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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!

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“Western Europe” is meaningless in this respect, there are huge differences even between, say, France and Germany (for a given salary, take-home pay is much lower in Germany because in France a big part of the contributions to the healthcare and pension systems are not included in the before-tax salary as defined in contracts/negotiations but paid on top of it by the employer, income taxes are very different too). –  Gala Mar 19 '14 at 11:50
You want to match in terms of cost of living or in terms of similar job? In the first case, I do not see the link with salaries, what you would want to know is the cost of living in the US. In the second case, I don't see why there needs to be a match between countries: only the US job market matters. Overall, I think you need to clarify your question and I am not even sure it is in the scope of this site. –  Vince Mar 19 '14 at 12:18
@Vince All true but you do need to get a sense of what your take-home pay is going to be, too. It's only then that you adjust that based on the cost of living. –  Gala Mar 19 '14 at 12:34
@GaëlLaurans I precised western europe by being the few countries I know about, which have a gross/net ratio of 70% (77% in France, 60% in Germany, about 70% in UK…). My question is about having a reference to have in mind when I'll be negociating my jobs with my employer when I'll move from EU to US. So as Vince suggests, indeed the constant could be the "take home", I'm pretty sure cost of living has an influence. –  zmo Mar 19 '14 at 13:23
"Western Europe" might be vague for exact comparison, but definitely answerable in more generic sense. Generic answers are generally preferred on StackExchange, as they'll serve wider audience. –  vartec Mar 19 '14 at 13:54

3 Answers 3

For a general idea, I recommend this formula:

CurrentSalary EUR * 1.39EUR/USD * CostOfLivingIndexValue of SF or NY.

If you make 50k EUR, that's about 70k USD. SF and NY are about 1.6 times more expensive than the average urban city in the US, so you would need $112k.

This doesn't really take into account differences in quality of life (vacation, healthcare, etc.) If you really include those (which are hard to calculate a value of), then you would need a lot more US salary. Also, "retirement"... your retirement plan is for you to put a % of each month's income into a 401K or other long term pre-tax investment vehicle. There is no pension system like you may be accustomed to.

True you will be taxed less in the US, but you'll get less as well - less availability of public services, transportation, etc.

I went the opposite direction, using roughly the reverse calculation; and I can say I'm getting more from my income here than I did in the US (not counting the extra weeks of vacation).

share|improve this answer
Maybe the company still maintains the pension from the homeland? –  staticx Mar 19 '14 at 12:49
"getting more from my income here" - as in Europe or where is "here"? –  Dennis G Mar 19 '14 at 12:58
wouldn't you have to compare the cost of living index of your home city with that of (for example) SF? –  Tim Seguine Mar 19 '14 at 13:17
that's an interesting calculation, indeed and pretty helpful. Of course I'm aware of the differences of quality of life, and I'm going to negociate my contract so I can keep things simple such as having the pension and healthcare handled by the firm. I've seen on many job offers that firms can offer that :-) –  zmo Mar 19 '14 at 13:27
where do you get the "cost of living index value"? –  zmo Mar 19 '14 at 13:36

I do not exactly understand what you want to know, if you want to estimate the salary you need or you can expect in the US (which are 2 different things).

But I can still give you clues about the differences of budget between these two situations. I spent some time in SF and live in France. The things I noticed when it comes to comparing salaries and budgets between the two countries are that:

  • food has overall the same cost
  • rent is easily higher in large US cities than in France, and France has higher rents than Germany. Rent represents a large part of a base budget
  • going out is in the same range of cost, maybe a bit more expensive in the US
  • "culture" is more expensive in the US because not as subsidized
  • transit cost (commutes) are more expensive in the US: depending on where you live, you will require a car (which is not cheap) or pay for a transit pass that is relatively more expensive than in Western Europe (in the hundreds of dollars, not in the tens of euros as in many French cities)

But overall, the main difference is about the "package". Your net salary in the US includes less aid than you can expect in Europe: in particular less health coverage, less education subsidy, less child aid, less retirement pension. These expenses are very dependable on any person and can represent a large amount. If you have to pay for your family to live with you, the cost is way higher in the US than in Western Europe. You should pay attention to these costs.

So overall, to compare a Western European salary and a US salary, you should be careful to the rent, commute, and your family situation. If you have a need for education (for you or a family member), for health coverage, for things related to kids, the cost is very different so a US salary might not give the same benefits.

