Pre-tax profit rose from £226 million to £276 million as Google took a larger share of Britain’s online advertising.
The Silicon Valley group paid £578 million in wages to its UK workforce and £509 million in share-based bonuses. The payout equates to £212,000 for each of the subsidiary’s 5,124 staff.
How very cool.
Google staff take home £200k each
Now shoot the headline writer. For there is this thing called income tax.
Not just the headline writer:
“Google paid its average UK worker more than £200,000 last year and incurred a £55 million corporation tax bill.”
Perhaps on average each worker earned more than £200k, but I doubt the average worker does – more likely to be a distribution of 8 people earning 100k, a manager earning 300k and an exec earning 900k (if not more extreme).
A few years ago I had a conversation with a socialist (self described who was decrying companies evading (her word) paying tax by giving bonuses to employees.
I pointed out that tax was paid by the employee. Then that top rate income tax was higher than corporation tax.
She looked like a dog shown a card trick…
@Stephen Crook
Not just your Socialist. I’ve seen that in newspapers “XYZ company reduced its taxable profits by paying bonuses to staff”
It’s clear tax evasion. Like a fish and chip shop buying fish and potatoes to reduce their profits.
A handy comparison
Company profits £100,000 = Corporation Tax of £19,000.
Use that £100,000 to pay a high earning (£150k+) boss and you’ll get:
Employers NIC – £12,126
Employee NIC – 1,757
Income tax – £39,543
Total – £53,426 less the CT they don’t get of £19,000 means the exchequer is £34,426 better off.
That’s piss-poor tax evading.
But you can be damn sure that the myth will keep repeating.
It’s not that socialists know nothing, it’s that they know so much that isn’t true.
In other words, the income tax from google employees paid for about 45,000 NHS nurses.
oops, I might have done an Abbot here
Presumably that’s the fair value of share option grants. That isn’t what the employee ‘takes home’: they only take home anything at all if they exercise and sell. That amount could be more or less than the fair value measured at grant date.
Not options at Google. Stock awards. Yes, not that huge a difference. But still different. The stock awards vest over time rather than have an exercise date like an option.
A handy online calculator says that on £212,000 you’ll be paying £88,000 income tax and national insurance, and taking home £124,000.
“The payout equates to £212,000 for each of the subsidiary’s 5,124 staff.”
So, is that on top of their wages? Dammit, I’m going to have to get a pencil… 212 x 5124, 10…something. 500something + 500something = 10something, looks right, so that’s £212 grand total, wages+bonus. No pencil needed. 🙂
“It’s not that socialists know nothing, it’s that they know so much that isn’t true.”
Another problem is that so many of them are moronic, mendacious, and malevolent.
Ah, then it’s the same difference indeed. The value to the employee will be the price of the shares on the day they vest, which will be different to the fair value recognised by the company in its accounts.