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)

I don't know anyone who buys iceberg lettuce. It's devoid of any nutrients.

From other threads of stupidity on Mumsnet.

And yet she's doing better. Perhaps you should ask her for career advice.

Hi sis!!!!!!!

You’ve lived in the US 15 years and still claim there is no government funded retirement so what is social seniority for?

Social security payments for retirement is even higher than the UK state pension isn’t it? And state pension is NOT funded by the government, it is funded by NI deductions from your paycheck same as you also have social security deductions from your paycheck in the US that fund pension, disability payments and a few others.

And as with the UK your pension is made up of 3 parts, the government paid pension ie state pension in the UK and SS in the US, your company pension plan so in the UK employer and employee paying into a pension plan which in the UK will be a 401k etc, and your personal savings. You saving 15% for retirement is based on sensible financial decision making not because there is no government pension. What you’re saying is in the Uk you will spend it all and depends on state pension which is what? £180+ a week??? You’re making it sound like some huge amount which it is not.

The average social security payment for retirement is about $1800 a month with max about $3500 and can be higher depending on the age you start taking it. The max state pension in the UK is £740. As a couple the couple in the Us will be better off especially if they have a paid for house with no rent or mortgage to pay.

Having said that you should not be depending on state pension in the UK or social security in the US alone for retirement, it is one of 3 parts for a comfortable retirement.

Unless you’re a very very low earner all your career in the UK the pension options in the US are actually better.

I do not know where you live in NY but NYC has good public schools so it’s a preference for you to pay private school fees of $4k a month.

@madeleine85 your statement re pension has also reinforced what I have noticed with people in the Uk having this grand image in their head about state pension without truly knowing how much it is. I have friends who make statements such as no need to save for retirement as I’ll just live on state pension, get these same people expect to be able to travel during retirement etc ok what £800 a month?

we’ve seen how increase in gas prices put many retirees in difficulty so no one should be planning to live only on state pension, it’s a small amount and will not give a comfortable life.

Lots of people are in for a shocker when they retire and find out how much they will get, and the ~£800 is if you contribute for the full 35 years which means some people will get less.

They have to do tax returns so that will come out afterwards. Healthcare is very expensive
They don't have the same holiday entitlement or maternity rights . Pensions etc

You are not comparing like for like

@Lostinthecoop this thread is an example of how so many people in the UK have their stereotypes and misconceptions about the Us as continue to boldly make statements when they don’t know what they are talking about. One claimed they don’t take takes from paycheck, another claims no government pension despite living in the Us for 15 years.

There seems to be an u healthy obsession in the UK about the US and I don’t get it as you all don’t want to ever live there yet you all continue to act like you know everything about the Us and have these debates based on false information lol.

let me blow your mind again, do you know that unemployment benefits in most states is higher than jobseeker’s allowance/UC for when you lose your job in the UK?

In Illinois for example the maximum unemployment Benefit if you lose you job is $484 a week and up to $669 if you have children. that’s the maximum, the actual amount depends on your income and how long you worked etc. This varies by state with Massachusetts having the highest at about $800 a week but you will also contribute for that benefit.

During Covid the federal government paid an additional $400 a week on top of the state benefit for people to stay at home in addition to stimulus payments which were in every way more generous than what the Uk government gave Brit’s but yet the narrative is no social net in the US.

www.illinoislegalaid.org/legal-information/getting-unemployment-benefits

I just think Brits should stop talking about the US and leave them to sort themselves out. You all make it clear you will never live there yet continue to de ate and debate and debate with false information everyday.

I don’t get your point about pensions (see my post above). Yes legally the holiday entitlement is lower than the UK but many many companies are offering more. I’ve had 3 employees in the Us and the lowest PTO I’ve had is 21 days. That still doesn’t explain the salary difference.

i was on £45k in the UK and transferred over on $105k and since then I come has jumped significantly faster that it would have in the UK.

Not true, taxes are deducted based on estimated earnings. You then file a return (everyone does regardless of salary) and you may have more to pay or you may get a refund

Yes they do, employers withhold taxes just like here. They may have to pay extra/get some back at the end of the year depending on extra allowances/extra pay.

My friends in the US pay much, much more than we do for things like: water, car insurance, health insurance, garbage disposal, road taxes, dental charges, prescriptions, ... basically, everything actually, except material goods, which are often cheaper.

do you know that unemployment benefits in most states is higher than jobseeker’s allowance/UC for when you lose your job in the UK?

True, but AFAIK, unemployment benefit only lasts 18 months.

And you have to fund your entire health insurance payments, including the (much larger) proportion that would previously have been paid by the employer. It's called COBRA, and most people who lose their jobs cannot afford it.

You're not entitled to much unless you have previously paid in. There is no Universal Credit, child benefit, payment of rent for the unemployed, etc. Hence people living in cars, whole families living in one cheap motel room, tent cities etc. Despite the AFC act, a significant proportion of working people still cannot afford health insurance.

Yes, many are doing well, some maybe better than equivalent occupations in the UK. But fall through the cracks at your peril - there ain't much of a safety net.

