Input to realistically compare an executive "German Arbeitsvertrag" to US job/offers wanted

47 posts in this topic

Single/M/41/no kids

I've been talking to a large German organization about a Sr leadership position located in Germany. After some initial back and forth on what an Arbeitsvertrag would feature I have made a spreadsheet to try to compare competing offers.

The comparison factors I am considering are:

  • PTO (US 20 / DE 30)

  • Paid holidays (US 10 / DE 31)

  • Cost of living (US city 78.72 / DE city 72.83 using numbeo.com)

  • Currency fluctuation

  • Tax rates (US 38.6% / DE 44.5% using brutto-netto-rechner.info)

  • Pension funds (still lots of questions for the employer)

  • Severance

  • Social security services (not all that applicable; I have good healthcare in the US, hardly ever get sick, and don't expect to have kids anytime soon)

  • Qualitative factors (how much I would enjoy the job, home base, travel costs to get away etc)

  • Job protection/safety

  • Working hours/ working times/ overtime regulations (US/DE all inclusive; same 40hr baseline)

  • Period of notice (US none, DE 3 months)

My questions:

  • Am I missing any critical aspects in the list above to make the "translation"?

  • It seems there would be no yearly vesting of LTIs in my contract as I am used to in the US but everything vests after 3 years; is that common?

  • How negotiable is PTO days typically in DE? it was a common negotiation item in my US contracts

  • Does the tax rate seem about right on the DE side for a single male, no kids with a base of approx. $300k EUR

  • Can I assume Bonus payments to be taxed at the same rate as my base income or progressively?

  • Is it true that there are no severance constructs in DE? I had established 9-12mos in the US for leadership positions

Thanks much for any input!

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I would think a "senior leader" would be able to resolve these questions for himself...hence, "senior leader" title.  

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6 hours ago, pppez80 said:
  • Pension funds (still lots of questions for the employer)

  • [..]

  • Social security services (not all that applicable; I have good healthcare in the US, hardly ever get sick, and don't expect to have kids anytime soon)

There is a public pension system in Germany, and you do not have a way around it. You have to contribute.

 

There is a healthcare system in Germany, and you do not have a way around it.  You have to contribute.

 

 

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3 minutes ago, franklan said:

There is a public pension system in Germany, and you do not have a way around it. You have to contribute.

 

There is a healthcare system in Germany, and you do not have a way around it.  You have to contribute.

 

 

 

Unless you have Beamte status (small number of people in public service who have other fixed arrangements). . 

 

Nevertheless this post should probably be fixed to the top of most topics as mandatory reading before asking a first question. 

 

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6 hours ago, pppez80 said:

 

 

I guess these are not 44.5% taxes, but 44.5% taxes and social security contributions (health insurance, long-term care insurance, pension insurance and unemployment insurance). Correct?

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The OP can opt out of the church tax and the solidarity tax is peanuts. Saying that it still annoys me paying it.

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5 minutes ago, McDee said:

...and the solidarity tax is peanuts. Saying that it still annoys me paying it.

Peanuts? Will you then reimburse me for the 14 years I'm paying this ??

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Well, it sounds like small change you could easily miss. It costs me a 10-day holiday on Mallorca each year :).

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2 hours ago, McDee said:

The OP can opt out of the church tax and the solidarity tax is peanuts. Saying that it still annoys me paying it.

 

one can try to opt out of church tax but afaik if you were ever baptized that can be easier said than done. 

 

anyway I was just pointing it out as one or both of these also would have been included in the 44.5% figure above.

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Very very easy to do. Just admit you are wrong.?

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well…. back to the original question…. when comparing a job offer in Germany to one in the US you are actually faced with the old "apple or orange" problem.

I spent the past ~14 years left of the pond (working pretty much the exact same job as the ~25 years before that), and am now back in Germany - will be starting pretty much the exact same job as before, on October 1st.

People on both sides of the Atlantic ask the same question: "where do you prefer working, and why?"

That is a very philosophical question!

Even looking at the mere numbers, you can't really compare the two countries. It seems that Germany has a slight advantage for people seeking security, stability, dependability, and some long-term life-planning.

