Are you considering working abroad? The US and Europe are some of the most popular destinations for expats and foreign executives. Yet, they offer different career opportunities and income for employees. So which place is the best for you?
Salaries in the US are about twice higher than in Europe. Yet, European countries offer better social benefits, health care, and various free services for employees. Whereas in the US, people spend more money on retirement and medical care.
Working in both the US and Europe can be advantageous depending on your preferences. Someone with a need for security might prefer Europe, and someone who is striving for a career – the US. Furthermore, salaries and cost of living range between the countries and states. Hence, you need to consider all these factors before making a decision. Learn about salaries in the UK vs US.
Salaries in the US vs Europe
Salaries for low-qualified workers
Jobs which doesn’t require a college degree are often better paid in Europe than in the US.
Salaries for highly qualified workers and specialists
Highly skilled and specialized people with good educational backgrounds will find higher wages in the US.
For example, business and information technology consultants, software engineers, logistics workers, doctors, and medical specialists will have higher incomes in the US than in most European countries.
Salaries in Europe and in the US differ significantly and depend on many factors. European Union includes 27 member states. However, there are more countries that aren’t included or are only a part of the Schengen but are closely located to the EU states.
On the other hand, the US has 50 states, which provide different standards of living, cost of living, and hence, income. Read a comprehensive article about salaries in the US.
Furthermore, some occupations tend to earn more in the US and some in the EU. For instance, people without particular education (workers) make more money in the developed European countries.
According to the statistics, a full-time employee’s average gross monthly salary in Germany is 3,106 EUR, Denmark is 4,217 EUR, followed by Luxembourg at 3,980 EUR, the Netherlands at 3,232 EUR, and the UK at 3,135 EUR.
Why are European salaries lower than in the US?
Employee’s benefits in Europe
There are some significant differences in social welfare for employees in the US and European countries.
Healthcare is always covered and is usually more accessible in the US than the “free” healthcare in Europe.
2. Vacation days
In Europe, employees get more vacation days than in the US. The average software engineer would have around 21 vacation days per year, compared to 28 days in Europe.
Moreover, European countries have more public holidays, which adds to the total number of free days.
3. Retirement benefits
Europe cares about the retirement of its residents; employers and employees pay pension taxes every month. In contrast, the US offers numerous retirement saving options, where you can deposit money independently.
On the example of Germany, you can read an in-depth income comparison between the US and Europe.
Not all income is the same
However, we shouldn’t underestimate the factors that influence salaries in European countries and in the US. For instance, the cost of living in the UK and Denmark is significantly higher than in Germany and many American states.
Yet, living costs in New York will beat all European countries, with the exception of Switzerland.
Furthermore, the tax burden of residents should be considered too. Danish citizens pay significantly higher taxes than Germans, yet their social security contributions are lower.
Additionally, some European counties provide very low salaries for residents, such as:
- Bulgaria, with a gross income of €306
- Lithuania – €612
- Hungary – with an average of €826
Some countries fall into the middle, with Cyprus at 2,012 EUR, Greece at 1,929 EUR, and Slovenia at 1,655 EUR.
Salaries in Europe also depend on the unemployment rate. The higher the rate, the lower the income tends to be.
Unemployment rates in the EU in August 2021:
Plus, in all European countries, residents pay different amounts in taxes and social security contributions. In the graph below, you can see the part of the salary that actually lands in the employee’s bank account.
Dark blue color – taxes; blue – social security payments residents pay in each country.
Also, the US has unequal income taxes for each state, yet the difference isn’t as significant as in the EU.
Salaries in the US range significantly. You can earn as little as 20k and up to 300k in a top position.
Furthermore, professionals in management earn much more in the US than in European countries or many other developed countries. If you are willing to pursue a career, American companies can provide great opportunities and a very high income.
Why are salaries in the US so high?
Well, similar to the issue with a low income in Europe, the US offers higher pay-check for a reason.
