UK vs US salaries

[Star555]

Perhaps a naive question, but why are US salaries so significantly higher (often 2x) than UK salaries for the same jobs, e.g. in science and technology? I know that UK gets NHS and more holiday time and maternity leave than the US, but can that really make such a big salary difference? I also know that private (fee-paying) uni education is insanely expensive in US (state unis are much cheaper), but in UK the cost of fee-paying schools for children up to Year 13 isn't exactly cheap either!

For those of you who moved to/from the US by choice, was the increase/decrease in salary among your main incentives/concerns? Or did salary not play a big role for you? (Perhaps other factors like being near family were more important.)

You would definitely need a payrise!
A permanent move on an L1 visa is a bit uncertain because if you lose your job you have to leave.
I would ask for relocation back to home country if they fire him as part of the new contract.
Not because it is that likely to happen but it does sometimes and moving is expensive.

Greenwich is a very expensive location for housing. OTOH the property taxes are pretty low, and the schools are good.

A lot of bankers and hedge fund managers live there because it's an easy commute to NY, nice houses and good schools. Their staff tend to live in the next few towns over eg Stamford, Darien, Norwalk.

Check the school district carefully when you're looking at houses to rent or buy.

Yeah the plan was to ask for relocation (plus 9 months salary or a job back in the UK) if: the visa re-app fails, they fire him, make him redundant or if the company folds.

It’s still early days as we haven’t even submitted the L1 visa app yet. We’re not even sure whether we have to wait until the 31st of March for the visa ban to end. I think the next step is hiring an immigration lawyer. They’ve never moved a non US citizen to the US before so the HR dept are not really confident with how any of this works.

Because the office is actually in Greenwich we were planning on living a bit more east and in from the coast as it looks a “bit” cheaper and a bit more rural - perhaps Weston/Ridgefield.

DH does work in finance but he’s not a hedge fund manager on 7 figures 😆

Niche.com is a good place to look up the quality of schools in different areas while also showing you typical house prices.

Weston CT
www.niche.com/k12/d/weston-school-district-ct/

Ridgefield CT
www.niche.com/k12/d/ridgefield-school-district-ct/

Hiring an immigration lawyer is going to be a must.

When we moved to the US, the company gave us (I think) $15k towards our moving expenses. That didn't include any costs for things like renting a car or house when we arrived, and our immigration was fairly simple because everyone in the family except me was already a US citizen. That was nearly 15 years ago.

I've been in the US for a long time, long enough to send my DCs all the way through school and most through university, with one now in med school.

I want to correct a misunderstanding about university costs. Yes, the ticket price for university education is eye watering. However, not everyone ( by a long shot) pays the full tab.

What you pay depends on many factors, including your grades and your family's income. My DCs have gone to both private and public universities and none of them ended up with the sort of debts you hear about on the news.

There are approximately 66 universities offering to meet approximately 100 percent of demonstrated need if you are accepted, and they admit students before looking at their financial aid needs. If you are accepted and family resources fall under a combined income of $150k per year, they will work to make it affordable. You may need to take out loans, and you will be working while studying, but you will not pay the full whack if you are admitted to Princeton, UChicago, Yale, and 63 other highly selective universities.

Many state schools, realizing that top students weren't even applying because they cost more than private universities (thanks to generous financial aid) have begun offering full rides to academically able students whose family income is limited.

Otoh, going to med school can be very expensive. DS will owe about $350k upon graduation, which will amount to just about $1million as interest accrues, and as a result he actually can't afford to go into general practice, psychiatry, or pediatrics. He's crossing his fingers for an emergency medicine or anesthesiology residency.

I was under the impression that we would find it very hard to buy because we wouldn’t be able to get a mortgage. We have no credit history in the US, is there a way to start getting this before going out there? Are we talking 6 months or 2 years to build up a good enough credit score?

Rents seem to be inflated atm because of the pandemic - I would guess a few people have moved out of nyc while they can work from home. I saw a house for rent $10k a month that the lender bought for $600k in 2019 which seems a bit steep!!

Thanks for the Niche links @ZZTopGuitarSolo lots of good info there!

On university - it sounds like it might be cheaper to pay the international fees for UK universities in some cases if DC are open to the idea.

I was under the impression that we would find it very hard to buy because we wouldn’t be able to get a mortgage. We have no credit history in the US, is there a way to start getting this before going out there? Are we talking 6 months or 2 years to build up a good enough credit score?

