I'm looking at accepting a position here in Madrid and was wondering if anyone had an idea what take home to expect. It will be a managers position so it will be a better paying job.

Currently in Germany I take home about 68-70% of the gross (50 -55% for a single) that is one income and one depenant.

It would help alot if I had an idea what the take home might be in talking salary. If taxes are higher than I need more, if lower than I can accept less

thanks

Keep in mind that salaries in Spain are LOW for like-positions in the European Union. So, say you're making (for example) 30,000 Euros per year in Germany. In Spain for a similar position you might make 23-25,000 Euros (or less).

I'm pretty certain German salaries are MUCH higher than those in Spain. As for take-home pay after taxes, I don't know.

Good luck! Saludos, MadridMan

MM: I just returned from a week in Barcelona,and I cannot comprehend how a person can live on the salaries that you are quoteing. I read the real estate ads a both in the papers and on line, and this question has been the topic of a another thread. SOMETHING DOES NOT FIT.

desert dweller,

I can't really speak for MadridMan but I don't think that he was quoting an actual salary....just giving a mathematical example. I have friends who live in Germany and Spain. It seems to me that salaries in Germany appear to be higher. I am not sure however on taxation.

Gretchen6: My point is the cost of living in Europe seems to be very high. I'll give an example, while we were in Barcelona I purchased 2 shirts from El Corte Ingles, the shirts were cotton, and the bill was 110E. Nothing special, just 2 cotton short sleeve shirts. Now how, on the salary that MM is quoteing and others have done so as well, can people live? Mrs. Dweller and I looked at real estate north of Barcelona, towards Andorra, even before the exchange rates were calculated the prices were high. We will not talk about the prices in the UK. Based on our recent trip over, Spain and London makes San Francisco and Hawaii look like travel bargains.

I've noticed that myself the cost of living isn't that much lower than Germany, in Madrid rents are higher but utiitlites seem to be quite a bit cheaper. Food etc seems to be about the same.

From what I've heard 15 -25 percent seems to be normal. In other words you get 75 - 85 percent of your gross which is higher than Germany.

In general wages are 30% lower here, for example a Senior Manager in Germany makes 109.000 euros per year whereas in Spain it would be 75.000 or what a German manager would earn.

Spoke to a freind when she went "local" her wage dropped 12.000 euros, not sure what she was earning before.

In spite of low wages they seem to really party here.

Bad news everyone taxes aren't lower here they're much higher, looking at a 30 to 40 percent drop in take home based on the same gross wage. Secondly the company does 60-40 bonus structuer which means do your job and get 80% of net, go 200% and get the rest.

The worse of it is that the cost of living is 90 to 95 percent of Germany. How the hell can anyone afford to live here!

Not sure what we're going to do!

I dont know if this is what it is but it seems to be that I spend much less to live in Spain... I just came home from a trip the mall today in Florida and spent $250 on stuff I really dont need and can live without.. When I am in spain I spend a lot of money on food but not much else... eating out and food are my main expenses... I just dont go blow money in Spain like I do in the states... I am content with my fewer "things" but I feel I have a much higher quality of life in Spain

update, bit of math error

anything over 30.000 euros per year I would plan on 40 to 45 percent of your paychque gone. Everyone said you do get some back at the end of the year as they don't take into account dependants etc.

Tim Hortons Man: 40 to 45 percent in taxes held from your paycheck, well someone has to pay for that free medical plan, free university education, and the list goes on and on. When one sees the reduction in take home pay, and the reduced standard of living, those things do not seem so "free" any more do they?

Paying 40-45% seems like a small amount considering you get health care and other benefits included. I think the tricky part is finding a job that pays more than 30k euros.

Nevado: We Americans would be rioting in the street if we earned $30,000 per year and 40-45%was withheld in taxes. I don't care what kind of benefits it was going for, that tax base at that income would cause massive revolt. We Americans are very sensitive to the issue of taxes. Every elected crook in Washington D.C. knows it to.

Errr... Let's not make this a USA versus Spain issue, eh? I know some of you are starving for USA-focused political discussions but this is about Spain's take-home pay.

