So, Frankfurt, Dublin, Paris, Madrid, or Amsterdam?

eFC logo

It's Article 50 day. To mark the occasion, Goldman Sachs has told staff there may be "some changes to its footprint." Morgan Stanley has sent a memo saying it's preparing for a worst case scenario in which it must establish a "significant entity" in the EU. And J.P. Morgan is reportedly scouring Europe for a potential new home after Brexit. 

In the event that your role is relocated by 2020 or beyond you may not have much say in where you end up. But you should at least know what you're aspiring to. While banks make their own calculations, this is what the European alternatives look like from the perspective of the banker on the street.

1. Pay is highest for front office staff in Frankfurt

If you're interested in your top line, you'll probably want to relocate to Frankfurt. Figures released last year by pay benchmarking company Emolument show Paris-based analysts in investment banks earning 10% more than comparable analysts in Frankfurt. Emolument didn't release similar figures for other European cities. However, figures from recruitment firm Robert Walters suggest even third year analysts are paid salaries of just €50k in Madrid - 24% less than in Frankfurt, while figures from recruitment firm Morgan McKinley suggest analyst salaries in Dublin vary from around €45k-€60k.

2. Pay also looks highest for risk staff in Frankfurt

Robert Walters' sometimes erratic figures also suggest that Frankfurt risk professionals earn the most. Although Robert Walters' salary survey isn't entirely comparable across job title and experience level, it looks a lot like Frankfurt risk professionals are the highest paid, as per the chart below.

3. But income tax rates look most favourable in Dublin and Luxembourg

If Frankfurt wins on gross pay, it looks less appealing when it comes to net pay. As the table below shows, Frankfurt levies income tax of 42% on incomes above €54k (£47k). However, this is only half the story. German workers are also expected to make generous payments to the country's social security system. For high earners these can amount to another 20% of gross income.

Paris's halving of the tax burden for expats under its "inpatriates regime" for the first eight years of employment in the country makes the French capital look more appealing. Overall, though Dublin offers the best long term prospects for paying less tax. Luxembourg is also appealing, although complicated: at lower levels the Duchy operates a highly progressive income tax system which rises in increments of 100 basis points as incomes increase from €11k to €46k, Once the €46k threshold has been met and the 39% marginal rate triggered there are few further increases - even Luxembourg incomes in excess of €200k are taxed at a marginal rate of 42%. Lux therefore makes sense if you're planning to be a high earner.

4. If you're looking for long holidays, you want to relocate to Paris or Luxembourg

If time off is your priority, you should (predictably) be aiming for Paris. As the chart below, based on figures from the World Bank, shows workers in Paris get an average of 41 days off per year. Unexpectedly, the World Bank suggests employees in the UK are also treated generously in terms of holidays with 28 days' paid leave per year.  Banks are generally at least three days less generous.

5. If you want a job you won't get fired from, try Paris and avoid Dublin

Paris is also best for job security. The maximum probationary period in Paris is just two months - after which you benefit from all the protections that French labour law has to offer. In Germany it's six months, although there have been suggestions that the country will relax its labour protections for anyone earning over  €100k or €150k.

6. If you want a job you'll never leave try Luxembourg

If you're looking for a job that's easy-come-easy-go, Madrid is probably the place. The World Bank puts the average notice period in Spain at just three months. In Luxembourg it's nearly a year and a half. These figures aren't specific to banking, however.

7. But if you want a job that'll pay handsomely when you're laid off try Madrid 

The World Bank also suggests that severance pay is huge in Spain. It's not bad in Germany (although this may be tempered by the €100k rule). Strangely, severance pay is not especially high in France - although this may be tempered by the fact that you're less likely to be laid off in Paris in the first place because of all the bureaucracy associated with the process. 

However, you may want to avoid Madrid if you're a senior banker without a young family to support. A study by Harvard Business School found that European countries with a "Latin culture" tend to select older workers when making layoffs so that they can create more employment opportunities for younger workers. By comparison, the study found that Anglo Saxon countries tend to fire the least productive. And that Germanic countries tend to fire young productive employees on the apparent assumption that they'll find new jobs elsewhere.

Contact: sbutcher@efinancialcareers.com

Related articles

Popular job sectors

Loading...

Search jobs

Search articles

Close