But not all is as bright as it seems. For example, a 21 years old couple living in California, with a $100,000 yearly gross salary (or $8,333 monthly), will pay in taxes:
- Federal withholding taxes $1,200
- Social Security taxes $516
- Medicare $120
- California taxes $586
- CA SDI $75
- Monthly Net Pay $5,833.70
Consequently, the monthly net pay ends up at $5,833.
And following obligatory expenses:
- Flat in San Francisco $2,000–3,000
- Health insurance $360
- Debt payments
This couple will most likely end up with about $2,000 at the end of the month before paying for a debt.
People need to remember that the US doesn’t have an excellent social security system as Europe does. The state won’t take care of everything. You even will need to take care of your retirement.
Consequently, a person living in the US needs to have enough savings to provide for themselves in case of any difficult situation, such as:
- losing the job
- health issues
Plus, education in the US isn’t as affordable as in most European countries. Hence all parents must have enough money for their kids to go to school, or university.
Facts about salaries in the US:
- Salaries in the US also vary by factors such as gender, education, and more.
- Jobs in large metropolitan cities, which have higher living costs, also tend to pay more than jobs in more rural and suburban areas.
- Workers with a certificate or diploma earn on average 17% more than their peers who only reached the high school level.
- Employees who earned a Bachelor’s Degree earn 24% more than those who only managed to attain a certificate or diploma.
- Professionals who attained a Master’s Degree are awarded salaries that are 29% more than those with a Bachelor’s Degree.
- Ph.D. holders earn 23% more than Master’s Degree holders on average while doing the same job.
We shouldn’t forget about the tax obligations employees have in Europe and the US. Read the detailed example of taxes in Germany vs the US here.
Example of salary difference US vs Europe
Taxes play one of the most significant roles in our income. The difference can be huge – from 10% to 50%, depending on the country.
Let’s compare salaries in two cities, Zurich, Switzerland, and Seattle, US:
- In Seattle, company Google pays an average of $148k in base salary and $68k in stocks per year, for total compensation of $216k per year or $158k after tax.
- In Zurich, Google pays a base salary of CHF 146k and 30k in stock bonuses, for total compensation of CHF 176k, for a net pay of $138k per year after tax.
Cost of living in Seattle vs Zurich:
The most considerable expense in both cities is rent, whereas food, electronics, dining, etc., take a smaller portion of the income and are comparable across all Western countries.
- A 3-bedroom apartment in downtown Seattle costs around $3.9k per month or $47k per year, leaving an employee $111k per year or $9,25k per month to disposal.
- A 3-bedroom flat in downtown Zurich will cost you $4.2k per month or $50k per year, leaving you $88k per year or $7,33k per month.
Consequently, the employee’s net income at Google or Facebook in Zurich, Switzerland, will be 25% lower than in Seattle, US.
Furthermore, Switzerland has some of the lower taxes in Europe, and your net salary in other European countries will be even lower.
European companies can rarely afford to pay comparable to US salaries to the IT personnel. The better qualified and sought after the employee is, the more significant the difference is.
A Principal Engineer in Silicon Valley can earn up to $600k/year – a sum completely unimaginable anywhere in Europe.
Average salaries in the US vs Europe
The difference in salaries also lies in the difference between average income in the US vs Europe. For example, in the US, much more people earn above average, while in Europe, most people get paid more equally. This particularly applies to states of the European Union since the economy is more regulated.
The average American income levels from the US Bureau of Labor Statistics (BLS), in 2020, the average US income came in at $83,886 per year gross.
The median annual income of all full-time workers in the US was $51,480 in the second quarter of 2021.
There is a large gap between salaries in the US, which isn’t common in European countries. For example, a casual worker makes $25,000 and an executive $150,000.
Therefore, particularly talented and educated people can achieve higher financial results in the US than in Europe.
Read a comprehensive article about salaries in the US.
Facts about average salary in the US in 2021:
- The average salary in the United States is $82,412 USD per year. The most typical earning is $52,000 USD. All data are based on 20,675 salary surveys.
