9 ms·

Salaries never stay secrets forever. Hiding them only delays the inevitable. Last year we were having a discussion at lunch. Coworker was building a new house,

• wging 16y ago
  $175/hour * 40 hours/week * 50 weeks/year = $350,000/year, for anyone else (like me) who can't immediately estimate equivalent yearly rates.
  • slashcom 16y ago
    $x/hour * 40 hr/wk * 50 wk/yr = 2n1000 The general rule is always "times 2, add 3 zeros" to do it in your head.
    • jurjenh 16y ago
      That would never work. You'd find some garbage in the output, or even worse, get a core dump due to n being undefined. I think you mean 2x * 1000. .... or I've been refactoring my code for too long. But yes, this is generally the rule I use as well, take the hourly rate and double it and add a K (eg $30/hr = $60K) Doesn't include holidays, sick leave or efficiency trade-offs (billable time vs maintenance, research). Personally I use an estimate of about 75% efficiency to get a realistic answer, so then your formula becomes 3/4 * x * 1000 So at $175/hr I'd expect something like 130,000 annually. Given that its said he's quite frugal and doesn't mind hard work, it could well end up being around the 250-300K, but I'd expect he'd end up burning out after a year or 3.
      • rapind 16y ago
        For 75% efficiency I assume you mean 3/4 * 2 * $175 * 1000 = $262,500 / year. 3/4 on it's own is less than %40 efficiency. I.e. Taking half the year off. You also just stated the same thing slashcom did while meaning to correct him?
        • jurjenh 16y ago
          yes, quite right... maybe I should go and lie down somewhere... But hey, at 75% efficiency at a half year's work at that rate I could probably afford it...
          • rapind 16y ago
            quite true ;)
  • techiferous 16y ago
    But remember that there is non-billable work (accounting, etc.) and a 15.3% self-employment tax. And also remember that there are probably not 50 weeks of 40 hours/week at this company but rather short-term or part-time work. And you are paying for your own benefits. I've found a good (albeit a bit conservative) rule-of-thumb is to convert the hourly wage into the yearly salary. Working as a consultant for $175/hour is similar to being employed at $175K/year. EDIT: The U.S. federal self-employment tax for 2011 is 13.3% (15.3% was for 2010).
    • ratsbane 16y ago
      A minor correction: it's not as bad as 15.3%. The self-employment tax is really just the company share of FICA withholding (6.2%) plus Medicare withholding (1.45%) If you're an employee you pay 6.2%+1.45%=7.65% and your employer pays the same. If someone else (employer) is not paying the 7.65% then you do. However, for 2011 the FICA rate for employees is 4.2% instead of 6.2%, so the self-employment tax remains effectively 7.65%. But that's only for the first $106,800 in earnings - everything above that is not subject to FICA and Medicare for employer and employee.
      • ryanwaggoner 16y ago
        Another (even more) minor correction: there's no limit on the Medicare tax, currently 1.45%.
      • nopassrecover 16y ago
        As "bad" as 15%? Tax is at least 38% here in Au for that wage (was 60% not so long ago).
        • jackowayed 16y ago
          Well, it's 15% for FICA (employee + employer), but there's also normal income tax, which starts at 10% and gets up to 35%. And then the state and, depending on where you live, the city have income and/or payroll tax as well (usually in the single digits).
        • 16y ago
  • deleted 16y ago
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  • schintan 16y ago
    Much shorter, just double the hourly rate for yearly salary in K's.
  • rmc 16y ago
    Eeek, only 2 weeks holidays per year? :(
  • JabavuAdams 16y ago
    Yearly revenue = hourly rate * 2 (in thousands) $40/hr => 80k/y $120/hr => 240k/y
• billpaetzke 16y ago
  and his bonus nearly matched the new guy's salary, which was an insulting $60K Is it common to get ~$60k yearly bonus as a programmer? Was this for a finance-industry job? All I've seen (either myself or others) so far is a few hundred dollars to a few thousand.
