8 ms·

"They're not saving 25% on payroll taxes, benefits, workers comp, PTO, training time and management overhead. In fact, more people working fewer hours increases

by criley2 10y ago

"They're not saving 25% on payroll taxes, benefits, workers comp, PTO, training time and management overhead. In fact, more people working fewer hours increases most of these costs." * Payroll taxes: OF COURSE they're saving the same amount on taxes! It's not like they pre-pay taxes on an assumed amount. It's a % of what they pay you. If they pay you less, they pay less taxes on your behalf. * Workers Comp: Firms play insanely low rates on workers comp for programmers, and workers comp is generally calculated at (RATE for job class) * ($100 payroll allocated to job class). If you pay the employee less, your workers comp premium decreases at the same rate. * PTO: If the company wishes to offer full time PTO benefits to a part timer, they may, but many businesses have separate PTO policies for full and part time employees, including slower accrual for part timers. Training time and management overhead are probably the real costs here. > In fact, more people working fewer hours increases most of these costs. More people working fewer hours could also increase productivity (that's the point of this discussion) thus could increase revenue and profit, as well. If you pay 10% more and make 20% more revenue, that's a GOOD DEAL

dragonwriter 10y ago
> > They're not saving 25% on payroll taxes, benefits, workers comp, PTO, training time and management overhead. In fact, more people working fewer hours increases most of these costs." > Payroll taxes: OF COURSE they're saving the same amount on taxes! No, they aren't, in the US. > It's a % of what they pay you. Not a flat percentage; the social security portion of payroll tax has an income cap (the smaller Medicare portion does not), which is less than what most programmers make, so payroll taxes do not go down proportional to income for workers who are above the cap to start with.
- criley2 10y ago
  Are you being serious? The cap is $118,500, you think most programmers make more than $118,500 per year?
  - fennecfoxen 10y ago
    In California? I'd hope that a typical developer makes around that much.
  - aetherson 10y ago
    In the bay area, I'd expect median to be somewhat higher than that. Which is obviously not the entire world or country, but is where a lot of the focus of this forum is.
    - ryandrake 10y ago
      Let me Google that for you. In the Bay Area, the average salary for a software engineer is $103K [1] - $110K [2], so below the cap. 1: http://www.payscale.com/research/US/Job=Software_Engineer/Salary/a5e48575/San-Francisco-CA http://www.payscale.com/research/US/Job=Software_Engineer/Sa... 2: https://www.glassdoor.com/Salaries/san-francisco-software-engineer-salary-SRCH_IL.0,13_IM759_KO14,31.htm https://www.glassdoor.com/Salaries/san-francisco-software-en...
      - dragonwriter 10y ago
        The median salary for all "Computer and Mathematical Occupations" for San Jose-Sunnyvale-Santa Clara for 2015 was $128,850, for Software Developers the medians were $147,220 (Applications -- there were 42,650 of these) and $142,950 (Systems Software -- there were 27,260). Of the programming-related occupations, Computer Programmers and Web Developers were lower than the cap, but very small numbers of people (6,510 @ $93,940 and 2,930 @ $107,500, respectively.) From 2015 BLS data, which is more comprehensive and representative than whatever payscale and glassdoor are using. [0] San Francisco-Oakland-Hayward is a little lower, but both kinds of Software Developers still average over $120K. [1] [0] http://www.bls.gov/oes/current/oes_41940.htm#15-0000 http://www.bls.gov/oes/current/oes_41940.htm#15-0000 [1] http://www.bls.gov/oes/current/oes_41860.htm#15-0000 http://www.bls.gov/oes/current/oes_41860.htm#15-0000