The US, on the other hand, seems to offer more opportunities for rapid growth, higher earnings, and greater flexibility/mobility.

For a single (healthy) middle-aged male, the US may look like the "better fit" - but how long will he stay single, and (healthy) middle-aged?

And then, it all boils down to your personal set of values. What is your goal in life, or at your job? Are you working to make as much money as possible quickly, and then retire early to be finally able to go explore the world? Or are you more interested in a culturally rich, safe, and well developed country that can support you (and your personal freedom of choice) for the long term?

 

If I were in your shoes right now, I'd pick Germany.

 

BTW - as far as the PTO comparison goes - I realized that workers in the US get just as much time off on those measly 20 days (combined vacation and sick days) as people in Germany do on their 30 days of vacation, plus technically unlimited sick days. US workers take about 15% time off during every single work day.  The pace is so much slower! The productivity is so much lower! Efficient workflow organization seems to be a foreign concept!

 

OK - lecture over. In the end, you still have to make up your own mind.

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11 hours ago, lisa13 said:

 

one can try to opt out of church tax but afaik if you were ever baptized that can be easier said than done. 

 

anyway I was just pointing it out as one or both of these also would have been included in the 44.5% figure above.

You just have to fill a Kirchenaustritt form when you move to Germany and you're out, from a tax perspective.

 

Your soul, on the other hand, well it's like Hotel California - you can check out anytime you like but you can never leave.

 

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22 hours ago, pppez80 said:
  • PTO (US 20 / DE 30)

 

As far as I understand it, the concept of PTO doesn't exist in Germany. You just get holiday days. Sick days are unlimited, but you will drop down to around 60% of your wage if your time off goes on longer than about 6 weeks I believe.

 

Don't forget public holidays though. Depending where you live that can be up to another 13 days off a year.

 

But yea, otherwise, it is as karin says. It's apples and oranges. What do you want to get out of the move? If international experience will help you climb the ladder then sure, why not go for it. But the numbers game is just not worth it. It sounds like you are loaded either way. The question is just where do you want to live. Do you want a European lifestyle or a Yankee lifestyle?

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16 hours ago, catjones said:

I would think a "senior leader" would be able to resolve these questions for himself...hence, "senior leader" title.  

I always found the best leaders were those who knew when to bring in outside assistance!

 

I think you're too far down in the weeds OP. On the salary you are looking at here you are easily inside the top 1 percent of income earners. Your quality of life here will be very good. 

 

Your taxes will be significantly higher (you can ignore the distinctions between social contributions, taxes, etc: they are simply the cost of living in Germany) and your figure is close enough.

 

Public safety is much better here, as is transport (including flying). 

 

I think the greatest benefit is working hours are generally respected and you will have more time off.

 

The normal comparisons don't really apply to you as you're so far to the right of the income spectrum that many of the typical negatives of the US and positives of DE simply don't apply.

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7 hours ago, Auswanderer said:
On 8/26/2019, 9:05:42, catjones said:

I would think a "senior leader" would be able to resolve these questions for himself...hence, "senior leader" title.  

I always found the best leaders were those who knew when to bring in outside assistance!

 

A corollary example would be: " I'm an entrepreneur.  I want to found a highly successful tech company that I can take public in less than ten years and retire wealthy.  Tell me what concepts will work, how much I need to invest, where I'll get funding and who should I hire?"  Outside assistance please.

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10 hours ago, Auswanderer said:

I always found the best leaders were those who knew when to bring in outside assistance!

 

I agree it can be a positive trait, but I have also found there is a fine line between bringing in outside assistance and simply dumping your duties on someone else.

 

I have known several "leaders" who have no freaking clue at all what they are doing, but they keep their positions, and even advance them, by duping "underlings" into essentially doing their jobs for them. 

 

eta:  I can't believe I'm saying this, but I agree with the cat on this one.

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21 hours ago, karin_brenig said:

US workers take about 15% time off during every single work day.  The pace is so much slower! The productivity is so much lower! Efficient workflow organization seems to be a foreign concept!

 

 So true. Who amongst us does not have a colleague stateside who is pretty much permanently "just out of the office" having the hair on their toenail permed?

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