  • pkteison 16y ago
    Large firms will do 'bonus targets' as some % of your base salary. Goals are established based on measurable metrics that you probably won't feel like you can directly do much about, such as average revenue per customer. If the company hits the goals, bonuses pay at some multiple of target. E.g., 10% bonus target, it's a good year so bonuses pay double = you get 20% of your base as a bonus. Managers will be given both a higher base salary and a higher bonus target. Small firms are all over the map, from nothing to "finance industry". Glassdoor suggests that no, this amount is not normal. But I wouldn't be at all surprised to see ~$10k be normal from a ~10-15% target. And it is certainly possible at a big company that does this sort of thing to get classified as a manager and have a 15% target payout double on a good year for 30% of base = a free car.
  • danssig 16y ago
    Avoid bonus systems. Bonus systems do not work out well for non-executives. Look at the story again: the kid made out better than anyone because his $175/hr is his for as many hours as he works no matter how the company performs that year. He gets his "bonus" every hour he works. The senior dev has a whopping 30% of his yearly comp tied up in a nebulous bonus that probably gets paid out far enough into the next year that he's already earned about half of his next bonus by the time he actually gets it (i.e. makes leaving expensive). The bonus system was originally set up for high up executives to tie their comp more exactly to company performance since they are responsible for it. As a dev you are not responsible for company performance. Are you able to sack the sales team if you feel that they're not competent? Are you able to change company direction? You can't be responsible for something you have no ability to change. People saying you do are just manipulating you to their own advantage.
    • 16y ago
• brooksbp 16y ago
  Can someone please shed some light on what would be a good strategy to follow if you were in his position talking to HR, manager, CTO? What's the best way to save yourself once you've realized you're worth nearly double, triple, or quad your current comp pkg?
  • ajg1977 16y ago
    Honestly, the best way to obtain your newly-discovered market worth is to leave and find another job. In almost every job your only chance of negotiating a competitive salary is before you start. Sure, you can talk to HR and your manager and perhaps see some form of bump in salary, but if you're significantly underpaid then a) it's likely other people are too and they won't want to rock the boat, b) there's a decent chance you wouldn't leave anyway, and c) even if you do chances are they can fill your position for what they're paying you now.
    • rapind 16y ago
      Agreed. Not only that, but the less people pay for your services, the less they respect those services (it doesn't feel as earned as the next guy billing twice as much). So you pretty much have to jump. Which is likely anyways since if you were being paid less than half than everyone else around you and doing the same or better work, you'd probably be more than a little annoyed.
    • praptak 16y ago
      This is a sad fact. There are huge (irrational?) barriers for giving employees big raises or bonuses. Take Borland for example - they'd rather sue Microsoft for brain-drain (i.e. paying the employees more) than match the offers: http://news.cnet.com/2100-1023-279561.html http://news.cnet.com/2100-1023-279561.html
      • llimllib 16y ago
        > There are huge (irrational?) barriers for giving employees big raises or bonuses. Since they exist at almost every company, I think it seems probable that it's rational. Here's a simple possible argument for their rationality: Creating big barriers to large raises/bonuses discourages employees from sharing salary info, since there's little they can do about it. Furthermore, the more your employees are worrying about their salary, the less they're working.
• ChuckMcM 16y ago
  Sounds like a Google story. But regardless, some people define 'winning' as getting more out of you than you get out of them. Sometimes those people get into management positions, and when they do their groups seem to develop really wide pay ranges for the same amount of work. If you're a senior manager and one of your managers is trying to get points because "I can convince him to join for half what the last guy cost." then you need to jump on that problem right away. Managers have the challenge when they pay someone $X but they aren't doing the same level or quality of work of someone making $X - $Y. As a manager you have three choices: 1) Bring the lower paid person up to an equivalent level 2) Fire the guy making "too much" and replace with someone who is more calibrated to your organization. 3) Engage in a potentially unsuccessful campaign to bring the contribution up of the under performer. Of the three #1 is the "easy" one (giving people raises is always pretty easy), #2 is the "quick" one (especially if you're in a place where turn over is expected) and #3 is perhaps the biggest gamble (both the opportunity cost of not having the guy perform and the possibility he may never get there). It's one of those things that is different about being a manager vs being an individual contributor. Things are weirder in pre-IPO + post-IPO worlds where people assume that if they are throwing around a bunch of money its because they got it from stock or something. It can be psychologically difficult on someone who has a lot of money due to an IPO but is doing the same "level" of work as someone who joined later and got post IPO stock. Harder to manage and harder to deal with morale issues if they start 'resting and vesting'. Google was famous for having a 'personal multiplier' which would adjust your bonus and a 'median salary' for your pay grade but they wouldn't tell you either of those numbers (they made it a policy not too) so it was impossible to back check to see whether or not your bonus reflected your work or was just a beauty contest. When the company won't tell you what the median salary is for your pay grade that should be a red flag. But not sharing individual points across the spectrum I can see the argument for that.
