Hi everyone,

I am confused about post MBA salaries. Many schools provide employment reports and salary statistics. But are those salaries net salaries? i.e. after taxation?

For example, for Germany as to my knowledge, MBA graduation salaries are about 60-70K Euro. If this is a net salary, then it is not bad. But if taxes will be applied, it is not good at all. Again, as to my knowledge, there is about %40 of tax for a single male without children in Germany. So our example salary becomes 60*0.6=36K Euros/year and this does not worth to get an MBA right? I had similar offers for the last 6 months for engineering positions in Germany without an MBA.

I've asked the schools but I got ambiguous answers.

Same question for the UK. Are salaries implied in statistics net salaries or taxes will be applied?

Thanks.

The data will most likely be gross salaries, because taxation rates will vary substantially by location.

Probably the best approach is to use a system that compares the salaries relative to each other - like rankings. Rankings are also good to use because they provide relatively objective oversight, whereas when you are getting the data directly from schools, they have every reason to make it look better than it really is.

The key thing to understand is that you will probably never be able to get accurate post-MBA salary data, so use these stats only as one factor in your MBA decision. For example, even the rankings use questionable use questionable measures to calculate these data - just do some research on "purchasing power parity rates" and you'll see what I mean.

Again, as to my knowledge, there is about %40 of tax for a single male without children in Germany. So our example salary becomes 60*0.6=36K Euros/year and this does not worth to get an MBA right?

Therefore, your average tax will be much lower (something like 25 % or so).
thus you average tax will be much lower

I've talked to a few recruiters from Germany and about %40 was what they said.

By the way I'm talking about a Non-EU citizen, probably that affects the taxation.

"The rate of income tax in Germany ranges from 0% to 45%. The German income tax is a progressive tax, which means that the average tax rate (i.e., the ratio of tax and taxable income) increases monotonically with increasing taxable income."

http://en.wikipedia.org/wiki/Taxation_in_Germany

As I said: If you earn 50.000 to 100.000 ?, you pay 25 to 35 per cent on average:


http://en.wikipedia.org/wiki/File:Income_Tax_Germany_2010.png

Thanks for the answers.

Isn't there a difference between income tax and wage tax in Germany?

See this link: http://www.parmentier.de/steuer/steuer.htm?wagetax.htm

If your only income is your salary, the "wage tax" is your income tax.

I entered a gross income of 70,000?/p.a. in that calculator and got the following result:

total wage per year: 70.000,00 EuroSum of the Taxes 18.678,77 Euro

Of course, you will also need to deduct the costs for social security:

9.8% Obligatory Pension Scheme: 6.585,60 Euro
1.5% Unemployment Insurance: 1.008,00 Euro
8.2% Health Insurance (incl. 0.9 % from the Employee alown): 3.763,80 Euro
1.225% Disability Insurance: 562,28 Euro
Sum of the Social Security Contributions 11.919,68 Euro

As we are talking about the post-mba salaries, it is very likely that the only income will be just salary, unless you are an entrepreneur starting your own company, which is less likely in a foreign country, right?

So at the end, with wage tax in Germany, we get a net salary of approx. ?40.000 for a single-no children employee, from ?70.000 gross and this is worse than what I've indicated in my first post. Am I wrong Alain?

Honestly I d pay much more attention on % salary increases.
Within an MBA there are also people with few experience that might get a under the average salary (if you look to INSEAD and LBS stats you ll noticed that minimun salaries are quite low). More, it depends if you are looking for a career change or not
That said a 70000 gross income in Germany is not bad at all! Living costs there are not high and remember that by paying taxes you ll have services!

Yeah.
I am also looking for a career change and % increase.
I am an engineer in Germany and historically, engineers earn a lot of money in Germany.
If you get 70.000 ? / year as a starting salary, then this is really good. Afterwards your salary will increase every year.
My target after graduation is 90.000?

Thanks for the answers guys.

But let's just not miss the main point. I want to live and work in Germany for a while, I think it's a very nice place for that. I've already completed an A1 level German course and got my Goethe-Zertifikat A1.

I believe ?70K gross/year is not a bad salary for a fresh start in Germany. But, after spending a year and about ?40K for an MBA in Germany, ?70K is not very good. Because it becomes approx. ?39.500/year after taxes.

Approx. ?70K is equal to £58.400 and $93.100.
According to this site: http://www.thesalarycalculator.co.uk/salary.php
£58.400 gross salary/year equals to £40.639 net
$93.100 gross salary/year equals to $70.972 net
(I am well aware of taxation differs according to location and state, but let's use this for approximate numbers. All for a single employee with no kids)

So for same ?70K salary gross/year, you actually earn:
?48.700 in UK
?53.300 in USA
and ?39.600 in Germany (?45K if you are married!)

As we are engineers, I mean quantitative people we are, let's look at the numbers and then talk!
It is crystal clear that Germany is not so catchy for a single MBA graduate, at least on salary basis.
Since i want to work in Germany, I'd be more than happy if you disprove my argument!