Most people in Spain are not exactly happy to pay the higher taxes but they realize they couldn't live without the benefits. They couldn't imagine paying high health-care costs or sending their kids to university out of their already small salaries. They couldn't imagine how they'd live if they had no or very little pension. If they had a low-level illness the healthcare could destroy their savings - and possibly their future earnings.

Tim Hortons Man, I'm not sure what the tax percentage in Canada is/was for you but I'd imagine it's close to what's paid-out in Spain.

"The Rich and the Healthy have no worries. But if you're not one of these few..."

Saludos, MadridMan - HAPPY to pay taxes

Yeah, for Americans it would be a difficult adjustment, but so is paying $1000/month for family health care for those who aren't afforded the luxury of having it paid for by the employer. Compare it to other European countries; take Denmark, for example, they pay something around 70% (but they aren't making 30k, either). I think the pay in Spain is what makes living difficult, not the taxes. Salaries haven't reached average European levels but the prices have. It amazes me how a student can move from their parents' house in Spain, go to London and live away from home, and come back to Spain with savings in the amount of what they would've earned in Spain, not to mention great experiences. I do, however, agree with CascadaDuSel, it seems to require less money to live in Spain. There's less time to spend money with so much socializing (or working long hours and no large dwellings to fill up)!

Here some more questions.

Where would the highest cost of living be in Spain? Madrid? Barcelona?

What is the cheapest region of Spain to live in?

Thanks
Bill

Bill from NYC: I would like to know where the cheapest region is myself. Certainly it is nowhere along the Med. with Barcelona certainly being out of the running. Based on my last two trips over I would say Barcelona and Madrid are very closely matched as per the cost of living. I have been researching the cost of real estate on line and almost anything listed on the web is along the Med or Andulucia.

where we live in Almeria the cost of living is quite low, we dont pay for our water so no water bill! our taxes are low and the weather is great. We can still go out and have a glass of wine for a euro with a tapa and the houses prices arent to high yet! they have incresed but not to much, we bought a 3 bedroom house for €110,000 last year which isnt bad when you look at madrid and barcelona. I lived for a while in Girona and the cost of living there was very high.But you have to remember its harder to get a job down there then in a city like madrid and often the wages are less to.

Runzheimer; think spells that way give you a cost of living index for worldwide cities; I use to use when moved to Europe(France).

Weight this in with your negotiations and hopefully you can get a job offer close to the same standard of living or better (i have it better!!) I did ran a spreadsheet putting together from salaries, bonuses, 13th month pay (france) and all the expenses of running a house with 3 kids (i am a finance manager) the bottom line gave me better in Europe by much so I am having la vida loca in France. I have lived and visit Madrid and many parts of Spain; yes the salaries gross are smaller but the taxes are higher than USA ;the benefits are much better too in Spain. So it is as I say a matter of negotiating and a bit of luck as usual.

just as hard it is for Americans not to pay taxes:it is the same issue for Europeans having to pay exhorbitant medical care. Neither will undertand it:so move on and enjoy the local life as is.

Hmmm, for a salary in the 30K range, taxes shouldn't be 40-45%. That is for much higher salaries. Speaking for myself, I am earning about 42K and my taxes are about 30%

This is the table for 2005:

If your earnings are over (A), then you have to pay a fixed amount of (X), plus a percentage (B) of the difference of your total earnings minus (A). Your total earnings must be lowered by some legal reductions (2400 euros if you are not self-employed, all the money your payed to the National Social Security, certain amount if you have children or elder parents depending from you, etc.). Additionally, some reductions on the total taxes amount can be done, too (a certain % of the amounts payed for your home's mortgage, a % of the donations to registered foundations or NGOs, etc.)

So, you have to find the number immediately lower to your total, and do the maths with that row:

Hope it is more or less clear.

Torrales

People with a salary of 30K are they consider middle class in Spain?

Bill

Yes, I would say so. But, of course, it depends on how many people have to live with these 30K. I mean, if these 30K are for a single guy under-30 who lives with his parents is not the same as if the 30K have to feed a 4-children family. And, strictly speaking, some other factors must be considered when trying to "file" people into social classes, like their education degree. Probably an expert plumber earns more money than a just graduated teacher, but the social status of the latter tends to be higher considered than the former's.