• patio11 16y ago
  That guy could have been me. Modest upbringing, lean living, doormat at negotiations, accepting absurdly low compensation because it seemed like the thing to do at the time, check check check. I'm glad he is doing better now. That said, mission effing accomplished for the company: they're well north of a million dollars richer because good little kids don't drop their drawers or talk salary numbers. This topic makes me feel positively Marxist: we're willingly participating in a system designed and perpetuated to exploit us because to do otherwise would be impolite.
  • daemin 16y ago
    Loved your tweets on salary negotiations from last night, pity I haven't properly followed through on them in recent times.
  • roc 16y ago
    Ah yes. The old bit where social/moral obligations and judgments are only applied to normal citizens and never corporate citizens. When a private individual walks away from an underwater mortgage because the deal suddenly sucks, they're seen as a scum-bag leech whose word isn't worth dirt. Get the economic-justice crowd in on the discussion and they start bandying about "debtor's prisons" and erecting straw-men for the dead-beat bonfire. But when a bank walks away from an underwater property because the deal suddenly sucks, they're seen as smart. Shrewd. Walking might even be a bonus-worthy decision. Not that private individuals are incapable of screwing one another over and somehow dodging social judgment [1]. It's just far, far less common. And the best treatment they get is a polite look in the other direction. No-one's printing an Op-Ed celebrating those decisions and castigating any attempts at socio-moral critique. [1] For some reason we all look the other way when it comes to immigrant au-pairs. And that's horrible.
• yason 16y ago
  I've learned an interesting relation regarding salaries myself. It's not about the amount that you can live with, or what you think you need but about appreciation. I was such an idiot earlier: this whole angle was anything but clear to me. Early in my career I never asked much and I was quite happy with what I got because I didn't spend that much. All my salaries were big enough compared to the previous salary that I didn't even think much about the fairness of it all. Given also that as a programmer I was still enjoying better than the average national salary and still better than my dad. But eventually I realized that the only tangible way a company can truly appreciate a good employee is biting the bullet and by paying him a bigger compensation. Even if he doesn't need it. In the previous job I stayed for five years. Year by year I started to wonder when will they give me a raise: I still liked the job and I was considered a good programmer. I was already approaching the senior status earlier, but they reworked their career plan and bumped seniority forward into the future. Of course, seniority would have meant some standard increase in the salary. It took me those five years to determine my own value and at the end of it, I left at the brink of my five-year review that turned into an exit interview in promptu. It wasn't about me physically needing more money: it was about me deserving being paid more money for my skills and experience, about my employer actually acknowledging their appreciation towards my contributions. These days, I enjoy about the double of the average salary in my country. Quite a considerable increase! I still don't need all that money which has allowed me both to voluntarily work part-time and to also invest part of my earnings monthly. But now I feel like finally receiving each month the appreciation I never got in the previous job. Given my skills and experience, I'm being paid much closer to my market value now and that is what matters, eventhough I still live a small life and could easily live on my old salary. Job markets are like any other markets: the correct price is not the cost of production plus some profit (or employee's cost of living + some more) but an arbitrary agreement between the smallest amount an employee will accept and the highest amount the employer will pay, an agreement that makes both equally happy. The next time I'll negotiate a salary, I will have a request ready for an amount that is high enough that I won't be in a hurry to get a raise, but which is hopefully within reasonable limits depending on the job. In the case it's too high for the company, I'm willing to scale back the salary along with my monthly hours, linearly. But my value per hour remains the same. I know my worth now.
  • 16y ago