In which countries and cities are developers earning more when taxes and cost of living are taken into account?

If we compare the salary of a software developer with a middle qualification in Moscow, Los Angeles and San Francisco, taking the data on salaries that the developers themselves leave on specialized salary monitoring services, we will see: 

• In Moscow, the salary of such a developer at the end of 2019 is 130 rubles. per month (According to salary service on moikrug.ru)
• In San Francisco - $ 9 per month, which is approximately equal to 404 rubles. per month (According to salary service at glassdoor.com).

At first glance, a developer in San Francisco earns more than 4 times the salary. Most often, the comparison ends here, they make a sad conclusion about the colossal gap in wages and remember Peter the pig.

But at least two things are overlooked:

1. In Russia, the salary is already indicated after the deduction of income tax, which in our country is 13%, and in the USA - before the deduction of such a tax, which is progressive, depends on the level of income, marital status and state, and ranges from 10 to 60%.
2. In addition, the cost of local goods and services in Moscow and San Francisco is very different. According to service numbeo.com the cost of consumer goods and rental housing in San Francisco is almost 3 times higher than in Moscow.

Thus, if you take into account taxes, it turns out that you need to compare the salary of 130 rubles. in Moscow with a salary of 000 rubles. in San Francisco (subtract 248% federal and 000% state income tax from salary). And if you also take into account the cost of living, then from 28 rubles. (we divide the salary by 28 - so many times the cost of living here is higher than in Moscow). 

And it turns out that a semi-skilled software developer in Moscow can afford much more local goods and services on his salary than his colleague in San Francisco.

Surprised by the once received calculation, we decided to compare the salaries of middles in Moscow with the salaries of middles in other cities of the world, often found in the tops of the best cities for developers. The result was a table of 45 cities, along with 12 Russian cities with a population of over a million. Where do you think Moscow ended up? 

Calculation methodology

Initial data

Salaries

• Developer salaries in Russian cities were taken from the salary calculator moikrug.ru (data taken for the 2nd half of 2019), salaries of developers from Kyiv - from the calculator Dou.ua (data taken for June-July 2019), salaries of developers from Minsk - from the calculator Dev.by (salaries are taken for 2019), salaries of other cities - from the calculator glassdoor.com. All salaries are translated into rubles at the exchange rate as of 08.11.19/XNUMX/XNUMX.
• On all of the above services, users themselves indicate their specialization, qualifications, place of residence and the salaries that they receive at the moment
• To search for salaries on glassdoor, dou.ua and dev.by, the query “software developer” was used (corresponds to the middle level for Russia), in case of lack of data, the query “software engineer” was used.

the cost of living

• To calculate the cost of living in cities around the world, we used the Cost of Living Plus Rent Index, which is calculated by the service numbeo.com, comparing the prices of consumer goods, including rent, with those in New York.

Taxes

• We took the taxes of the cities of the world from a variety of open sources, we apply link to our tax catalog, which we as a result compiled, and its abbreviated tabular version. Anyone can double-check the information or suggest edits.
• In some countries, a very differentiated tax rate is applied, which depends not only on the amount of income, but also on many other factors: the presence of a family, children, joint filing of a declaration, religious denomination, and so on. Therefore, for simplicity, we assumed that the worker is single, has no children, and does not belong to any religious denomination.
• We believe that all salaries in Russia, Ukraine and Belarus are indicated after the payment of taxes, and in other countries - before payment.

What did we count

Knowing taxes for each city, as well as the median salary and average cost of living relative to Moscow, we were able to compare how many goods and services can be bought in each city compared to similar goods and services in Moscow.

For ourselves, we called it the index of provision with goods, services and rental housing, or in short - security index. 

If for a city this index, for example, is equal to 1,5, then for that salary, with those prices and taxes that are in the city, you can buy goods one and a half times more than in Moscow.

A bit of math:

• Let Sm be the median salary in Moscow (Salary) and Cm be the cost of goods, services and apartment rentals in Moscow (Costs). Then Qm = Sm / Cm is the number of goods that can be bought in Moscow for a salary (Quantity).
• Let Sx be the median salary in city X, Cx be the cost of goods, services and apartment rentals in city X. Then Qx = Sx / Cx is the number of goods that can be bought in city X with a salary.
• Qx/Qm - That's what it is endowment indexwhich we need.

