HR, marketing, sales, management, office space, servers, licenses, insurance, etc.
It seems on the high end, but not too unrealistic.
It seems on the high end, but not too 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%.
For a 500K dev GP is correct, additional expenses will never reach 50K for someone making 500K.
... But maybe if the average employee of a company is 25 they could get a better deal