We got a mortgage within a few months of arriving in the US. We had to show a LOT of credit history proof from the UK eg a year's bills from something like 10 different companies like utilities, mobile phone, etc.

Rents seem to be inflated atm because of the pandemic - I would guess a few people have moved out of nyc while they can work from home. I saw a house for rent $10k a month that the lender bought for $600k in 2019 which seems a bit steep!!

Firstly, rents include property tax, which makes them look a lot. And yes I think they are really high right now although I do think even during normal times they're high compared to what I'd expect to pay in the UK. $10k seems an awful lot but I've been told I could get $4k+ for my house in Maine.

On university - it sounds like it might be cheaper to pay the international fees for UK universities in some cases if DC are open to the idea.

It can be, depending on what offers you get in the US. It isn't worth it for my older two based on the scholarships they've been offered here in the US, but I do know a fair few people whose kids have gone to UK universities.

The myth seems to be that a US high school education doesn't prepare you for a UK university course but that hasn't been the case for anyone I know, although I couldn't speak for courses that expect you to have very specific A levels before you arrive.

A big part of it is where and what your kids want to study. Some kids really want to go back to the UK, some really really don't. Mine have no desire to, especially as the degrees there specialise so much earlier, and neither of them had a clear idea what they wanted to study at 18.

University costs are immensely variable.

We used to live in Pennsylvania. Fees for the large state universities there are $20K plus living expenses. here in Maryland, they are $10K, plus living expenses. Again that is sticker price and you may get an academic scholarship. The student loans here are a bit less favorable also.

Private universities are all over the map and you have no idea what you will really pay until you apply. Higher paid expats are in a bracket where they are expected to pay a large chunk of the cost, which affects the views you will see on MN.

You also have to consider the difference in degree structure. An American degree is much more flexible. If you know for sure what you want to study than the English system is great (and only 3yrs for a BA), but the American one is good for those who want to mix and match or are less sure of their choice. You tend to hear that the American degree sacrifices depth--this is true to some level (breadth is emphasized) but students have a number of optional credits in many degrees. If they love their subject and want to get into it more they can do that. If they want to use it to learn some other things, they can do that too.

The big issue that students need to think about is that American professional degrees are often graduate entry (everything from medicine, law, to physiotherapy) whereas British ones are undergraduate. This makes training longer and more expensive.

When we moved HSBC were very helpful with getting us set up and they can get you a mortgage and credit card, but I believe they have a minimum amount of money for this.

We lived in California for 3 years and were very grateful that we were there when it's was $1.5 to £1. We couldn't afford it now. It's hugely expensive to live there. I have friends with good health insurance- her uncomplicated birth cost $10k out of pocket. Pretty much everything bar eating out and petrol is more expensive. Property tax on a $250k house was $8k a year. Not to mention the expectations. I was lucky my husband was on UK terms but I worked full time for an ambulance company for a year. I got 2 weeks paid leave a year to cover sickness and holiday. That's why Americans talk about being owed sick days, they aren't taking the piss, they just don't get sick leave + holiday. I caught bacterial pneumonia, likely from work and it used all my paid leave. Don't get me started on a colleague that had to be back at work 3 days after giving birth

I'd want a lot more pay for that crap.

HSBC allows you to set up a bank account before you arrive but there aren't many physical branches.

The equivalent of council tax can very high so that pushes rent up. Our four bed rental house has taxes of around 30 thousand dollars a year. I understand taxes are even higher in the suburbs with excellent schools.

You tend to hear that the American degree sacrifices depth--this is true to some level (breadth is emphasized)

This is part of the myth of Britain = Greeks / America = Romans.

Rental homes (i.e. not owner occupied) frequently have higher property tax rates than similarly valued owner occupied homes.

@Rhayader - insurance may well be paid for 100%, but what does the insurance itself pay for? What is the annual family deductible? What is the individual annual deductible? Are dental and vision included? Maternity? Mental health coverage?

@mathanxiety I’m not sure entirely but I’ve been told it’s “best in class” and “fully paid” by Americans in the US office. If our UK insurance is anything to go by then I would assume it is very, very good. The health is the one thing I’m not worried about - although I agree that others should be as the American health system does seem to be a complete minefield.

I didn’t know that the tax rates were different for rentals, that does make sense. I’m hoping that they would pay our rent until we can buy. If we are paying 10k rent and rent is 1/3 of our post-tax expenditure then DH pre-tax salary would need to be more than half a million.

