Am I missing something about US salaries here?

[Krayvon2]

I work in the UK, colleague works in the US for the same company.

We do a very similar job - Colleague earns around $158k per year. My salary is in £ and still a very good one but considerably less if you look at the exchange rate (probably half of US salary). However, this is a common trend with US vs UK employees in our company due to job market differences, experience etc (the sector we work in commands more of a premium over there).

With my UK salary I still manage to save a decent amount each month and pay all bills and mortgage etc.

Talking to US colleague about how in the UK we get paid on one set day every month (over there salary is paid in two installments each month) and they asked me how on earth I managed to make the money last all month.

They seemed to find it hard to believe it was possible to make a salary last 30 days and implied they struggled to make what they earn last over a couple of weeks! They've also made comments in the past about struggling with a surprise bill or having to put off a purchase.

I know lifestyles are more expensive over there but they spoke as if they earned peanuts so I'm wondering if I'm wrong to think that's a good salary? They get health cover through the company too so that's not an issue. Is there some other tax or something that I'm missing here? They are East Coast but not in most expensive area (not New York or Boston)

Where does this notion come from among some posters that we in the US are paid gross? Millions of Americans are in the middle of working on their taxes or getting their information ready to give to an accountant at this very moment. And a key portion of that documentation are statements that show the amounts that have been withheld for income tax, social security tax, Medicare tax, state income tax, if applicable, and a few other things as well. I'm inclined to take a photo of my dining room table just to show what this can look like.

I read earlier today on MN that it costs $30K to have a baby in the US.

Where do people get these ideas?

I've managed people in the US who were paid more than me in the UK. Someone once explained that, economically, the UK is to the US what Poland is to the UK. But still I absolutely wouldn't trade places.

Am I being thick but surely this is about the weak pound which Is now in parity with the dollar (roughly).

So in the us you earn $10 and and it buys you a Sandwich for example. In the uk you earn £5 and that also buys you a sandwich.

All well and good but since the pound is worthless it’s really expensive to use your £££s in America and instead of that sandwich costing £5 it now costs £10.

DH was on about that money in the US and we had plenty of cash and were v comfortable (not rolling in it though) so I think your colleague is just bad at money management.

Also I had 2 babies in the US via c section. My actual bills from the ob, the hospital, the pharmacy, the labs, the pediatrician etc totaled over 40k. My insurance paid the majority of it and I think in the end it cost us something like 5k per birth. We had a health savings account with his employer that DH paid part of his salary into every payday so we used that to cover it.

It was like being in a hotel though, they even gave you nappies and baby wipes to take home (probably at a ridiculous cost)

That’s so wrong and another example of just repeating stereotypes without knowing what you’re talking about.

whike you file taxes annually your employee still deducts federal taxes; state taxes, social security and Medicare deductions from each paycheck. You do have some flexibility in how much is deducted if you tweak things like number of dependents etc and at end of the year you file your taxes and either owe some taxes if less tacans was deducted or you’re owed a tax refund. And there is a penalty if you under deduct through the year so the aim is to ensure you deduct enough taxes through the year.

Sadly the UK is a low pay, low productivity country (E.G., www.theguardian.com/commentisfree/2021/dec/26/uk-stuck-with-low-wages-until-productivity-goes-up).

London is frequently ranked in the top 10 most expensive cities in the world (e.g., www.mylondon.news/news/uk-world-news/london-officially-fourth-most-expensive-24182826.amp).

I work in London for a global firm with many colleagues in Seattle: their pay is double mine, but this isn't counteracted by more working hours, more expenses, less holiday (on the US side) - yes, certain taxes and costs might be more in the US, but they aren't double.

It's labour supply and demandspecifically "market rate" for a particular role the UK vs USA. And this is before the weak pound. We get paid less because companies can get away with it: the UK government uses in-work benefits to subsidise companies to pay low wages (child benefit, child tax credit, UC, free nursery hours, housing benefit, council tax benefit etc. etc.) - it attracts global firms to hire UK workers because they can pay us less. Many international people do not know how we can live on the average wage in the UK - have you seen the price of renting and buying homes in London and the SE 😭😭 A person on the "average" UK wage can't afford to buy or rent their own home, and have kids, without benefits or being gifted time/money/free accommodation from their parents.

It's very annoying, but I still wouldn't want to live in the States.

Oh, yes, we do get taxes deducted before being paid. An entire LIST of taxes. Before your paycheck is issued, the employer will have deducted Federal income tax, state income tax where applicable, Social Security and Medicare taxes, and Unemployment taxes. Also your portion of group insurance, if applicable. Since Federal income tax varies by married/single/married filing jointly, and how many dependents you claim, you must ALSO work out how much over or under you had deducted, and then either pay the difference, or get a refund.

And paydays are up to the individual company. You might be paid weekly, bi-weekly (ie: every other Friday), bi-monthly (ie: 15th and 30th of each month), OR monthly. Personally, I've always preferred to be paid on the last day of the month. It allowed me to pay all regular bills (rent, utilities, etc) on the first of the month, and then budget the rest.

Salaries are definitely higher compared to the Uk and while some things are more expensive many people tend to live above their means simple.