It is difficult to establish a range. In the first example above, the guy can probably be considered medium-to-high level. If the same guy has to pay for his home, mortgage or rent, then the level downs to pure medium. But if the case is a couple, each of them earning 30K, the average is the same, but their status is higher.

Coming back to what I know best, my previously mentioned case, I consider myself a "6" in a scale 0-10, where 0 is a homeless and 10 is Zara's owner or Banco Santander's owner.

Bill from NYC,

What would you consider someone making 30k a year in the U.S., indigent? Certainly they'd be somewhere in the lower-tier of the middle-class, and admittedly, finding it hard to make ends meet, but still they'd be considered middle-class here. I know many who fall in this range managing.

In all my years working in the USA I never made it to $30,000/year and never had hopes of buying a house nor a nice car. I always considered myself to be "Upper Lowerclass" on the income scale. Like in Spain, just because you have a university degree does not mean you'll have a job which pays you a good salary.

In Spain, a single person earning 30,000 Euros per year is a small fortune. While that same person won't likely be able afford to buy a flat they'll likely have a decent apartment and will live a rather good life which would include some travel and eating out from time to time. If you're making 30,000 Euros AND supporting a wife and one or two children, well, it's very very difficult to live well.

But regarding the taxes, I say pay them and be happy. If you're a transient resident I can see why you'd be UNhappy paying these taxes. If you're a permanent resident you can see it from the perspective of improving the society as a whole - and YOU are participating in this directly. Of that you can be proud.

Saludos, MadridMan

MM: Let me assure you the if you were earning between $25 and 30K per year in Columbus, Ohio you could have purchased a house. It may not have been in an exclusive area, and may have needed a lot of work, but it would have been yours and you been building equity. I will not listend to the worn out excuse about not knowing how to do the work, your a smart man and can use a library for all of the "how to books" in the world. Ohio State has an engineering dept, and anyone of those proffs would have been available for consultation as would the students.

People have made fortunes starting with a lot less to work with than you. They read "how to" books and asked mucho questions. The man at the hardware store will be able to answer most of your questions. There are houses all over Ohio on E Bay as I write this that are selling for as little as $7000. Not to mention the repo market.

When you get back stateside and want to get a place send the Desert Dweller an E, and between the two of us we will figure something out. I'll make myself available for questions, just remember there is a way to adjust everything. That includes finances.

Thanks, desert dweller.

And good luck, Tim Hortons Man! Hope to hear of the developments of the job offer, the possible move to Madrid, and how it goes living on that salary. I think a lot of people would be interested in just how possible it is to do this for foreigners.

Torrales, what a useful tax table! Thanks a lot!!!!

Saludos, MadridMan

You're welcome MadridMan.

I copied it from the Help of the Individual Income Tax File Declaration Application (in Spanish, PADRE, acronym for Programa de Ayuda a la Declaracion de la REnta), so it comes straight from horse's mouth.

Torrales- great chart. I also like your analogy with the scale...It's amazing the disparity in wealth between 6-10 (not that anyone would complain about it). What's sad is few reach 6. I think your salary would be considered a 7 or an 8 on a scale of average salaries in Madrid, for example. What do you think?
Hey, DD, have an idea for you...since you are not interested in paying the high prices in Europe and I'm sure many of us would love our homes worked on...how about some exchange for housing! You probably could even get your flight paid for!!

Well, I really know my salary, not other's. So, it is a bit difficult to be accurate at positioning myself in the scale.

I said a 6 because I know it is over the average, but slightly over or at least that is my impression. There are many people whose real salaries are not in any payroll, so they can play financial engineering when taxes is the matter. I am referring to people whose business is selling services, not goods, whether they are self-employed or not, like plumbers, electricians, waiters and their tips, etc. The Spanish IRS know each and every cent I earn because it is listed in a payroll, the earnings of all those people are, say, fuzzy.

And that can explain in part, for instance, that despite my salary being over average, definitely my car is under average. I find amazing the number of high level cars (Mercedes, BMW, Audi) that are moving on Spanish streets. All those cars start from 30K on.

Man oh Man I miss the Spanish weather, went home for a wedding and it was cold wet and rainy! Awful weather only saving grace was it stopped long enough for the bride and groom to walk from the church to the reception hall.

