Interesting. I'm wondering if that's true in reverse for people. Did you accept a 23% pay cut to work from home? For people who currently work in an office, would you accept that? It seems pretty steep--I don't think I could afford to do that.
> and the usual tax robbery..
You don't pay taxes working from home?
He's justifying the large monetary penalty for NOT working at home by mentioning that it takes in account income tax as well.
I've never been offered the chance (and sadly, I need the money).
For example, say you value your time at ~$50/hr, and the train costs $8/day, and there are 20 work days in a month. If your daily commute takes 2.5 hrs, that's $2660/month in value to you. If your marginal income tax rate is 28%, then to actually get that amount of additional spending money you'd need to make $2660/.72 = $3695/month. This would be a 30% raise if you currently make about 12k/month (144k/yr).
It's hard to justify assigning a dollar value to your time though, unless you'd otherwise be making that ~$50/hr. If I were not commuting for 4 hours per day, it's not like I'd be consulting for those hours, so there's no opportunity cost. Is the time I'd otherwise spend lying on the couch worth ~$50/hr? Hard to say.
Assign an hourly value to your free time. If you wanted to relax at home on a Saturday playing video games, how much money would I need to pay you to do something for me instead?
I'll work for no less than $20/hr. I'll give up my free time for no less than $100/hr.
My rates differ because, at least for me, I'm required to work to pay bills and pay to do things I enjoy doing with my free time. Since I'm required to do it and I need to be realistic with what I ask for, I charge less. My free time is time I'm not required to work - so there needs to be enough monetary incentive for me to be willing to give up my free time. Idealistically my "work rate" would match my "free time rate".
In an entire 7 day week, if I only had 1 hour of freetime, I would value it at $1000. My 100th hour I might only value at $5, as I would be getting bored.
So if you are busy with family and commitments.. working from home vs not may be the difference between 10h and 0h of freetime a week. Whereas for a single guy with no hobbies, it might only change the balance from 30h of freetime to 40h of freetime, which is a bit less.
Even with constant free time - my mood can affect the price. If I'm not in the mood to work, I'd charge more. Free time itself can adjust in value. Nothing happening this weekend? Normal rate. I planned to go to an expo? Looking at x10 the normal rate if they expect me to miss that. I have a date planned? They're looking at an all expenses paid two week vacation for my date and I if they expect to be able to buy that time from me.
Would I give up another hour with my family for $100? How often would that opportunity come along? If I had the opportunity to make $100/hr whenever I wanted, I'd first quit my job and fill up that time with this new $100/hr activity, before eating into my free time. But that's a lot of money--it would be very tempting to let it eat into my free time and I'd probably just apply it to as much time as possible in order to maximize the opportunity. That's probably true for any dollar value over what I currently make.
But reality is, whether or not I would give up an hour of free time for $100 is a pointless question to ask because I'm not aware of a way to convert free hours into $100 bills. If I had the opportunity to do such a thing, I'd simply be doing it instead of what I'm currently doing.
For some people it could be $5 because they need some money to buy some food to eat. For others it might be $30 to spend at the bar on Friday night. Others charge more - I know a contractor who won't settle for any less than $10,000 for 40 hours of their time (comes out to $250/hr). Some people value their time above all else, refusing any monetary incentive. You simply can't buy their time.
If you think $40/hr is worth your time, do it. If you think $2/hr is worth your time, do it. The value is yours to set - it can fluctuate and change. But learning to value your time is worthwhile. You only get so much of it, so be sure you're happy with how you're spending it.
[0] I've been told that's terrible future planning, because I may need more cash in the future. I prefer to live in the now and worry about possible futures when it becomes the now. There are just so many futures to worry about and plan for. What if I worked harder to store away more money just to die of a heart attack without ever being able to enjoy my life? To avoid stress and simplify my life I don't worry about possible futures.
Just curious, where all are you commuting between? I rarely hear people commuting over 2hrs round trip here on the West Coast, and a 2hr commute round trip can allow you to buy super far out in the gricklegrass, IE Tulalip, WA, where a couple acres with a house is ~170k, with a 5min drive to the park and ride and a 47min ride to Downtown Seattle. Living closer to the core, a similar house would be easily $500k, but it'd be a single seat, 20min bus ride, less if on the train.
I suspect there's no "occupational privilege tax" if you're working from home.
I live in the suburbs and work in the city and for the privilege of having a job, I have to pay the city money.
In fact, you do not even need to live in Rumenia to use this clause. All you need to do, is to set up a Rumenian company that invoices your employer and then pays you your salary, free of tax.
This is just one of the gazillion ways in which as a programmer, you can avoid paying even one dollar in income tax.
I have personally paid the equivalent of less than 12 months worth of income tax in a career of 25+ years.
Seriously, there is never a good reason to pay it. You can always circumvent any attempt at making you pay. That is pretty much always trivial.
Uh, generally speaking one is still liable to pay income tax on payments coming from a foreign company.
I'm preparing for a big move that will require me to work remotely or leave the company. Part of my bargaining chips is accepting up to a 50% pay cut, starting at a much lower % of course (10-20%~)
There's no reason I can't work remotely other than they dislike it. The team frequently works from home/remotely (eg: while "on vacation") and there is little in the way of processes that requires anyone to come in to the office. Nearly all communication happens over Slack and the occasional email chain.
I love the company I work for and don't want to leave them. But I also have my own dreams and ambitions in life and given a choice between the two I'll choose to follow my dreams.
In the US, you can cut out state taxes by moving to a state that doesn't levy income tax. It's a nice self-raise.
It is very easy to achieve that by moving out of the country. You see, in 75% of the globe they do not have a population registry with address registry with a functioning postal system to send you a tax return right to where you happen to live. A lot of these countries -- most actually -- have an income tax system on their books, but they cannot make it work, not even to save themselves from drowning. In those circumstances it is impossible for them to ask me about my income, which they then don't. I pay no income tax because nobody around me does, and if they did, I would just move elsewhere.
If you dedicate a portion of your home as a "home office" that you work out of, suddenly you can gain a lot of interesting deductions, based on the square footage of the home office.
It's not a lot (but every little bit counts), and it also depends on how much you work out of the home, but there's various deductions for electricity, internet costs, magazine and book purchases (relating to your work), and other items. So you could potentially lose this if you don't work from home (and if you don't claim the deductions, of course).
This may or may not be what they mean, though...