It means that you paying taxes on your pay is equivalent to your employer paying taxes on your pay. If you shift taxes to the employer, then they will reduce your pay accordingly.
It means that you paying taxes on your pay is equivalent to your employer paying taxes on your pay. If you shift taxes to the employer, then they will reduce your pay accordingly.
Never ever once has an employer given me a pay raise when they got a tax cut or a pay cut when they got a tax hike.
Taxes do not feature into salary negotiation. Employers pay as little as they can get away with, while employees want to get as much money as they can.
If you need theoretical worlds with no correspondence to anything ever in actual history to justify your claim, then maybe there is not that much to it.
> Taxes do not feature into salary negotiation
The point is valid based on the context here, but taxes certainly feature in compensation.
Notably if you’re considering moving from a no/low tax locale to a higher one.
Two spectacular examples are the MLB contracts of Shohei Ohtani and Vladimir Guerrero.
Ohtani is getting paid very little ($2M/year) for his 10 years with the Dodgers, the vast majority is deferred to when after he leaves the team (and, notably, probably) California (likely back to Japan).
Vlad’s large contract is padded with a very large (like $175M I think) “signing bonus” to be paid over 10 years. The key point is that money will be earned “where he lives “, which is Florida, not where he plays (Toronto).
Both of these are structured to avoid local (high) tax jurisdictions.
But not just superstar athletes need to consider this. Anyone moving for work to a higher tax locale needs to consider that during salary negotiations.
Where do you live that employer-paid taxes on employee pay have been cut during your career?
I have never lived anywhere where there are employer-paid taxes on employee pay. Have you? Do you even know of a country like that?
The United States has federal payroll taxes of which half are paid by the employer.
Social Security and Medicare (FICA) is not exactly a tax, if that is what you are talking about. There is FUTA (Federal Unemployment Tax) paid by employers, but this is quite low, certainly not a significant portion of tax revenue.
The IRS calls it a tax. In what sense is it not exactly a tax? It’s a mandatory payment to the government. It functions like a tax and it’s called a tax.