Anyways

I surprise most people when I tell them I don't find the German tax system that onerous, if your married with dependants the total tax take is quite reasonable. What I like in particular is that the VAT is included in the price, I love the "price you see is the price you pay". I hate when I go back to Canada and have to pay the tax on top.

Germans are complaining right know because they are talking about raising the VAT from 16 to 19 percent, I don't think its a big deal. If I decide to buy an ipod I not going to quibble over a few more euros.

Anyways we won't know for a while as the boss is on holidays till end of the month. I'll post when I get more info.

I was also evaluating a job offer and I came across this IRPF (personal tax) calculator, unfortunately is only in spanish but it will tell you aproximately the net salary applying taxes and the fiscal reductions due to marital status and number of childrens, it's great for simulating it will deduct not only the taxes, but also social security and it will apply the effect of the "extra" pays (in most cases, net annual ammount will be paid in 14 checks, one every month and 2 extras for Summer and Christmas)

http://usuarios.lycos.es/ligeropaso/iframe.php?file=calculadora/calculadora.htm

this really helps out Nativo
thanks for the info: its always good to know for me at least:

regarding the cost of living, the biggest issue in Madrid is the cost of housing! I've been looking and its hard to find anything under a 1000 a month for a 2 bedroom apartment.

In doing my research I found that soft costs (heat hydro phone etc) are quite reasonable about half of Germany, transportation (metro etc) is dirt cheap. I haven't found out about things like insurance but I would expect they'd be cheaper as well.

Food is about the same.

I saw a thread on another board regarding the cost of living they quoted 15.000 euros a year outside of housing. That means with 12.000 a year rent you'd need in the hand 27.000 a year which means you'd need 2 incomes to live on.

here something for the discussion in general :of course, I do my own study anything and everything from gas to insurance to food to tv satellite subscriptions::::found out I am doing better in Europe than US.
Madrid is cheaper than many German cities see below.

2005
Rank City
1 Tokyo, Japan
2 Osaka, Japan
3 London, United Kingdom
4 Moscow, Russia
5 Seoul, South Korea
6 Geneva, Switzerland
7 Zurich, Switzerland
8 Copenhagen, Denmark
9 Hong Kong, Hong Kong
10 Oslo, Norway
11 Milan, Italy
12 Paris, France
13 New York City, United States
13 Dublin, Ireland
15 St. Petersburg, Russia
16 Vienna, Austria
17 Rome, Italy
18 Stockholm, Sweden
19 Beijing, China
20 Sydney, Australia
20 Helsinki, Finland
22 Douala, Cameroon
22 Istanbul, Turkey
24 Amsterdam, Netherlands
24 Budapest, Hungary
26 Abidjan, Côte d'Ivoire
27 Warsaw, Poland
28 Prague, Czech Republic
29 Taipei, Taiwan
30 Shanghai, China
31 Bratislava, Slovak Republic
32 Düsseldorf, Germany
33 Luxembourg, Luxembourg
34 Singapore, Singapore
34 Frankfurt, Germany
36 Dakar, Senegal
37 Munich, Germany
38 Berlin, Germany
39 Tel Aviv, Israel
40 Glasgow, United Kingdom
41 Athens, Greece
41 Brussels, Belgium
43 Barcelona, Spain
44 Los Angeles, United States
45 White Plains, United States
46 Madrid, Spain
47 Birmingham, United Kingdom
48 Zagreb, Croatia
49 Hamburg, Germany
50 Hanoi, Vietnam
50 San Francisco, United States
52 Chicago, United States
52 Beirut, Lebanon
54 Riga, Latvia
54 Kiev, Ukraine
56 Ho Chi Minh, Vietnam
57 Miami, United States
58 Algiers, Algeria
59 Casablanca, Morocco
60 Tallin, Estoni

Let's try to keep on the topic of "Taxes net vs gross", please. Thanks!

Saludos, MadridMan

excellent site for cost of living in the world!!!!

http://www.muskadia.com/pays_par_pays/cout_de_la_vie.asp

to me it all goes down to what i take home and how it cost locally versus where i am going. its all relevant info.

Nevado: Great idea, and thanks for the offer. I have been watching the net for Real Estate prices, and even for "fixers" they are more than I care to spend.