How to calculate this index, having only the cost of living and rent index from numbeo? That's how: 

• Im = Cx / Cm is the cost of living index of city X compared to Moscow: it shows how many times the cost of goods, services and apartment rentals in city X is more or less than the same cost in Moscow. In the original data, we have a similar Numbeo index, which compares all cities with New York. We easily translated it into an index that compares all cities with Moscow. (Im = In/Imn * 100, where In is the cost of living index in the city, and Imn is the cost of living index in Moscow on Nambeo).
• Qx / Qm = (Sx / Cx) / (Sm / Cm) = (Sx / Sm) / (Cx / Cm) = (Sx / Sm) / Im

That is, to get the index of availability of goods, services and rental housing for a city, you need to divide the median salary of this city by the median salary in Moscow and then divide it by the index of the cost of living of this city compared to Moscow.

Rating of cities in the world according to the index of provision with local goods, services and rental housing

number	City	GROSS salary (before taxes, thousand rubles)	Tax (income + social security)	NET salary (after taxes, thousand rubles)	Index cost of living (relative to Moscow)	Index provision (relative to Moscow)
1	Vancouver	452	20,5% + 6,72%	356	164,14	167,02
2	Austin	436	25,00%	327	159,16	158,04
3	Seattle	536	28,00%	386	200,34	148,18
4	Kiev	155	18,00%	127	70,07	139,43
5	Minsk	126	13,00%	115	63,65	138,99
6	Montreal	287	20,5% + 6,72%	226	125,70	138,48
7	Berlin	310	25,50%	231	129,70	136,98
8	Chicago	438	30,00%	307	181,73	129,78
9	Бостон	480	30,00%	336	210,07	123,03
10	Toronto	319	20,5% + 6,72%	252	171,56	112,78
11	Krasnodar	101	13,00%	88	60,54	111,81
12	Tomsk	92	13,00%	80	56,39	109,12
13	St. Petersburg	126	13,00%	110	77,61	109,03
14	Novosibirsk	102	13,00%	89	63,41	107,96
15	Hong Kong	360	13,00%	284	203,81	107,14
16	Voronezh	92	13,00%	80	58,06	105,98
17	Helsinki	274	29,15%	194	145,75	102,46
18	Moscow	149	13,00%	130	100,00	100,00
19	Samara	92	13,00%	80	63,05	97,61
20	Kazan	90	13,00%	78	62,24	96,40
21	Amsterdam	371	40,85%	219	175,73	96,06
22	Ekaterinburg	92	13,00%	80	64,22	95,82
23	Prague	162	13,00%	120	98,23	93,88
24	Warsaw	128	13,00%	105	86,46	93,39
25	Nizhny Novgorod	92	13,00%	80	66,05	93,17
26	Budapest	116	13,00%	97	80,92	92,62
27	New York	482	36,82%	305	260,96	89,77
28	Permian	76	13,00%	66	59,13	85,86
29	Los Angeles	496	56,00%	218	195,90	85,69
30	London	314	32,00%	214	197,23	83,27
31	Singapore	278	27,00%	203	188,94	82,62
32	Chelyabinsk	69	13,00%	60	56,81	81,24
33	Sofia	94	10% + 13,78%	73	71,35	78,64
34	Krasnoyarsk	71	13,00%	62	61,85	77,11
35	Madrid	181	30% + 6,35%	119	119,62	76,30
36	Tel Aviv	392	50% + 12%	172	174,16	76,18
37	Sydney	330	47% + 2%	171	176,15	74,85
38	Paris	279	39,70%	168	174,79	74,04
39	Bangalore	52	10% + 10%	46	48,90	72,88
40	San Francisco	564	56,00%	248	270,80	70,49
41	Tallinn	147	20% + 33%	79	94,28	64,28
42	Rome	165	27% + 9,19%	109	139,56	60,29
43	Dublin	272	41% + 10,75%	143	184,71	59,65
44	Bucharest	80	35% + 10%	47	69,31	51,94
45	Stockholm	300	80,00%	60	147,65	31,26

Such unexpected and even somewhat surprising data turned out. 

We are aware that the resulting figures do not reveal the full depth of such a broad concept as the quality of life, which includes: ecology, medical care, safety, transport accessibility, diversity of the urban environment, variety of activities, travel and much more.

Nevertheless, we clearly and with specific figures have shown that despite the fact that in many countries the salaries of developers seem to be very high compared to Russian ones, few people see that in these countries both taxes and the cost of living are much higher than domestic ones. . As a result, it leads to an equalization of life opportunities, and today a developer can live in Moscow or St. Petersburg richer and more interesting than in Paris or Tel Aviv.

We are preparing a big report on salaries of IT specialists for the second half of 2019and ask you to share your current salary information in our salary calculator.

After that, you can find out the salary for any field and any technology by setting the necessary filters in the calculator. But most importantly, you will help us make each next study more accurate and useful.

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Source: habr.com