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Comment by zaroth | Hacker News Reader

It’s an old story. And a good one! I’m glad TFA acknowledges the huge PR benefits that accrued for doing this. It’s amazing actually we’re still here talking about it.

In certain businesses, there’s actually a lot to be said for only being willing to hire a person who can provide at least $70k of value.

It’s also a bit of a misnomer to laud the owner of a company and 100% of its equity for taking a salary cut.

All that said I think that greed and what I’ll call “celebrity” drives the income disparity between the median and the 90th percentile workers’ salaries at a given company far too high.

As an aside, this sentence was so tongue-in-cheek it was jarring;

> Jody Hall, a good liberal who worries about income inequality, owns a nearby cafe, Cupcake Royale. She chooses Gravity to process her payments, admires what Price has done and offers her own employees health care.

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I’m not sure of numbers but I’d imagine a 70k salary would mean higher than purely salary costs (depending on company industry etc) after other expenses

Probably more like 90k-110k.

Typical burdened labor rate is 1.3x to 1.5x of annual salary. Exceptions exist, but usually it’s clear why that’s the exception (e.g., exceptionally generous benefits for a competitve labor category, local laws, etc.).

Thanks for your post, I’ve removed the numbers from mine as it appears they were likely quite inaccurate

What? Are you including a large private office in costs?

Obviously there is a cost past salary but it’s not over 100%

correct.

in the US, there will be an extra ~10% above that for FICA/unemployment. The company will probably shell out another ~$12k for health insurance (I'm speaking averages here - I know some companies are very generous, and others aren't). Factor in some x% salary matching in to a 401k - say another 5%, and perhaps some other perks. Let's say there's another ~$20k on top of the $70k - that $70k employee may cost the company $95k.

If you then want to apportion office/equipment costs, you can do that too, but that $70k employee is not costing $140k (unless, perhaps, they're being very generous with some shares and there's a cost associated with that, and perhaps tuition reimbursement, company car and some other perks on top of what was mentioned above... maybe). Those sorts of things aren't generally given to someone in the US making $70k.

I know how the works. I own a business. The 130% above salary number doesn’t math out.

sure - wasn't trying to correct you, just to add on in the same vein as you were posting, that's all.

To be honest, my number was based on my rembering of opinions from people who were in management but were certainly not experts on HR budgets or something. So it could be very wrong

It’s the right idea but a bit inflated :) 100k total cost for someone making 70k may be a better starting spot for a guess.

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