The unseen taxes on post-docs

It is tax season in most countries. As most law abiding citizens post-docs pay taxes on their wages. However, there are many unseen taxes in a post-docs life. Most of them go undocumented.

Academics on soft money generally earn less than employees with a similar workload in industry. In the first 15 years after a PhD, post-docs, earn $239,970 less than their peers in industry. This lower pay is further exacerbated by job insecurity, through short term contracts. Most post-doc positions run between 1-3 years, with the occasional longer term (5 year) appointments. Lower pay and job insecurity are often a conscious trade-off for post-docs. Yet, the undocumented taxes that comes with the job often come by surprise. Here I list a few of the undocumented and unquantified taxes I encountered which rarely included in the wage discrepancy statistics referenced above.

The Mobility tax

It is almost a given these days that for a post-doc position you will need to relocate. Sadly, few institutions provide a moving allowance for post-docs. Depending on where you move this can be a substantial amount of money you will need to set aside for this (easily $3000 or more). In addition, visits to family and friends often requires traveling by plane. Although flights these days are cheap this can still add up to a substantial amount. During my time in the US flying back home would roughly cost me $4000/year or more.

The Administration tax

Few people are fond of tax season. However, for many post-docs, providing the short duration of most contracts, have to juggle taxes for multiple countries, employers. In the US this is further complicated as health insurance is tied to your employer. This accounting task can take up substantial time, time which isn’t reimbursed in any way. Although international offices often offer support during tax season, it will obviously not provide this service for wages earned in other countries or institutes. If things get too complicated you might be forced to consult an (international) tax accountant. These services do not run cheap (easily >$100/h).

The Health tax

Most academic institutes provide health coverage for post-doc positions (although not guaranteed). But do not be fooled, even with coverage you do pay extra if not monetary, with your health. Mobility often makes it difficult to get reimbursed after leaving the country and legal disputes regarding medical bills are all but impossible.

Short term (international) contracts often result in the fact that no meaningful relationship with a family doctor can be established. The lack of familiar setting is a hurdle when looking for medical advice, especially concerning mental health issues. Furthermore, it often leaves you with a fragmented medical history which negatively influences diagnosis.

Finally, given the short term nature of most contracts it is hard to convince institutes and PIs to invest in policies which only pay of in the long term. For example, simple interventions such as ergonomic office chairs, standing desks which have huge short and long term benefits are often overlooked. These requests are often ignored as post-docs aren’t around long enough to benefit from it (at this location) or fight for it.

The Exchange Rate tax

Although most post-docs are not motivated by money, it might be prudent to consider the exchange rate between where you earn your wages and where you hope to end up. For example, the exchange rate of the dollar to the euro varied up to 20% percent points over the last 5 years. In short, when moving between countries you lose a substantial amount of earning potential on your savings not necessarily offset by higher wages in the country of origin. Obviously, if you are lucky this might also works in your favour.

The Career tax

It is often cited that scientists who worked abroad have a broader network and more international collaborators, and higher impact work. However, this mobility comes at a price. What you gain in international contacts you often lose in terms of local (political) influence. Leaving a country means you leave the local watercooler talk and employability that comes with it. Although science pretends to be unbiased, supposedly hiring the best candidate, it often hires the most available one (known quantity). If you are not at the watercooler, you are not a known quantity nor available. Unless you return within a short time frame (1-2 years) consider your chances of being employed or appointed a permanent position to diminish.

Compounding factors

All these taxes are compounded by additional factors and multiply their severity (cost). I’ve written this from my personal perspective, but I can imagine that having a family, being disabled or suffering from a (chronic) illness will increase the Administration tax and all others substantially. As a cis-gender white male I’m not going to write extensively about this, due to a lack of personal experience. However, looking at the racial/gender dynamics in the US I often wondered how people manage their anxiety with respect to these issues. So there is a serious Racial / Gender tax as well.

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