3 ms·

HR, marketing, sales, management, office space, servers, licenses, insurance, etc. It seems on the high end, but not too unrealistic.

hug 1y ago
It’s wildly and hugely unrealistic. The rule of thumb that employees actually cost a business roughly twice their salary is based on two things: 1. Retention. Hiring costs are “huge”, and so if you have a higher or lower average retention, may make up a disproportionate cost compared to salary. Ramp up time and institutional knowledge loss is no joke either. 2. A spread of average wages. 500k is not average, and a huge number of the costs are relatively fixed. $1,000 a month worth of software licensing isn’t an uncommon number and is fully 1/3 of the salary of a $3k a month or $36k/year junior clerk. It’s peanuts when you look at it next to a $500k/year salary. It may be that the clerk is, all in, costing the company 3x their salary after indemnity insurance and so on. The dev will never reach 10%.
- purplepatrick 1y ago
  Non-salary cost such as payroll taxes, benefits, workers comp, training, equipment, space add another 25-50% typically.
  - MrDarcy 1y ago
    They don’t, those are fixed. Even taxes are capped because TC includes equity. For a 500K dev GP is correct, additional expenses will never reach 50K for someone making 500K.
Loudergood 1y ago
US Health Insurance is stupid expensive as well.
- xeromal 1y ago
  It's really not at scale. It's on the order of 500$ a month per dev for "gold" level care for a company of 50 people. I'm sure it's less the larger you get.
  - dgoldstein0 1y ago
    It might depend on the state and the age pool but I have to pay a percentage and based on that it's more like $10k/year. So you are almost 2x undercounting ... But maybe if the average employee of a company is 25 they could get a better deal
jesseendahl 1y ago
I haven't traditionally seen these areas of spend rolled into Eng costs in the budgeting process.

hug 1y ago

It’s wildly and hugely unrealistic. The rule of thumb that employees actually cost a business roughly twice their salary is based on two things: 1. Retention. Hiring costs are “huge”, and so if you have a higher or lower average retention, may make up a disproportionate cost compared to salary. Ramp up time and institutional knowledge loss is no joke either. 2. A spread of average wages. 500k is not average, and a huge number of the costs are relatively fixed. $1,000 a month worth of software licensing isn’t an uncommon number and is fully 1/3 of the salary of a $3k a month or $36k/year junior clerk. It’s peanuts when you look at it next to a $500k/year salary. It may be that the clerk is, all in, costing the company 3x their salary after indemnity insurance and so on. The dev will never reach 10%.

purplepatrick 1y ago
Non-salary cost such as payroll taxes, benefits, workers comp, training, equipment, space add another 25-50% typically.
- MrDarcy 1y ago
  They don’t, those are fixed. Even taxes are capped because TC includes equity. For a 500K dev GP is correct, additional expenses will never reach 50K for someone making 500K.

Loudergood 1y ago

US Health Insurance is stupid expensive as well.

xeromal 1y ago
It's really not at scale. It's on the order of 500$ a month per dev for "gold" level care for a company of 50 people. I'm sure it's less the larger you get.
- dgoldstein0 1y ago
  It might depend on the state and the age pool but I have to pay a percentage and based on that it's more like $10k/year. So you are almost 2x undercounting ... But maybe if the average employee of a company is 25 they could get a better deal

jesseendahl 1y ago

I haven't traditionally seen these areas of spend rolled into Eng costs in the budgeting process.