Honest [tough] question: Why don't you work for clients that pay more? Just because you're in Southern Europe doesn't mean the person paying the invoices has to be.

I have friends who save ungodly amounts (in the 40k/year range) and their employers/clients still think they're damn cheap.

Income arbitrage. Look it up :)

I work for a international company, mainly based in the US. I get paid what a local developer gets paid, our chinese employees get paid what the local norm is there etc. Do other companies just outright decide salary based on where the company HQ is?

Call me cynical, but I'm a bit skeptical that a company would pay more than they had to.

Note: Assuming of course your role is not super vital for the whole company or some such.

If you are as valuable as a local developer, then they will pay you as such. It's a business. They pay for value.

And no, your salary/rate isn't defined by where the company HQ is. That part defines their price tolerance. The price is defined primarily by how much you ask for and what you can offer in return.

> The price is defined primarily by how much you ask for and what you can offer in return.

I couldn't agree more. I know a lot of developers that have the mentality to just accept what they are offered without negotiating. It's up to you to get a good price for the value you bring to the company. Negotiation is the best way to significantly increase your salary, regardless of your technical skills.

Patio said it best: http://www.kalzumeus.com/2012/01/23/salary-negotiation/

Its set by supply and demand. You need competitive markets to reach your value.

If you have no other opportunities and no one is offering anything better than you have to accept that. Than they capture the rest of the value.

I doubt this, if there's a chance other local devs might then ask for more.

> Call me cynical, but I'm a bit skeptical that a company would pay more than they had to.

I think it also depends on the type of company and what they are after -- are they looking to save money by outsourcing or are they looking to expand their talent pool? If they are looking to expand their talent pool, it is more likely to get closer to what the company HQ is, minus some "remote work" discount.

After all, if I'm the manager of some San Francisco tech. company and I can get a great programmer (even by San Francisco standards) for a 20% discount to local talent, which I know is a 20-30% rate above what they programmer will be paid in their community in a fly over state -- it's win-win for everyone involved and they are much less likely to leave.

> Call me cynical, but I'm a bit skeptical that a company would pay more than they had to.

Companies will not pay more than they have to, but if you demonstrate your worth they will be happy to pay it.

I make high six figures and am completely location independent.

High six figures as in close to seven figures? As a programmer?

No, more like the >$200k range.

Mind me asking where most of their clients are located as well as themselves?

Exactly what ddorian43 said.

My particular friends (and me of old) are located in Slovenia, clients are in San Francisco. You can have a decent life in Slovenia for $20k/year. You can easily get a gig in San Francisco for $60k/year. Probably even easier for $100k/year because of the whole signaling thing.

I wasn't able to save as much as my friends are because of lifestyle inflation, but I sure had a lot of fun. My margin isn't as high now that I live in San Francisco, but my glass ceiling is higher. Tradeoffs :)

PS: as you can infer from above, you can also always move. Nobody says you have to stay in a bad economy.

Thanks for the reply and the info provided. My personal opinion regarding the ability to move from a bad economy is that this is not always as easy as it looks. Even if you are european with an EU passport you are very likely to come up against some high language barriers etc. Although that could be a challenge some people might jump at.

For example I know that the UK (and mostly London) is extremely tolerant of non native English speakers. However from experience I know this will count against you when people are looking to hire (I was on the hiring side at one point so know how my managers perceived this.)

Germany is again another example where unless you speak really good German you will have some pretty tough challenges. I had a friend who grew up speaking German as a second language, who completed his masters in Germany, be told by his boss to go for German writing classes if he wants to get anywhere in their company.

Europe might be one big open job market but Language honestly makes it far more difficult than it seems at first. This also goes for settling into your new country even if you are working for US or UK companies as your day job.

> you are very likely to come up against some high language barriers etc.

This is not a problem I personally experienced for English speaking countries. Started learning when I was in kindergarten, always immersed in the culture via TV and internet, did English and English writing as a hobby pretty much since starting high school. Until they hear my accent, most people assume I'm a native speaker.

So I lucked out on that front.

The hard part for me was the visa. But that is also a solvable problem.

> The hard part for me was the visa. But that is also a solvable problem.

That is something I did not even want to mention due to the challenges it brings. It is not insurmountable but does sometimes come at a high cost of both money, time and stress.

$48k/y gig for US client converts in less than 2000 eur/month net with some creative book-keeping.

Rent and utilities in Ljubljana cost us about 800 eur. What is left is maybe enough for one person, who will never own any property.

$20k/y is close to a welfare level in Slovenia, except maybe in countryside.

These are specifics and probably not interesting to the rest of HN.

BUT, you can open a sole proprietorship, fill out some forms, and voila: you pay 4% taxes. After all the healthcare and stuff, you end up with 1068 euro net on a $20k (17k eur) yearly revenue.

At $48k/year, you get 3040 euro/month net. Now you're getting paid almost as much as the president. Your taxes will go up a bit next year, so save up, but for the first year you have plenty of extra money in the bank that you can leverage for making even more money.

And if you target San Francisco, you're competing with people who are asking for $130k+/year.

;)

That is REALLY interesting! Quite a useful and nice way to work with tax. What does the percentage increase to in the following year?

It is a shame that the UK does not have anything like this. The best you can hope for is to contract and that give an average tax of around 26% to 30% depending on how creative your bookkeeper is.

Germany as my alternative example is quite a different story, there being freelance is very difficult due to the cost of healthcare that you HAVE to pay and their tax law is extremely complicated, you pay loads more tax than the UK for example. I know some friends who too permanent employment in Germany as it was more beneficial than being freelance.

> less than 2000 eur/month

Sure, you'll always be renting, but this is still significantly better than working for most local companies.

The GDP per capita of slovenia is about 20k. So pretty much everyone needs welfare? I don't believe that.

Invoicing 1500 eur/month as a company, minus operation costs, minus taxes, gives 800-850 eur/month, which is barely livable. Lawful minimum is about 750 eur.

Swizec is right, there are ways to incorporate to pay less tax, but not everyone can go that way.

Example you work for NewYork/SanFrancisco/etc company and live in Italy. You make $80K and save half of that. Depending on how good you are as a developer + finding better clients you can live in a cheaper country, say Bulgaria/Albania/etc and make more than 80K+(ex Salvatore Sanfilipo though he's special). Usually the more you get paid by the clients, the better they treat you as a human/professional. The clients who will pay you the most, are the ones that pay the most local-salaries, which is Sf,Ny,Washington etc, major us-cities. Maybe London a little too, but probably not (I don't know london having 150K salaries locally?).

Thank you very much for the reply. Yes if you move to (or live) in an area in europe that is cheaper than say London, Paris or the other big cities (and most places in Scandinavian :) ) then this is an option.

At the moment really good developers in London can hit £80k+ per year in full-time salary but living costs locally are insane. If you are contracting in London you can make good money but you are still hindered by the high living costs. One big drawback is that I have seen very little remote work opportunities for London companies to anyone not living locally. This gets more pronounced the closer you move to the Data Science / Business Intelligence space, but even for Web Dev etc it looks to be not that common. So as you say it might have to be the big cities in the US as it seems the US are much further in accepting remote work than where I currently am.