Reply to: Friday 13th, unlucky for some...

[Sysman]

Oki doki (as a German collegue always used to IM me) but is that 45k before or after tax?

Going back longer than I care to admit... When I did a couple of months in Holland I quickly realised that when folks there talked about how much they earned, they tended to quote what hit the bank per month after tax and social deductions, and not their yearly gross. That actually struck me as a more meaningful indicator of your salary, and also explains why the 13th month was considered "extra".

I also noticed that in Switzerland at least one agency always seemed to get the terms "netto" and "brutto" (net and gross) the wrong way around.

The moral of this is that when comparing cross border pay you need to be extremely careful that you are comparing like with like.

P.S. Congrats on your negotiations.

[Cyberman]

Francko..... go back to your first post on this thread where you state 'Man you are a disaster etc etc etc', if you want proof that you were abusive. I simply continued in the vein in which you started, which I firmly believe you deserve. Sorry if I hurt your feelings .......

[Francko]

Now you're getting abusive because I proved you wrong Francko. You said that the 13th month did not exist and I have confirmation from Darmstadt. Caught hook, line and sinker, and your ignorance proven in spades !!

I would like to know why I am being abusive while I am just repeating the same things you are telling me. You are telling me I am ignorant and I am telling you so. Yet I am the only abusive person.

Besides, I did not say that 13th month do not exist. I do perfectly know they exist (I have one myself too) but my only point is that they are included in the gross salary. The fact that some companies might decide to give a bonus in a form of a 13th yearly payment doesn't make it the "13th salary" which in the rest of europe is a contractual form of payment.

[Cyberman]

CyberIgnorant, am afraid you keep proving yours.*

The 13th and/or 14th salary must be included in your contract and is regulated by law. As such it has to be included in your gross salary.

What you are talking about is just a bonus which some companies give away as an extra salary (hence the similarity with a 13th salary). But again it's not the 13th salary as contracts legally can claim which is regulated in a Collective Labour Agreement. In a permanent job in Italy we had the 13th and 14th salary as per contract (of course, included in the gross salary) and a yearly bonus, which we called 15th salary and that was outside gross salary (but legally cannot be called 15th salary as yours cannot be called 13th salary).

* Besides weren't you the one who said you go against opinion but not people? I think you are rather CyberFake too.

Now you're getting abusive because I proved you wrong Francko. You said that the 13th month did not exist and I have confirmation from Darmstadt. Caught hook, line and sinker, and your ignorance proven in spades !!

[Francko]

The 13th month I reiterate is standard, and again it just proves your ignorance.

CyberIgnorant, am afraid you keep proving yours.*

The 13th and/or 14th salary must be included in your contract and is regulated by law. As such it has to be included in your gross salary.

What you are talking about is just a bonus which some companies give away as an extra salary (hence the similarity with a 13th salary). But again it's not the 13th salary as contracts legally can claim which is regulated in a Collective Labour Agreement. In a permanent job in Italy we had the 13th and 14th salary as per contract (of course, included in the gross salary) and a yearly bonus, which we called 15th salary and that was outside gross salary (but legally cannot be called 15th salary as yours cannot be called 13th salary).

* Besides weren't you the one who said you go against opinion but not people? I think you are rather CyberFake too.

[Cyberman]

Oki doki (as a German collegue always used to IM me) but is that 45k before or after tax? If its before then its farily low for an IT job unless its a not very demanding one. Remember that if you're a single person that around 54% of this will be deductions so we'll say you have take home of maybe 25k which leaves you with 2k each month to live on. From that you're going to have to pay rent and depending on what type of property and where you live this can be quite expensive, I pay €1200 a month so you might struggle a bit...Then there are your utilites, food, transport, etc. Think carefully about it

Interesting.... It is a lot more than I was getting in 2003 and I lived in Frankfurt and was paying 500 Euros a month very close to Alt Sachsenhausen for quite a nice studio flat. 45,000 Euros could very soon equal 45,000 pounds, and that to me is a reasonable salary for a permie. I am not totally sure of the role yet but I am assured that it is more technical than admin, and involving development, which is what I prefer.

I certainly did not struggle on that money in Frankfurt, did not find it at all expensive, flew or drove home to the UK once a month, and also had a great social life, probably aided by my willingness to learn advanced german at nightschool. I still have many friends there including an ex-girlfriend.

[darmstadt]

Oki doki (as a German collegue always used to IM me) but is that 45k before or after tax? If its before then its farily low for an IT job unless its a not very demanding one. Remember that if you're a single person that around 54% of this will be deductions so we'll say you have take home of maybe 25k which leaves you with 2k each month to live on. From that you're going to have to pay rent and depending on what type of property and where you live this can be quite expensive, I pay €1200 a month so you might struggle a bit...Then there are your utilites, food, transport, etc. Think carefully about it

[Cyberman]

No its not. It is up to the company that employs you as to whether the 13th month is part of your package. Some do, some don't. As I said earlier I have never received it yet the missus does. It tends only to be within either low paying jobs, those companies that have a good Betriebsrat or union involvement. I know of hardly any companies that do it now.

Well, I take your point, but I certainly was not low paid and I got it, but the fact remains that it does exist even if not in your case. At least you have now helped to fill at least one gaping hole in Francko's knowledge.

[darmstadt]

The 13th month I reiterate is standard, and again it just proves your ignorance.

No its not. It is up to the company that employs you as to whether the 13th month is part of your package. Some do, some don't. As I said earlier I have never received it yet the missus does. It tends only to be within either low paying jobs, those companies that have a good Betriebsrat or union involvement. I know of hardly any companies that do it now.