Yep, everbody has a plan to beat Ceaser out of his due. Governments bring this sort of thing on themselves, I just returned from two weeks in Ohio and Indiana. The prices of real estate were cheap compared to Arizona and certainly Spain. But, there was the taxman standing around with his hand out everytime you turned around. Here in the USA it would be to easy for the taxman to catch a "black money" deal like is being described in this thread.

The next question comes up, how does that seller think that he can walk away from a contract because the buyer refuses to be part of a tax fraud? That seems to be a case that any lawyer would love to gets his hands on. I cannot speak for Spanish contract law, but I know that under American contract law, the seller has sold a house wheather he likes the tax consequences or not. It seems to me that the buyer would be under no obligation to be part of a criminal act, and a judge in a court of law would tell the seller that in no uncertain terms.

DD- good point on the legality of it all but I think you posted in the wrong place...

Have you paid a deposit or signed anything? I Spain, if the seller opts out of a signed deal (or a pre-contract) they have to pay the potential buyer a sum of money.

DD, you're not alone in thinking things in the Midwest are not what they seem...property taxes are outrageous. Here in Europe I spend less on property taxes a year than for renting my parking space!

So how does the real estate tax is assessed in Spain? I think in some countries, like the U.S. or Mexico they do not care (for real estate tax purposes) how much you paid for the property. Actually, the contract may say you paid 1 dollar / peso, but the assessor’s office will make you pay property taxes based on the value they consider appropriate for your property. If you don't like it you have to fight it. Is not the same way in Spain?

As to Personal Income Tax I found this website with helpful information: http://www.strongabogados.com/taxes.php

It is exactly the way the 7% tax (impuesto sobre transmisiones patrimoniales) works in Spain. This tax has to be paid to the regional government (comunidad autonoma) and they have tables with the standard values of the properties depending on its size and age, and the street, the city, even the story it is located.

The issue is that, with real estate market prices rising 12-15% per year since about 1998, those tables are a little out of date. That is why a small cheat (10-15%) can be done more or less safely.

Nevado: You are right that was meant to be posted under the thread "dinero Negro" Hopefully MM will move it so that it will make more sence.

desert dweller, I can't move individual postings, only entire threads. Sometimes I'll copy/paste someone's mis-directed posting into a more appropriate thread. Would you please do it? If I do it it carries my name/information and I'd rather it be done from your username account. Thanks.

And let's please try to stay on the original topic of "Taxes net vs gross". Thanks.

Saludos, MadridMan

need advice

I'm Canadian but also hold UK citizenship. So I was wondering how does one go about applying for a job in Spain? I am thinking about early retirement in 2 years and maybe going over for a short term and maybe working in a non stressful job :-)
Appreciate any advice

Thanks

Ian

cactusjoe, you may want to conduct a SEARCH for information on this topic or start a new one. This thread, "Taxes net vs. gross" is a bit off-topic for your question. Thanks and good luck!

Saludos, MadridMan

Update on Taxes: Being doing a little more research and the news isn't as bad as I thought. When I first calculated the rates I didn't take into account Total Income vs Taxable Income. The former being your total earnings and income, the latter being the amount that is subject to tax AFTER deductions. Your personal exemption and Social Security taxes plus a few other things are deducted from your total income, at that point your tax liability is then calculated.

Redoing the numbers puts the tax burden similar to Germany.

I just found "the ultimate" net salary calculator page http://www.calculatusueldo.com/. In spanish and for explorer only I'm afraid. It does give you the calculations from different points of view, plus numbers are updated to 2006 fiscal regulations..

excellent website! I did find out and this is important that your wage is divided over 14 or 15 pays not 12 as expected. This means less each month but 3 to 4 times a year you get double pay cheques. Its like a forced savings, it can be really handy getting extra money just before holidays or Christmas.

great site Nativo
Out of curiosity; I compare my salary and it is 2000 Euros lower in Spain. However, I believe the standards are lower in Spain so I should come out better if get the same gross salary than in France. I believe....

Hello all,

A monthly net salary of 2,000 Euros (24,000 a year) in Spain can be considered as excellent if you are single, and fine if you have a wife and 1, 2 children.

In the US with the same money, let's say 2,400 USD a month with a wife and only one child and you would be struggling to survive.