[throwaway13000]

Can someone here explain why companies pay only 40% of US salaries in India? One person from my team is leaving for India soon. He is paid $200k/yr currently in Bay area. But he is being offered INR50 lakhs which is roughtly $80k USD. What stops MS from paying something like $120k USD (converted to INR) because fully loaded costs in US (with FICA taxes) is abot $250K?

Especially, if the quality is the same in both places?

[paulstovell]

Assuming $80k is market rate in the new location, if this person was paid $120k it creates another kind of risk: the person might be disgruntled and hate the job, but never leave, because they aren’t going to get $120k anywhere else.

As an employer the ideal is to pay at or slightly above the market. Enough to make money a non-issue, but not so much that people who secretly hate you still work for you.

[gretch]

Supply and demand.

MS could afford to pay more as you said... but why should they? Does your friend seriously consider leaving MS in India? If so, use that as leverage to negotiate. If not, then clearly MS should not offer more money

[chillacy]

Not just India, tech salaries are pretty low even in the UK, much of Europe (except Switzerland) and even next door in Canada.