1.13
- Denver: $32356 x0.77
Then add income tax and gross/net ratio:
- SF: $50828.04 1.08, gross: $65314,03 1.285
- NY: $50331.98 1.06, gross: $64424,93 1.280
- Denver: $34297.36 1.06, gross: $43214,67 1.26
Which looks quite wrong to me!
In France, the engineering job market ranges from €30k to €60k (rarely more).
When I look at job offers in SF or NY (I didn't look much thoroughly in other places), I found out the range of the offers were from $80k to $120k (rarely more). Usually, those almost always include medical care and retirement.
So I ended up considering a non-scientific approach: take the european value in euro, double it, and you've got the matching wage in dollar:
- €30k/€40k → $75k-$80k
- €50k → $100k
- €60k → $120k
Though that "method" won't adapt well when euro/dollar value will change (which is very likely to be in 2015 with recent fall of oil price), it looks closer to reality than the former calculation. So either engineers are well more paid in the US than in Europe, or I'm missing a quite important cost in the former calculation!