Today a session was organised to give the students insights about laws relating to taxes, immigration and employment. It’s true! The highest tax bracket in Belgium is 55%! Based on the current tax structures, I crunched few numbers to find a regression between Salary levels in Bangalore and Belgium which will lead to same net savings. I could be way off target here… :)
If X is the salary in Belgium and Y is the EUR equivalent of Indian Salary, the regression I end up with is Y = 0.6017X – 26,962.00. Basically means the salary in India will yield the same net savings as the salary in Belgium even if the Indian salary is 26962 Euros less than 60% of the salary in Belgium. For example, A 78000 Euro salary in Belgium will result in net saving of 5000 Euro per annum, which is the same net saving for a salary of 20000 Euros (78000*0.6016 – 26,962) in India. Note: Utility of 5000 Euros in India is exponentially higher than in Belgium.
Monthly expense in Belgium -> 2000 Euros + 5% of gross salary every month
Monthly expense in Bangalore -> 500 Euros (equivalent) + 5% of gross salary every month
Exchange rate: 1 Euro = 60 Rupees
12 % – 13 % social security contribution each month