My income in the US compare to the same job in the UK is a lot higher and with sensible financial knowledge you can build wealth but if you went to keep up with the joneses then its very very very easy to keep racking up debt and living paycheck to paycheck.

The US is definitely more commercial than the Uk and by that I mean lots of opportunity and pressure to spend so if you’re not disciplined you will end up living paycheck to paycheck.

Some people have said student debt but there has been no payment required for government t student debt since Covid so unless they have racked up a lot of private debt then that debt be it. To me it’s lack of financial discipline and spend spend spend culture.

That may be the charge for insurance but not the patient. For example my family insurance has max out of pocket of $4k a year and my employer adds $1k annually to a health savings account annually. I can find the account with pre tax income saving me and use that to pay so the max I would pay a year is $3k.

It does deprnd on where you live as well.

For years I managed many people on the east coast and lived on the west coast. I knew how much all of these people were paid and. while good salaries, it was far less than those of us in upper management.

Every single one who invited me to to visit had big (very big) homes with plenty of garden space. Boats and lovely cars very common, lived a great lifestyle.

The few who visited me in the bay area in my small house that cost three, four or five times theirs, we're truly shocked at my standard of living. This was in a very sought after suburb, aspirational to us.

It is all situational.

The nappies, wipes, and other things they give you aren't charged to you at all. The companies provide them for free in the hope that you'll buy the same brands when you run out.

Ah yeah that’s a good point. probably works too!

I actually do remember that one hospital had pampers and one had Huggies. The nurse literally opened the cupboard when we were packing up to leave and handed over a few packs

I live in the US, everybody has federal taxes, 401 k retirement( if participating) employees portion of health insurance ( if required) , and state taxes ( however we do not have state income tax here in Florida) taken out of their check every time they get paid. We file income tax once a year, we use our mortgage interest , medical expenses etc. as deductions and either get some of the money we paid in taxes back or we can end up owing the federal government.

It's the same old misinformation regurgitated on every one of these threads on Mumsnet. Critical thinking is not taught in UK schools if Mumsnet is anything to go by.

And don’t forget the obligatory way they have to state that they will never want to live in the US lol.

Very true that in Florida we have no state income tax. Instead, because the economy is heavily dependent on tourism, we rely heavily on sales tax for state revenue. Sales tax is a regressive scheme and hits lower income people harder, but I don't see it changing anytime soon. But for those of you on Mumsnet who come to Florida and buy stuff, we thank you. 🌴

That isn’t for six eggs from Walmart. For one thing, you can’t actually buy eggs in sixes in the average US supermarket, a dozen is often the smallest size stocked, and they usually also sell trays of 2 and 3 dozen (no idea how anyone gets through that many eggs).

So it’s possible they are spending $18 on a tray of 36 eggs - still pricey, but if they are in somewhere like Planet Organic it is potentially believable.

Or they are actually buying hundreds (are they a Quiverful family with like 28 kids?), and the price per egg is the same as in the UK.

Eggs are definitely more expensive than they were just a few months ago but I just checked the price for my local grocery store (Publix) and they are $5.53 a dozen.

There is an egg shortage due to Avian flu outbreak a salmonella outbreak hence the recent increase in price of eggs but I’ve not seen the $18 some people are reporting on MN. My local grocery store has 18 eggs for about $6.

Hopefully things will ease up soon and prices come back down.

www.kktv.com/2023/01/11/heres-why-we-are-seeing-nationwide-egg-shortage/?outputType=amp

Sadly, most US grocery stores still sell eggs from caged hens. In some places, only a minority of eggs are cage-free, and those tend to be quite a bit more expensive.

Whereas most eggs sold in the UK are free-range.

(no idea how anyone gets through that many eggs).

Completely off topic but we - family of 4 - buy 2 trays of 30 eggs every 8-10 days or so

2 each for breakfast every day = 40, about 10 for baking, another 10 for hard boiled lunchbox snacks/omelettes. Great versatile healthy food!

Meant to add and cheap. £5.50 per tray from a local farm

I would say the main difference between US and UK, from my stance as US person, is that in the US, when we calculate salary, we expect to be taking from that salary to save for retirement, for medical expenses, for long-term care, and all sorts. If we need a nursing home as an elderly person, we would either be expected to pay via previously purchased long-term-care insurance (which is dicey as sellers of such insurance are incentivised to charge high prices and provide as little care as possible, and to find legal loopholes to avoid paying at all), or you pay out of pocket, or you get none (i.e. live with younger family members, if you have any, and hope they take care of you). One hospital stay can be very, very expensive (my son visited A&E last year for about 3 hours and so far my bills have been around $1000 and that's WITH excellent health insurance. Every time a member of my family visits an A&E our co-pay will be about $100 minimum, and most likely a lot more), and insurance companies are always looking for ways to avoid paying out even if you have a contract for insurance with them. Basically in the US you use your salary to build your own safety net and it needs to be as big as you can make it.

Taxes are generally withheld before we get our paycheck but when we
think about our salaries we generally think about the amounts pre-tax, even though we'll only keep 60% of it by the time it gets to our bank account.

Major difference in that council tax does not pay for schools in the UK, this is paid by central taxes. If you're in an expensive school district in the US, your property tax bills can easily be $20,000 plus. Of course, if you have kids this is a great deal because the quality of education in one of those school districts is amazing. But it's expensive.