Some of them have more entrepreneurs per capita than USA.
What you don’t have is the ability to attract a crazy amount of international capital to mega corporations like in California/Texas or some places in China. So it’s hard to build the very largest tech corporations there.
I think European companies tend to be less consumer oriented, not as visible, and focusing on more “behind the scenes” technology. So you get the impression there’s fewer of them than there actually are.
Like, in my industry, there’s nothing like Nvidia or AMD. But there’s ASML and Zeiss for instance, without which Nvidia couldn’t make their chips. There’s nothing like the mega super high performance foundries like TSMC and Samsung but there’s a whole bunch of smaller specialised foundries focusing on very high power, very low power and optics and MEMS stuff.
Any article that mentions Europe either directly or in passing will attract at least a couple of comments that mention 'regulation' and how everything is going down the drain here. It's all bs but that doesn't seem to stop the influx of these comments, in this case from a brave novelty account no less.
One quick example: Germany has a 3 month required severance period. So if you are doing something where funding may be uncertain, a German employee is somewhat risky. A startup in California that fails to raise funding can cut staff and take another swing in 6 months. In Germany, this is less likely. You could just budget for this up front and sock away 1/4 salary for every hire, but along with the employer taxes, that really starts to negate any cost advantage vs California.
It also cuts the other way. German hires often cannot start for 3 months, so in addition to the time it takes for a developer to start learning the codebase once they’re hired, it might take 6 months between the time that you realize you need a developer and when they are hired and up to speed.
I’m not sure, but I believe it is also more complex to freelance in Germany, requiring more of an official business entity, vs the US where you can just send someone an email with an invoice and everyone’s happy.
Adding this all together, German employment law is heavily tilted towards larger businesses with longer time horizons and the funding and scale to absorb uncertainty.
An alternative viewpoint for you to consider: Germany recognizes that employing someone is much more a risk for the employer than for the employee. So they protect the employee's interest. That there are countries where employees have fewer rights gives the employers in those countries and edge, but that's only because there is a 'race to the bottom' element here.
In spite of all that Germany is an economic powerhouse and even if the companies don't make profits as ridiculous as those in countries where such protections do not exist your average employee in Germany is going to have a far less stressful life on account of this than elsewhere.
Freelancing all over Europe is best done through a business entity, it offers some basic liability protection and allows you to defer taxes.
Your numbers are plain wrong. France, Spain and Germany are at around 43%, worst case scenario.
As someone who pays tax in one of these countries and manages/recruits people across all Europe (as well as Americas and Asia) I can confirm these calculators are very accurate.
Taxes (incl. pension + unemployment + health insurance and other social contributions) for 200K euros annual salary, for a single, no-dependents employee (the most unfavourable situation)
Quoting fantasy numbers with an air of authority, without sources and using an aggressive/dismissive tone throughout all your comments strikes me as pretty pathetic but, who knows, it might convince others.
use the real calculation. What the employee costs to the company vs what he takes home net. 45% take home pay, and less once you include regional taxes
then include VAT and you are back to the 70% discount.
I did not forget 25% social security. I listed taxes for the employee (as stated in my message).
If we look at total taxes and include taxes paid by the employer (fair point), your figures are still wrong, as these 3 countries still set a total tax burden inferior to 50%, far from the 70% you quote.
There is no VAT on wages/payroll, either in the UK or the EU (1)
The figures I quote include regional taxes in Germany and Spain which have them.
Taxes (incl. pension + unemployment + health insurance and other social contributions) on 200K euros annual gross salary, for a single, no-dependents employee (the most unfavourable situation)
Spain (2):
Taxes [employee]: 81,915 EUR [40.96% of 200K EUR]
Taxes [employer]: 15,596 EUR [45.13% of 215K EUR]
** the page you source is wrong for salaries over 55K EUR, see explanation at the bottom (3)
France (4):
Taxes [employee]: 87,866 EUR [43.94% of 200K EUR]
Taxes [employer]: 24,119 EUR [49.97% of 224K EUR]
Germany (5):
Taxes [employee]: 86,439.33 EUR [43.22% of 200K EUR]
Taxes [employer]: 15,078 EUR [47.20% of 215K EUR]
UK (6) [200K EUR = 172K GBP]:
Taxes [employee]: 70,185 GBP [40.90% of 172K GBP]
Taxes [employer]: 22,425 GBP [47.73% of 194K GBP]
(3) In Spain, social insurance taxes (contingencias comunes) are calculated as 28.3% of 1.6K (min) to 4.5K (max) mensual income. Anything over that does not compute for that calculation. So the employer can at most pay 1080 EUR/mo (23.6%) and the employee 211 EUR (4.7%) a month as opposed to the 4K the page you source mentions
No, you need to count VAT that employee pays when they buy stuff.
There's a difference of that sort between Oregon and Washington states in US: Oregon has no VAT, but has state income tax (on top of federal) and WA has 10% VAT but no state income tax. In the end they come out approximately the same tax load.
E.g. taking Germany and Standard 19% VAT and the 86,4K/200K you mentioned you get about 95.4K left for prices before VAT (e.g. you can only buy 95,4 x 1K EUR (as seen in countries without VAT) iPads), which is already >50% in total tax. Now you remember you started with 215K EUR at the company and you get ~55% total tax.
Don't know mate, seems to me Europe controls a, maybe the, major component of tech through ASML. If they decide you can't buy their machines anymore, then good luck with your home grown chips on 10+ year old lithography.
Whatever doesn't exist, it will simply not happen, the ship has sailed
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