Ask HN: What's an appropriate compensation counter offer in London 2024?

Hacker News Discussion ↗

Salary Negotiation Strategy

  • Focus on BATNA (best alternative to a negotiated agreement): know what you’d realistically do if talks fail, and what you could get elsewhere.
  • BATNA is not bluffing about other offers; it’s about your own clarity and willingness to walk away.
  • Several suggest framing negotiations as collaborative and multidimensional (salary, title, equity, career path, flexibility, leave) rather than a single tug-of-war over base pay.
  • Personal expenses and side income are seen as irrelevant to employers; value should be argued via market rates and replaceability, not personal needs.
  • Some propose learning formal negotiation frameworks and reading dedicated books.

Salary Levels, Market Data, and Location

  • Multiple commenters state senior IC roles in UK tech often start around £85–100k+, with “Head of …” roles materially higher, especially in London.
  • Manchester is seen as a lower-paying market than London, but £85k for a senior in Manchester is described as decent.
  • Salary sites (Glassdoor, levels.fyi, etc.) are widely viewed as underreporting real pay, for reasons like biased samples, stale data, and employer incentives.

Tax Bands, Pensions, and Salary Sacrifice

  • The £100k–£125,140 “62% effective tax” band is explained as loss of the personal allowance plus NI, not a literal marginal tax drop afterwards.
  • Many argue it’s not a “trap”: you still end up with more net income at higher salaries; progression matters more over time.
  • Common strategy: use pension contributions and salary sacrifice (including cars) to stay below specific thresholds and reduce effective tax, with some caveats on mortgage affordability and employer policies.
  • Over £100k also affects childcare benefits; this makes either staying clearly below or clearly above the band more attractive.

Equity and Stock Options

  • Strong skepticism about counting equity as reliable compensation; many treat it as a lottery ticket.
  • 0.2% for a very early, pivotal hire is described by several as low compared with common startup norms; suggestions range closer to 0.5–2% for first employees in tech, though exact numbers vary.
  • Multiple warnings about “equity” that is discretionary, revocable when you leave, or hard to exercise/sell; such setups are often valued at ~0 by commenters.
  • Horror stories include employees unable to afford exercising options, blocked from secondary sales, or fired before liquidity events.
  • Advice: push for actual, non-revocable share ownership; ensure clear vesting, treatment on exit/termination, and realistic exit strategy before trading salary for equity.

Management vs Individual Contributor

  • Repeated reminders that moving into “Head of” or management roles changes the work: more meetings, people issues, less deep coding time.
  • Some report higher pay but much higher stress and ultimately regret, later taking pay cuts to return to hands-on engineering.
  • Others note management can be ideal for those with strong soft skills and weaker interest in deep technical work.
  • Career value of the title itself is discussed: a “Head of” role may unlock future higher-comp opportunities even if current pay is below market.

Side Income, Leave, and Non-Cash Compensation

  • Several advise never mentioning side gigs in negotiation, as contracts often restrict outside work and it can only hurt leverage.
  • UK allows small side income tax-free (trading allowance), but details beyond that are not deeply explored.
  • Time off is highlighted as an important negotiation lever: extra vacation days, reduced hours, or flexible schedules can be very valuable, especially with young children.
  • “Unlimited vacation” is viewed skeptically: can favor employers unless there’s a strong pro-holiday culture and/or guaranteed minimum stated in contracts.

Consultants vs Employees

  • One view: use contractor day rates as a benchmark to back into a fair salary, then adjust for risk/benefits.
  • Counter-argument: consultancy and employment are distinct markets; companies pay higher daily rates for flexibility, speed, and reduced long-term commitments, so contractor rates are a poor direct anchor for employee pay.
  • Debate centers on whether using contractor rates is a powerful negotiation tactic or an inapplicable comparison.

General Perspectives

  • Several urge getting real competing offers to calibrate market value rather than speculating.
  • There’s disagreement on whether current compensation counts as “doing well,” with some stressing UK cost of living and others comparing to very high global tech comp.
  • Multiple comments reiterate: don’t over-optimise around tax bands or hypothetical exits; prioritise sustainable cash compensation, realistic upside, and long-term career growth.