- Salaries range from $24,000 (lowest average) to $423,000 (highest average)
- The best-paid careers are Engineers & Technicians V with an average income of $124,524 USD and Management & Business with $110,097 USD.
- People with different experiences earn different salaries. Employees with 16-20 years of experience receive $98,926 USD. Professionals with 20+ years of experience receive a salary of $108,877 USD.
In the following table, you can see the average salary in the US for a particular position. Overall, the numbers are higher than in Europe.
The average salary in the US in 2021 among different jobs:
|Job title||Gross annual salary 2021|
|General Manager||$126,189 USD|
|Other Engineer Career||$125,618 USD|
|Engineering Manager||$122,328 USD|
|Finance Manager||$111,042 USD|
|IT Manager||$109,553 USD|
|Program Manager||$107,639 USD|
|Software Engineer||$107,389 USD|
|Construction Manager||$106,357 USD|
|CPA – Certified Public Accountant||$104,434 USD|
|IT Project Manager||$101,918 USD|
|Other Management Career||$95,589 USD|
|University Professor||$95,188 USD|
|Operations Manager||$94,731 USD|
|Construction Project Manager||$93,563 USD|
|Business Manager||$93,396 USD|
|Other IT Career||$93,228 USD|
|Project Manager||$92,937 USD|
|Human Resources Manager||$92,174 USD|
|Other Sales Career||$91,462 USD|
|Marketing Manager||$91,343 USD|
|Software Developer||$91,332 USD|
|Other Finance Career||$88,675 USD|
|Other Human Resource Career||$85,935 USD|
|System Analyst||$82,008 USD|
|Salesmen or Saleswomen||$80,996 USD|
|Financial Analyst||$80,729 USD|
|Healthcare Management||$80,452 USD|
|Human Resource||$78,658 USD|
|Electrical Engineer||$77,767 USD|
|Account Manager||$76,255 USD|
|Registered Nurse||$75,210 USD|
|Other Public Sector Career||$72,746 USD|
|Mechanical Engineer||$72,166 USD|
|System Administrator||$71,625 USD|
|Other Manufacturing Career||$67,653 USD|
|Other Medical Career||$66,253 USD|
|Senior Accountant||$65,369 USD|
|Other Constr. & Labor Career||$63,578 USD|
|IT Coordinator||$63,091 USD|
|Office Manager||$61,427 USD|
|Other Education Career||$57,243 USD|
|Restaurant Manager||$56,995 USD|
|Customer Service Manager||$54,880 USD|
|Staff Accountant||$49,870 USD|
|Other Service Career||$47,051 USD|
|Call Center||$37,860 USD|
|Administrative Assistant||$36,606 USD|
According to the statistics, income in the US is more unequal than in Europe, with a difference of $124,056 in average salaries among various jobs.
- about 34,1% of Americans earn over $100,000
- 15,5% of the population makes between $100,000 and $149,999
- 8,3% of Americans makes between $150,000 and $199,999
- 10,3% of the US population has an annual salary over $200,000
These numbers are unheard of in most European countries.
In 2020, the average hourly labor cost was €28,5 in the EU, ranging from €6,5 in Bulgaria to €45,8 in Denmark.
Average annual income
In 2020, the net annual earnings of an average working couple with two children were €51,400 in the EU, ranging from €12,800 in Bulgaria to €92,000 in Luxembourg.
Moreover, every European country has a different average salary. Numbers range significantly.
Average wages are highest in:
- Switzerland €72,000
- Norway €61,000
- Denmark €56,000
And lowest in:
- Estonia at €13,000
- Portugal €15,500
- Greece €18,500
Below you can see the average salaries and income tax for each European country in 2021.
|Country||Average net salary in €||Average income tax|
|Bosnia and Herzegovina||429||35.59%|
Ranking for average annual salary in Europe in 2021:
European cities with the highest average net salary:
|City in Europe||Average monthly salary after tax, USD|
|London, United Kingdom||4,154|
|Saint Helier, Jersey||3,896|
|Oxford, United Kingdom||3,546|
|Derby, United Kingdom||3,432|
|Reading, United Kingdom||3,230|
Standard of living
In each European country, the standard of living is different. Some are known for the highest standards, like Switzerland, and some for the lowest, like Balkan countries or Portugal (EU). Moreover, the standard of living influences the average salary significantly.