      - TheCoelacanth 10y ago
        Those use self-reported data which is unreliable and only San Francisco, which is only a small portion of the Bay Area. Using BLS data, which should be more reliable, for the San Francisco[1] and San Jose[2] metro areas, the average weighted by number of people in the job of annual mean wages for the job categories of "Computer Programmer", "Software Developer, Applications", "Software Developer, Systems" and "Web Developer" is $129,730.54. [1] http://www.bls.gov/oes/current/oes_41860.htm#15-0000 http://www.bls.gov/oes/current/oes_41860.htm#15-0000 [2] http://www.bls.gov/oes/current/oes_41940.htm#15-0000 http://www.bls.gov/oes/current/oes_41940.htm#15-0000
- deleted 10y ago
  [deleted]
mdip 10y ago
You're correct but you're missing one large expense: Health/Wellness (at least, in the US, where it's partially paid for by one's employer). I'm assuming the OP was expecting to keep this benefit since it's a critical thing for most people. The company could choose to pay for less of a share (and most companies reduce or eliminate this benefit for part-timers) but assuming it's left alone, it would not be reduced any with a reduction in the cost of salary. You mentioned training time and management, but there's also "employee support costs" that increase by employee count regardless of salary such as HR and other support staff, state/local/federal compliance requirements that are based on the total number of people employed rather than salary (though many of these are limited to full-time staff) and others that I can't speak to since it's not my area of expertise, but his point is still valid in those areas. On PTO - you're right in that I haven't encountered an employee that doesn't reduce the total allotment of PTO for part-timers. But even if they didn't, this would go down precisely with salary since it's paid as a full day's work not worked and that day would now be 25% cheaper.
- Mithaldu 10y ago
  In a sane system the health insurance costs scale with wages. Do the US ones not do that?
  - maerF0x0 10y ago
    Why would that be a sane system? IMO a sane system is one where the paid cost scales with the real costs of the health care, no? Ones health care costs arent going to be cut in half if hours are cut in half. Still need just as many annual checkups, may still have the same diabetes etc.
    - Mithaldu 10y ago
      No, health care is implicitly a system of shared costs to benefit all of society by limiting the amount of ill people present as much as possible, thus increasing the health of everyone else by reducing contacts with ill people. In such a system, costs are of course taken on by every single participant according to their means. Read up on german health insurance for example.
tracker1 10y ago
Depending on the state, payroll taxes, workers comp, pto etc may or may not apply, or may be at a cap. If you're working 3 days a week, and that still meets the cap on worker's comp/unemployment, etc, then they're still paying the same amount. Many places will hit the max on a lot of employer-side taxes/benefits when you are working full time.
cwilkes 10y ago
Another facet of this is that with more people comes more communication needs. So either more management or things get dropped. So while it seems like a 25% drop in hours would only mean a 25% increase in number of employees that later number will go up much more just to handle the increase in communication.

