[junon]

Gross = before expenses/taxes. Net = after (which, specifically, depends on the context).

Always negotiate your compensation in gross. Always negotiate hourly in hours, salary in years or months (most places prefer the former, but depending on your country it might be customary to discuss in the latter). A multiplication/division by 12 is usually sufficient.

Hourly pay means you work time, you get paid for exactly that time (give or take 15 minutes sometimes, usually it's rounded, often up to the next hour). Payments usually made every two weeks or every month.

Salaries are paid at a fixed frequency, usually monthly - sometimes, in very very rare cases, semiannually or even annually. Don't bother asking for a different pay schedule as it's generally company-wide and very difficult to change, and it also shouldn't affect you if you manage your own money correctly - the amount of money you make on average over time remains the same.

The reason for gross is, as you mention, taxes. Your specific situation affects how much you contribute to your community/country (via taxes), and the percentage/amount usually changes over time as your living situation changes (you get married, have children, get a raise, etc).

Your employer can't possibly know all of this in most cases (namely in the US, but also elsewhere) and also it's not their burden to manage your taxes (again, usually - namely in the US).

Your job is "I do services, you pay me for those services". The company needs to know how much they're paying for your services. How that income breaks down for you is your own deal.

Imagine a case where you're in a high tax bracket because you have a lot of successful side gigs. Your employer, paying net, would thus have to pay you more in order to keep the rate competitive for you, simply because you make more elsewhere. The employer loses out pretty heavily in this case. Just doesn't make much sense to do it that way.

[throwaway09223]

Yes, and to build on your comment regarding the employer's lack of knowledge and control over taxes: Equity comp also means the employee has control over when they get compensated.

Maybe the employee will sell equity as it vests, maybe they'll keep it and sell it all ten years later. These choices will all drastically change the tax situation.

A good employer will work with you as a team to help you realize your financial strategy.

[seattle_spring]

> Equity comp also means the employee has control over when they get compensated.

I wish that were a universal truth, but it decidedly does not apply to RSUs which most equity compensation comes in the form of.

[junon]

> which most equity compensation comes in the form of.

* location depending.

This is certainly the case today in some places, but has not been the norm in most places (unfortunately).

[throwaway09223]

The control is somewhat reduced, but not entirely. While the employee is forced to pay tax at vest, they can still retain the RSU and sell later.

[seattle_spring]

That's the exact same thing as getting a salary and buying stock with it.

[junon]

Yes though equity is a whole different discussion :D I wouldn't be comfortable making recommendations there since the world of equity is big and hairy and it's hard to give generic advice that isn't harmful in some situations.

[BrandoElFollito]

In France (and broadly speaking, in Europe) you are better off negotiating net before taxes.

We have plenty of deductions from our gross that are compulsory, before getting to the net before taxes. It means that the x€ you hear is actually x€*0.6 or less.

Bringing the number down to what actually hits your taxes (and then your bank account) makes the proposal look less grandiose.

[Amezarak]

It's actually just the same in the US - my net salary is exactly 0.6 my gross salary. I've never heard of anyone negotiate by net here, but they should - it would probably be very difficult though.

[BrandoElFollito]

This is before taxes.

We have gross minus "various debits for retirement, health care, etc" (fixed, a percentage of the gross) and then minus income taxes (that vary from person to person)

[jusob]

Except there are a lot of ways to change what is taxable in the US: 401h, HSA, FSA, etc.

[BrandoElFollito]

This is before taxes.

We have gross minus "various debits for retirement, health care, etc" (fixed, a percentage of the gross) and then minus income taxes (that vary from person to person)

[Amezarak]

Yes, it works very similarly in the US.

You have your gross salary - let's say, 100k.

From that, before taxes, is deducted the employee health insurance premiums (may be $0 to ~10k), employee retirement contributions (up to 19k), perhaps health savings account contributions (up to 7k), and possibly some others. Obviously, these can be quite substantial! But, at least, some of them are "optional" in that you are, for example, free to underfund your 401(k).

After that, federal and state income taxes are taken out, and a special tax for Medicare and Social Security.

Many of these are impacted by the vagaries of each employer. If you know your pre-tax income, you can easily calculate your taxes. But figuring out what your pre-tax income will be is not something you can figure out from the headline gross number. The biggest factor is the employer health insurance plans and your expected premium contribution - getting this out of an employer before being hired is like pulling teeth.

Although HSA and 401(k) contributions are elective, so you'd think you could determine that ahead of time...well, if the employer doesn't have a HDHP, then you don't get an HSA at all. Conversely, if they do, the amount of the deductible and the amount of the possible employer contribution (which counts toward the maximum allowable contribution by the IRS) factor into how much you expect to come out of your pay check. This is also tough info to get out ahead of time. 401(k) contributions fall into a similar but less severe problem - there's often an employer contribution, but it counts toward the allowed maximum, so you cannot determine from your gross salary alone how much you will be contributing toward your 401(k), even if you know ahead of time the dollar amount you want to contribute. Employers are often a little better about telling you their 401(k) contribution benefits ahead of hiring, though.

[BrandoElFollito]

Thanks for the details. In our case it is easier.

You have the gross that is the usual negotiating point because the number sounds larger.

Then there are compulsory deductions (national, the amount decided by the law). They cover health insurance, disability, retirement, ... The amount deducted from your salary is also (for the most part) paid by the employer (same amount).

To this may be added extra money, again regulated by the law which is a percentage of your "gross before taxes" (above) - this is dependent on the size of the company, inflation, etc. (intéressement et participation)

We are now at "gross before income taxes". These taxes change between people (married, children, some specific renovations in your house, ...) but for the vast, vast majority of people (probably 95%) they are pre-calculated and you go to the national tax site, click next a few times and you are done (literally 3 minutes). The taxes themselves are deducted by your employer.

So what you get in your bank account is really a net amount you can spend. It is substantially smaller than the gross (about 50% I guess) and it would make much more sense to negotiate on that one because thi sis what you can actually spend.

[samstave]

Also, its super easy to calc your annual based on hours: just double the hourly rate and thats what you generally gross per year, i.e. $16/hour is ~32,000 per year.

So if you ever wonder, take your $160,000 per year and you are making $80 per hour... so your complaints about salary will diminish.

[Konnstann]

If you're doing that for salary->hourly rate make sure you're honest about how many hours you actually work, that math only works for 40h/week, if you're working 50, 60, or 80 hour weeks adjust accordingly.

[neverartful]

Double the hourly rate and then add three zeros to the end (to multiply by 1000). Or if you want just 1 step, multiply by 2000.

[junon]

TIL, neat trick!