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"pay for a transit pass that is way more expensive than in Western Europe (in the hundreds of dollars, not in the tens of euros)", actually I find it to be much cheaper than the Netherlands. For example Caltrain 3-zone monthly is $179.00, while similar NS monthly would cost around €350 ($490), single fare ticket on tram/bus in SF is $2, in Amsterdam it's €2.80 ($3.90). –  vartec Mar 19 '14 at 13:01
Yup sorry I hesitated on that. It is cheaper in France. And in SF, you will also have the Muni/Bart or any other city transit pass so you can count 300$. Unless you never move. I edit the answer to make it more relative. –  Vince Mar 19 '14 at 13:05
eh what? 179 + 66 or 76 + bart to non SF places easily makes for much money. But it is more of a relative difference anyway. In Lyon, second city in France, it costs less than 30 euros per month after your employer pays half of it (by law). So it represents a 10x factor. In London or as you mention, in Netherlands, I suppose the difference is way lower. –  Vince Mar 19 '14 at 13:19
In London a zone 1-2 monthly pass is little over £110. Transport is expensive, but I definitely offset that cost by not having to own a car. Of course, YMMV. –  voyager Mar 19 '14 at 14:31

Of course, the salaries you're talking about here are gross (as in pre-tax), so obviously first step would be to calculate net salary. In US you have to components of the income tax, first the federal tax, then in some cases state tax (California is one of these states, and actually has the highest state tax of all). BTW. what's generally called net income in Europe, in US goes by name of take-home payroll. Example of take-home calculator for California.

You can get rough idea how far given amount of net salary will get you on sites such as Numbeo or Expatistan, which compare cities on cost on living index. Both sites offer option to directly compare two cities in details. Neither gives you complete view, and should be taken with a grain of salt, as it's based on basket of goods and services which don't necessarily reflect your spending. According to cost of living in SF rough similar to Paris — actually SF is 3%-4% cheaper according to comparison by Expatistan and Numbeo. Note, that in this case it really depends on your rent vs. other spending ratio.

In Europe you're usually under some public healthcare plan, in case of US it's private insurance, so that's something that you have to take in account. But in case of Software Engineering jobs you're probably in luck and employer most likely provides that for you, maybe even (at least partially) for your whole family.

As far as days off go, in Europe you have your vacation days, depending on country and your work experience that's anywhere between 18 to 30 days and it's usually regulated by law. You have also right to sick leave that is completely independent of your vacation days. It's not unusually to be whole month off in the summer. On the other hand in most companies in US they have single concept called PTOs (payed days off), which are both vacation and sick days. It probably depends on company culture, but typically you're not expected to use all PTOs (contrary to Europe, where you're expected and even obliged to use all your vacation days). It's also not very typical to have very long vacations.

Retirement founds in US are private, there is 401(k) scheme which makes that tax deferred (i.e. you pay tax on your pension while receiving it, not while investing). IMO for any highly skilled worker with reasonably high salary is actually a good thing compared to European public retirement systems, as in public retirement systems ROI is absolutely terrible, few times less than the worst of private funds.

As far as public transport, don't know about NYC, but SF and whole Bay Area has excellent system with Caltrain, BART, metro, trams and buses. I find it to be relatively inexpensive comparing to for example Amsterdam. For example single bus fare is $2 in SF, €2.80 ($3.90) in Amsterdam, SF Muni & BART monthly pass is $76, roughly equivalent 3-zone Amsterdam GVB monthly pass is €119.50 ($167).

share|improve this answer
A single bus fare is not €2.80 in Amsterdam. It's far less: €0.87 + €0.148/km. For a 3 km bus trip that'd be €1.31 ($1.83). The €2.80 that you quote is for 1 hour of unlimited travel. There are far cheaper options for most users. –  gerrit Mar 19 '14 at 18:01
Another aspect to consider: if a city is cyclable, that can make a big difference in commute costs. –  gerrit Mar 19 '14 at 18:05
@gerrit: €0.87 + €0.148/km with OV chipcard that itself costs €7.50 and you cannot buy it on tram. BTW. the $2 fare in SF is 90 minutes unlimited. As for cyclability, SF not only has bike lanes, but also city bikes bayareabikeshare.com –  vartec Mar 20 '14 at 1:04
"Payroll taxes" generally refer to FICA and unemployment insurance contributions, which are in addition to withholding for income tax. Also, in some places you must pay a local income tax (e.g. Maryland to the county, in New York City to the city) plus a commuter tax, neither of which appear to be common in Europe. –  choster Mar 25 '14 at 0:40
@choster: you're right, will edit –  vartec Mar 25 '14 at 9:37

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