Are employment taxes different in the US?

"Paul McEwan" wrote in message news:ZpXJc.1199$ snipped-for-privacy@news-text.cableinet.net...

There are many factors to take into account, but generally speaking, taxes and other compulsory deductions are less in the US than over here. Also the cost of living is considerably less there (except perhaps in NYC). Americans often say what costs $1 in US is around 1 in UK. With =$1.85, it's getting close to a half. But there is a hefty deduction for medical care. Furthermore, the salary structure is considerably different over there. The gap between the highest and lowest paid is much wider, and bonus and commission is more important than basic pay, even for non-sales staff. And the bosses hire and fire at will.

Alec

seems to suggest that PPP tax rates are lower in the UK above 90,000 USD for the household.

Jim.

It's impossible to make comments about the US in general, as it can make a huge difference depending on in which US city (let alone county or state) the person is working.

This area is a minefield, and you should consider paying for proper tax advice. As an example, PwC (an no doubt most other large firms) has an entire department within its tax service line (International Assignment Solutions) dedicated to giving advice on this issue.

It depends how the household earnings are split. The second graph on the above site shows a single earner household is taxed less in the US unless income is above $210,000. US taxes are fairly consistent regardless of how the household income is split, the UK and the other countries featured tax a household much more if it only has a single earner. It would be interesting to see France on those graphs, and how they compare when child allowances/tax credits/benefits are taken into account.

Also the third graph shows that if you've got a large mortgage you need to earn nearly $300,000 to be better off in the UK!

Yes, but that's a proper nuclear family, we don't have that many of those in this country these days.

So the generally speaking only really applies if you're married and have a mortgage, without those elements, UK taxes are lower..

Jim.

Really? I know loads.

OR have a mortgage, not "and". And only if you earn over $90,000. The site uses "purchasing power" exchange rates which is probably not far off 1 = $1, so you'd have to be earning triple the UK average salary.

If you have a mortgage or a non earning spouse then you have to earn a very large income to be better off in the UK.

So I'd estimate that for over 95% of people, taxes are lower in the US.

A household income of 57,000, (See OECD site for 2003 PPP rates) so just about able to afford a mortgage on a flat in the UK.

Jim.

OK. So if you earn over 57,000 you are likely to have a mortgage, and so be better off in the US. If you earn under 57,000 you are better off in the US regardless. So for the vast majority of people, taxes are higher in the UK.