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by fastbeef 2335 days ago
Not income tax, payroll tax, the tax the employer pays for having employees. Most people are not even aware of this existing. It the one marked “Employer” in this table:

https://en.wikipedia.org/wiki/Payroll_tax

3 comments

Its not a tax in Europe, but usually the companies share of social insurance. That is why the word payroll tax is confusing to us Europeans :-)

In Germany the company share of social insurance is another ~20% on top of the employees pre-tax salary.

It is not nearly enough to explain the wage disparity between SF/US and European salaries.

Exactly. 20% ON TOP of your salary. It’s baked in to the US salary. Sure, it doesn’t account for the whole delta but it’s not nothing.
It's fairly cold comfort to know that your employer is paying some taxes associated with your position that don't come out of your notional pre-tax salary.

What most people are interested in is how much of their pay is take-home pay. In the US, the take-home fraction of your pay will typically be somewhat higher. It's certainly not the case that software engineers in the US are getting bigger notional salaries but then paying a larger fraction in paycheck deductions than their European counterparts.

So e.g. in Denmark, Employer pays no tax for an employee, but still the salaries are nowhere near US.
Erm not sure what your talking about those us salaries don't have the employer side taxes either.