• Standard of living is highest in: Switzerland, Denmark, and Germany. It can be comparable to the US. However, the cost of living can be relatively high in these countries, and average salaries and purchasing power are also relatively high.
• Standard of living is lowest in: Estonia, Greece, and Portugal. Although the cost of living is relatively low in these countries, average wages and purchasing power are the lowest in the European Union.
Best balance between salary and cost of living
The UK is one of the best countries to work in Europe and earn a good salary while still enjoying the average cost of living. In fact, in the UK, the average city-based worker can afford to buy over 30% more than their equivalent in New York City.
Consequently, if someone moves from the UK to New York City, they would have to earn 30% more than the average New Yorker in order to sustain a similar lifestyle they have had in the UK.
Which European countries have the highest salaries?
Generally, Switzerland, the UK, Iceland, Denmark, Norway, and Germany are recognized as countries with the highest salaries in Europe.
Top 10 highest paying countries in Europe in 2020 (non including Switzerland):
|Rank||Country||Average gross monthly salary|
Which country in the EU is the best for international workers?
When moving to work in another country, one should look at more factors than just salary. For example, a high percentage of English speaking population is essential if you don’t speak the local language.
Here are some of the best countries to relocate to in the EU. The UK and Switzerland are some of the best destinations for expats, but they aren’t in the EU.
|COUNTRY||AVERAGE NET WAGE||ENGLISH SPEAKING POPULATION||UNEMPLOYMENT RATE|
Cost of living in the US vs Europe
When talking about salaries, we shouldn’t forget about the cost of living in each country. In fact, you might earn a lot but will spend it all by the end of the month.
For example, this is pretty much the case with the US cities like New York and San Francisco. For example, New York is almost twice more expensive as most European cities.
Facts about the cost of living in Europe:
- Overall, Europe has a lower cost of living than the US due to lower healthcare expenses and low inflation.
- However, taxes are higher in most European countries; often wages are lower than in the US; hence, you will have less disposable income.
Yet, where exactly a person lives in the United States and Europe makes a significant difference to the cost of living. For example, San Francisco, New York City, and Washington, DC, have the highest rental prices in the US.
At the same time, Zurich, Copenhagen, London, Paris, Hamburg, and Barcelona have the highest cost of living in Europe.
In fact, Geneva and Zurich are even more expensive than New York City.
Europe’s other cities are cheaper than New York City, with some cities (notably Tartu, Porto, Thessaloniki, Tallinn, Athens, and Lisbon) markedly so.
The most expensive cities in Europe are:
The least expensive cities in Europe are:
These cities are 60%-70% cheaper than NYC.
Yet, people spend a significant amount of money on health care in the US, while it’s “free” in most European countries. Your insurance premiums are deducted with other taxes, and you can use all medical services for free.
The cost of living can look drastically different depending on where you live in the US. A single person needs about $29,118 a year ($2,426 monthly) to live in Brownsville, Texas, but in San Francisco, California, they will need more than double $69,072 ($5,756 monthly) to keep up with the same lifestyle.
Cost of living for a single person in different US cities:
- Austin, Texas $3,197
- Los Angeles $3,569
- New York $4,277
Mississippi is one of the cheapest states to live in, and Hawaii is the most expensive.
Taxes Europe vs the US
Well, taxes are indeed higher in Europe than in the US. Only sales tax (VAT) can be up to 25%.
Income taxes range from country to country. In the picture below, you can see income tax rates across the European countries in 2020.
And how taxes in the US differ from the European tax burden.
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