[Cyberman]

Someone who claims that "a contractor is paying UK tax normally" gives away how much knowledge of international taxation he has got that it's even pointless to debate.

Hope you are aware of the fact that a permanent job outside UK does not decline any obligation from you to declare your status to the UK government.

Well I guess you can get some good indication about the 365 days rule and the notion of fiscal residency for tax purpose and how double-tax treaties apply among different countries with our friend google (else for a moderately large fee I am able to help you with that).

For the 13th salary I really would like somebody to confirm what you say as it really sounds bizarre.

By paying UK tax normally, I mean a contractor that has a limited company in the UK working for a client abroad that had an office in the UK. When I was doing this I was paid by an agency into my company account and I paid tax on that. That would seem quite normal to me and needs absolutely no access to the german tax system.

When I was in Germany, I declared myself non-resident in the UK for tax purposes and this was accepted by the Inland Revenue. This was a few years ago and Broon has changed some of the rules since. I will familiarise myself with the new rules as and when I need to.

The 13th month I reiterate is standard, and again it just proves your ignorance.

[Francko]

Francko, this tax relief is only available to a permanent employee that is paying tax in Germany. A contractor is paying UK tax normally, so would not qualify. I've worked on both sides of the fence so I'm talking from experience here.

You are quick to ridicule but it's obvious that you don't know much yourself !!

Someone who claims that "a contractor is paying UK tax normally" gives away how much knowledge of international taxation he has got that it's even pointless to debate.

Hope you are aware of the fact that a permanent job outside UK does not decline any obligation from you to declare your status to the UK government.

Well I guess you can get some good indication about the 365 days rule and the notion of fiscal residency for tax purpose and how double-tax treaties apply among different countries with our friend google (else for a moderately large fee I am able to help you with that).

For the 13th salary I really would like somebody to confirm what you say as it really sounds bizarre.

[Cyberman]

Francko, this tax relief is only available to a permanent employee that is paying tax in Germany. A contractor is paying UK tax normally, so would not qualify. I've worked on both sides of the fence so I'm talking from experience here.

You are quick to ridicule but it's obvious that you don't know much yourself !!

[Cyberman]

I worked in Germany before and there is a 13th month that is extra cash. Strange but true.

In order to compare salaries between contractor and permie you have to add the benefits to give a fair comparison. Benefits don't always give cash in the pocket but they are additional to what a contractor gets, and a contractor needs to earn an additional amount to compensate.

For instance, if I am sick for a month as a permie I still get paid, so the benefit is a 12th of 45K = 3,750 Euros. As a contractor that is money that he would not have been able to earn if sick.

As a pseudo-permie in 2003 I received a rebate of 5,000 Euros, so my calculation was based on the increased salary here.

[Francko]

Let me explain more accurately:

As a permie in germany an extra month's salary is paid at Xmas:
45K + 1/12 of salary paid at xmas = 45,000 + 3,750 = 48,750 Euros

I have no experience of 13th salary in Germany but I can't see why it has to be different than in the rest of Europe. Whether you are paid 12, 13 or 14 or 15 salaries the amount is still the same. 45k. Not really sure how you get that 1/12 on top. The issue should be only 45k/12 for 12 times or 45k/13 for 13 times in a year.

As a permie there are paid holidays and bank holidays when no work is done so the benefit is:
30 days leave + 15 Bank holidays paid = 45 days = 8% of 45,000 = 3,600

48,750 + 3,600 = 52,350 Euros

Here is no sense. You don't get extra money. Your income is still 45k. You have to work less days true. But your calculation makes no sense.

Tax rebate for dual home and travel(flights and car) and tax relief on flat rental............ approx 15% = 6,750 Euros

52,350 + 6.750 = 59,000 Euros

Your knowledge of taxes isn't any better either. Assuming you have 15% tax relief your only gain would be:

45,000 - 6,750 =38,250 you'll pay taxes on 38,250 so your net gain would be 6750 * tax rate.

Besides, I'd be quite surprised to know that there is no equivalent tax relief for a contractor.

Man, you are a disaster, you wouldn't pass the GCSE either. No wonder some polish IT person is taking your job because of your numeracy deficiencies.

[Cyberman]

I also like the way that even though it's €45K he's managed to mentally up it to €60K.

Just think, a 6 monther is actually 3.5 years for dogs.


Oh, and well done darmstadt!

Let me explain more accurately:

As a permie in germany an extra month's salary is paid at Xmas:
45K + 1/12 of salary paid at xmas = 45,000 + 3,750 = 48,750 Euros

As a permie there are paid holidays and bank holidays when no work is done so the benefit is:
30 days leave + 15 Bank holidays paid = 45 days = 8% of 45,000 = 3,600

48,750 + 3,600 = 52,350 Euros

Tax rebate for dual home and travel(flights and car) and tax relief on flat rental............ approx 15% = 6,750 Euros

52,350 + 6.750 = 59,000 Euros

Hence, a contractor needs to earn almost 60,000 Euros to make it beneficial to contract rather than to be permanently employed on 45,000 Euros in Germany.
A contractor would actually have to earn more than that because he has additional costs to cover, such as accountant's fees, and other expenses plus directors and employee NI etc. Then there is the additional time that he expends in his duties as a director(raising invoices/timesheets/expense sheets, cheques, returns to accountant, statutory returns etc), which is a cost in time for which he receives no remuneration. Perhaps 65K would be a more accurate figure.
Of course, if the permie takes sick leave then that is another benefit to be added, but for the purposes of this example, as I have never been off sick as a contractor I am ignoring that factor.