Do you pay income tax on rent paid as a benefit in kind? What about health insurance? We pay about £5k a year as tax on insurance here.

No, you don't pay tax on health insurance as a benefit-in-kind, and you can pay your premiums and out-of-pocket expenses out of pre-tax income, so they're a benefit really worth having.

You're going to learn so much about this if you do move :-)

Be prepared to learn about premiums, deductibles, co-pays, out-of-pocket limits, in-network vs out-of-network, HSAs, FSAs, and more.

What I would say is that some things like child mental health are well provided for in the USA compared to the UK.
So yes healthcare is expensive and complicated but not all bad.

Gosh yes. We've had so much mental health support. DD was referred to a psychologist and psychiatrist last week, and her first appointments are today and tomorrow.

DS has a 504 Plan and we have never had to battle the school for it. He saw an Ed Psych within about a month of us starting the process for ADHD diagnosis, and his 504 Plan was written and adopted about a month later.

Everything costs more in the USA, health insurance is hundreds a month for a family (employer only pays the employee cost usually), housing like in the U.K. varies but cities are $$$, food cost around 1/3 more (does vary by state), normal kids activities cost at least double eg my DD's ballet lessons (years ago) were $12 an hour when we returned to the U.K. they were £3.40! Mobile phones and internet cost a lot more too (but electric was cheaper). We took a 10% pay cut returning to the U.K. despite it being a "promotion" and were better off.

@lunarlife

If you have insurance! Alas many do not or cannot afford the copays

employer only pays the employee cost usually

This is not true.

In 2019, the average company-provided health insurance policy totaled $7,188 a year for single coverage. On average, employers paid 82 percent of the premium, or $5,946 a year. Employees paid the remaining 18 percent, or $1,242 a year.

For family coverage, the average policy totaled $20,576 a year with employers contributing, on average, 70 percent, or $14,561. Employees paid the remaining 30 percent or $6,015 a year.

www.peoplekeep.com/blog/what-percent-of-health-insurance-is-paid-by-employers

Depends on where you live but in some cases it translates to a much better standard of living.

If someone is saying insurance is "best in class" and "fully paid" I would bet folding money that that means including dependents. Some companies are cheap on that, but many are not. (What is becoming more common is requiring spouses with access to their own employer provided insurance to use it rather than having people choose which policy is better.)

Your share of the premium is taken out pre-tax and your employer's share is also non-taxable. What you pay in deductibles and so on is from your after tax salary though there are tax free savings accounts for this (see? complicated) if your employer offers them. We can save $2500 a year in our FSA, taken out before taxes. That also covers things insurance doesn't pay for--contact lenses, fertility treatments, extra dental work (dental typically has a maximum benefit).

We have done very, very well with child mental health. There are gaps, but my kids have special needs and it has been close to brilliant with the exception of the caps on private speech therapy (max number of visits per year). The cuts to NHS services and school provision for SENs have been just brutal. There are still waits here for evaluations but not as long generally.

The way property tax works is that the owner pays it, so the cost is built into rent--you won't see it broken down. $30K, as someone pays, really is on the high end. I have cousins in NY and NJ (most expensive states) and I know what they pay as we have discussed it. I pay $5K here.

Yes, our city is famed for high property taxes!
Our landlord has debated selling the house purely because of the property taxes.
Getting property taxes reduced is a full time business with companies devoted to it.
I only know the taxes because they get sent directly to the property and I send details onto landlord.
Im assuming at least some of this is tax deductible for him.

Just to really add to the confusion, pre-tax money you put in an HSA to cover healthcare expenses can be rolled over from one year to the next, and also into a 401K plan, but with an FSA the rules are different - I believe you can roll over something like $500 but the rest is use-it-or-lose-it.

You can also use pre-tax income to pay for childcare using a Dependent Care FSA but that also has use-it-or-lose-it rules.

Or you can take a Childcare Tax Credit on your tax return, which is typically how we saved on the cost of childcare.

There's also a Child Tax Credit, which is not the same thing... just to be really confusing :-)

@ZZTopGuitarSolo do you have an accountant? It sounds so complicated.

[quote Rhayader]@ZZTopGuitarSolo do you have an accountant? It sounds so complicated.[/quote]
I didn't for the first 12 years here, but I do now - I run a business and it's now worth it.

But I did work for an insurance company providing company benefits, and one of my jobs was to create training for sales reps to use to explain how the various benefits fit together.

It all changed fairly spectacularly in 2014 when the Affordable Care Act provisions came in.