ACA, sorry - affordable care act. AKA Obamacare.

And you have to fund your entire health insurance payments, including the (much larger) proportion that would previously have been paid by the employer. It's called COBRA, and most people who lose their jobs cannot afford it.

If your only income is unemployment insurance, you will meet the threshold for free or heavily subsidized care under the ACA. And you can apply right away as the loss of a job with private coverage qualifies as a "life event".

If you were laid off and are getting a severance package many employers will continue your coverage for three to six months as part of the package.

The safety net in the US has massive holes in it, but I do think Brits don't know what is available as the programs are so patchwork. What the US doesn't really have, thanks to "welfare reform," is cash welfare (it technically exists, but is time limited and very difficult to access). If you are not working and not disabled, there's really nothing for you. If you fall into one of those categories, there is something.

Housing vouchers (Section 8) do exist but are capped and getting one is very difficult in most of the country. The biggest issue the US is having with housing right now is that there isn't enough of it. People are priced out of the market because of demand, even in traditionally cheaper cities. No one seems to have an idea of how to deal with it.

There is no child benefit (the experiment with the prepaid Child Tax Credit would have effectively created that) but there is a significant child tax credit and earned income tax credit, and they are refundable credits--that is, you can get back more than you pay in income tax.

That’s not true about disability, social security benefits cover disability payments as well.

I do agree with you about they fact there are holes and it’s not perfect but neither is the Uk benefit system, there are big holes there as well. Are you telling me it’s easy to walk into a council house in the UK?

Re child benefit yes it’s a tax credit which you claim back which they made advanced last year, it sure if it continues to be advanced payment or back to normal.

Irrespective I do not think the UK benefit system is that amazing once you go past a certain I cor level, so I would rather be in a position to earn and save more than limit myself to a low income to get low benefits.

So yes I agree there are holes and it’s not perfect but its also not the UK narrative of no benefits.

This thread is a hoot. So many misconceptions and misinformation being presented as fact. One thing that hasn’t come up yet is standard of living. While it’s true some things are more expensive here but what you get for that is IMHO different than what is available in the UK. so even while you can compare some things the details start to make the price differences understandable.

To name a few that I’ve picked up on both while studying in the UK and here:

• Emergency response times minutes vs. hours
• space -house/lot sizes
• availability and access to health care
• Hospital services
• Little things (again depending on location)
• School transportation, home garbage pickup, leaf/snow removal, etc

I think everyone needs to use a little common sense here… is it really plausible that everyone is paying $18K-$30K out of pocket per baby? Do you really think that there isn’t a government retirement plan? Do you think the government wouldn’t have a way to collect taxes from payroll?

Yes we have tent cities but look at who lives in them, mostly drug addicts and mentally unwell people. Yes some people can’t afford health insurance, but the vast majority can. Yes, some people live far beyond their means and don’t prioritize intelligently. And yes some people are poor through no fault of their own, but they do have safety nets available to them.

@Cantstandbullshitanymore sorry - bad phrasing. I know about SSDI and SSI. I meant that if you fall into neither the employed nor disabled categories, there's not a lot available. (I should say elderly, too.) SSDI can pay more than its UK equivalent, also, as it's wage-linked, though getting it is a nightmare process.

I don't think the UK is paradise either having lived in both countries and the Tories have cut the safety net in the UK too. The US is always held up as a scare tactic to distract people while the UK government makes things just as bad: using Ivy League universities to make £9000 tuition fees look reasonable when average English student debt is now greater than American.

Given the size and scope of the US economy that’s more than enough time to get another job isn’t it? And if there is an economic situation like Covid of the financial crisis etc the federal governance enacts emergency laws that extent the duration.

Surelry the point of benefits when you lose your job is to tide you over till you get a new job not to become your new life.

The path we’re going in the UK where people are earning £50k - £60k and still feel they need government support is not exactly sustainable.

I see your point and agree it’s not an amazing rosy life on welfare hence why I said I prefer to be in a position to earn more and save and inches for myself but I get that doesn’t appeal or apply to everyone.

and yea I agree re the student debt point which I’ve made so many times as people on MN keep using the extreme high amounts like that applies to the average American when it doesn’t.

In summary I would rather not be on benefits in either country and once you get past a a certain income limits with a mortgage last a certain amount the benefits in the UK don’t do much for you.

I make $95K in NYC
Federal marginal tax rate: 22%
State marginal tax rate: 6.25%
NYC local tax rate: 3.8%

After maxing out retirement contributions (employer matching) and paying health insurance I make $3800/m.

Rent is a heavy percentage of that sum.

Luckily I don't have student loans...

Work is definitely better paid in the US, and has been for yonks. I took a 50% cut when I returned to the UK -- in 1986. I also had a four-day week in the summer months.

@BeetlesForever

You don't have to pay COBRA.

You can apply for health insurance under the ACA even if open enrollment is closed.

You can apply for Medicaid too.

'Payment of rent for the unemployed' -

Section 8 is a federal housing assistance programme authorizing payment to private landlords on behalf of low income tenants. It's cumbersome but it definitely exists.