American tech salaries look enormous on paper. A senior software engineer in San Francisco earns $180,000–$250,000 in base salary alone, while their counterpart in Berlin earns EUR 70,000–90,000 (roughly $75,000–$97,000). But raw salary comparisons tell an incomplete story. When you factor in taxes, healthcare, retirement, cost of living, and quality of life, the gap narrows—sometimes dramatically.

Here is how the two sides actually compare in 2026.

Gross Salary: The US Wins Clearly

There is no getting around it. US tech companies pay significantly more in gross compensation, especially at senior levels and at large public companies where equity is a major component.

Typical senior software engineer base salaries by city:

  • San Francisco: $190,000–$250,000
  • New York: $180,000–$240,000
  • Seattle: $175,000–$230,000
  • London: GBP 75,000–110,000 (~$95,000–$140,000)
  • Berlin: EUR 70,000–95,000 (~$75,000–$102,000)
  • Amsterdam: EUR 75,000–100,000 (~$81,000–$108,000)
  • Paris: EUR 65,000–90,000 (~$70,000–$97,000)
  • Zurich: CHF 130,000–170,000 (~$145,000–$190,000)

The US advantage ranges from 40% to over 100% depending on city and role. Zurich is the notable European exception, with salaries that rival or exceed many US cities—though Swiss cost of living is among the highest in the world.

Taxes: Europe Takes a Bigger Bite

Tax rates vary enormously within both the US and Europe, but on average, European tech workers lose a larger share of gross income to taxation.

Approximate effective tax rates for a senior engineer earning the local equivalent of $150,000:

| Location | Effective Rate (income + social) | |---|---| | Austin, TX | ~24% | | Seattle, WA | ~25% | | San Francisco, CA | ~33% | | New York, NY | ~35% | | London, UK | ~33% | | Amsterdam, NL | ~40% | | Berlin, DE | ~42% | | Paris, FR | ~45% | | Munich, DE | ~42% | | Zurich, CH | ~22% |

European rates include mandatory social contributions (pension, unemployment insurance, health insurance) that are largely hidden from the headline tax rate but reduce take-home pay. In the US, you pay less tax but must fund your own retirement (401k), health insurance (partially employer-covered), and other benefits out of pocket.

Healthcare: The Hidden Equalizer

This is where European workers recoup a significant chunk of the salary gap. In most European countries, comprehensive healthcare is included in those higher tax rates. In the US, even with employer-sponsored insurance, the average tech worker spends $3,000–$7,000 per year on premiums, deductibles, and out-of-pocket costs for a family plan.

Beyond direct costs, European systems eliminate medical bankruptcy risk entirely—a non-trivial financial consideration. An unexpected surgery in the US can cost $50,000+ even with insurance. In Germany, France, or the Netherlands, it costs close to zero.

Housing: Expensive Everywhere, But Differently

Housing costs vary more within the US and within Europe than they do between the two continents. San Francisco and New York rival or exceed London and Zurich. But mid-tier US tech hubs like Austin and Chicago are considerably cheaper than most western European capitals.

Average monthly rent for a one-bedroom apartment in the city center (2025–2026 data):

  • San Francisco: $3,200
  • New York: $3,500
  • London: GBP 2,100 (~$2,650)
  • Zurich: CHF 2,400 (~$2,700)
  • Amsterdam: EUR 1,800 (~$1,950)
  • Berlin: EUR 1,300 (~$1,400)
  • Paris: EUR 1,500 (~$1,620)
  • Austin: $1,500
  • Chicago: $1,800

Retirement and Social Safety Net

European employers contribute heavily to state pension systems. In Germany, employer and employee each contribute about 9.3% of gross salary. In the Netherlands, pension contributions can reach 15–20% of salary (shared). These are mandatory and provide a meaningful retirement income.

In the US, the standard 401(k) match is 3–6% of salary. The rest is up to you. A disciplined US tech worker who maxes out their 401(k) and invests the savings from lower taxes can build substantial retirement wealth—but it requires active management that European pension systems handle automatically.

Quality of Life Factors That Affect Real Wealth

Several non-salary factors materially impact financial wellbeing:

  • Vacation: European workers get 25–30 paid days off by law. US tech companies typically offer 15–20, though unlimited PTO policies (where people often take fewer days) are common.
  • Parental leave: Europe mandates 3–14 months of paid leave. US federal law guarantees zero paid leave, though major tech companies offer 12–20 weeks.
  • Work hours: European tech workers average 38–40 hours per week with strong cultural norms against overtime. US tech workers average 42–50 hours.
  • Education costs: If you have children, European university tuition is free or nearly free in most countries. US university costs can exceed $200,000 for a four-year degree.

The Verdict: It Depends on Your Stage and Priorities

For maximizing raw wealth accumulation in your 20s and 30s, the US wins—especially in high-paying cities with no state income tax. The salary premium is large enough to overcome higher healthcare and housing costs, and the lower tax rates compound over time.

For overall quality of life, financial security, and work-life balance, Europe offers a compelling package. The salary is lower, but the safety net is stronger, the working hours are shorter, and many of the expenses Americans worry about (healthcare, education, retirement) are handled by the system.

And then there is Zurich, which combines European quality of life with near-US salary levels—if you can handle the cost of living.

Compare your salary across US and European cities using our salary comparison tools to see where your skills are valued most.