by criley2 10y ago

dragonwriter 10y ago

> > They're not saving 25% on payroll taxes, benefits, workers comp, PTO, training time and management overhead. In fact, more people working fewer hours increases most of these costs." > Payroll taxes: OF COURSE they're saving the same amount on taxes! No, they aren't, in the US. > It's a % of what they pay you. Not a flat percentage; the social security portion of payroll tax has an income cap (the smaller Medicare portion does not), which is less than what most programmers make, so payroll taxes do not go down proportional to income for workers who are above the cap to start with.

criley2 10y ago
Are you being serious? The cap is $118,500, you think most programmers make more than $118,500 per year?
- fennecfoxen 10y ago
  In California? I'd hope that a typical developer makes around that much.
- aetherson 10y ago
  In the bay area, I'd expect median to be somewhat higher than that. Which is obviously not the entire world or country, but is where a lot of the focus of this forum is.
  - ryandrake 10y ago
    Let me Google that for you. In the Bay Area, the average salary for a software engineer is $103K [1] - $110K [2], so below the cap. 1: http://www.payscale.com/research/US/Job=Software_Engineer/Salary/a5e48575/San-Francisco-CA http://www.payscale.com/research/US/Job=Software_Engineer/Sa... 2: https://www.glassdoor.com/Salaries/san-francisco-software-engineer-salary-SRCH_IL.0,13_IM759_KO14,31.htm https://www.glassdoor.com/Salaries/san-francisco-software-en...
    - dragonwriter 10y ago
      The median salary for all "Computer and Mathematical Occupations" for San Jose-Sunnyvale-Santa Clara for 2015 was $128,850, for Software Developers the medians were $147,220 (Applications -- there were 42,650 of these) and $142,950 (Systems Software -- there were 27,260). Of the programming-related occupations, Computer Programmers and Web Developers were lower than the cap, but very small numbers of people (6,510 @ $93,940 and 2,930 @ $107,500, respectively.) From 2015 BLS data, which is more comprehensive and representative than whatever payscale and glassdoor are using. [0] San Francisco-Oakland-Hayward is a little lower, but both kinds of Software Developers still average over $120K. [1] [0] http://www.bls.gov/oes/current/oes_41940.htm#15-0000 http://www.bls.gov/oes/current/oes_41940.htm#15-0000 [1] http://www.bls.gov/oes/current/oes_41860.htm#15-0000 http://www.bls.gov/oes/current/oes_41860.htm#15-0000
    - TheCoelacanth 10y ago
      Those use self-reported data which is unreliable and only San Francisco, which is only a small portion of the Bay Area. Using BLS data, which should be more reliable, for the San Francisco[1] and San Jose[2] metro areas, the average weighted by number of people in the job of annual mean wages for the job categories of "Computer Programmer", "Software Developer, Applications", "Software Developer, Systems" and "Web Developer" is $129,730.54. [1] http://www.bls.gov/oes/current/oes_41860.htm#15-0000 http://www.bls.gov/oes/current/oes_41860.htm#15-0000 [2] http://www.bls.gov/oes/current/oes_41940.htm#15-0000 http://www.bls.gov/oes/current/oes_41940.htm#15-0000
deleted 10y ago
[deleted]

mdip 10y ago

You're correct but you're missing one large expense: Health/Wellness (at least, in the US, where it's partially paid for by one's employer). I'm assuming the OP was expecting to keep this benefit since it's a critical thing for most people. The company could choose to pay for less of a share (and most companies reduce or eliminate this benefit for part-timers) but assuming it's left alone, it would not be reduced any with a reduction in the cost of salary. You mentioned training time and management, but there's also "employee support costs" that increase by employee count regardless of salary such as HR and other support staff, state/local/federal compliance requirements that are based on the total number of people employed rather than salary (though many of these are limited to full-time staff) and others that I can't speak to since it's not my area of expertise, but his point is still valid in those areas. On PTO - you're right in that I haven't encountered an employee that doesn't reduce the total allotment of PTO for part-timers. But even if they didn't, this would go down precisely with salary since it's paid as a full day's work not worked and that day would now be 25% cheaper.

Mithaldu 10y ago
In a sane system the health insurance costs scale with wages. Do the US ones not do that?
- maerF0x0 10y ago
  Why would that be a sane system? IMO a sane system is one where the paid cost scales with the real costs of the health care, no? Ones health care costs arent going to be cut in half if hours are cut in half. Still need just as many annual checkups, may still have the same diabetes etc.
  - Mithaldu 10y ago
    No, health care is implicitly a system of shared costs to benefit all of society by limiting the amount of ill people present as much as possible, thus increasing the health of everyone else by reducing contacts with ill people. In such a system, costs are of course taken on by every single participant according to their means. Read up on german health insurance for example.

tracker1 10y ago

Depending on the state, payroll taxes, workers comp, pto etc may or may not apply, or may be at a cap. If you're working 3 days a week, and that still meets the cap on worker's comp/unemployment, etc, then they're still paying the same amount. Many places will hit the max on a lot of employer-side taxes/benefits when you are working full time.

cwilkes 10y ago

Another facet of this is that with more people comes more communication needs. So either more management or things get dropped. So while it seems like a 25% drop in hours would only mean a 25% increase in number of employees that later number will go up much more just to handle the increase in communication.