Radical Gizmos logo

Sticker Shock

Got some sticker shock on our prices? Let's see what the salaried route might cost. Don't forget the "Considerations" section below the calculator. It's pretty important, but we don't want it to get in the way of people that just want a quick answer.

The real cost of a salaried employee is significantly more than their base salary, often estimated at 1.25 to 1.4 times the salary (source: Joseph Hadzima). If you're in a mature and "generous" company then drag the compensator slider closer to the 1.4 end. If you're in a solid but "no-frills" company, drag the slider near the middle. If you're a barebones company (such as a startup) then drag the slider closer to the 1.25 end.

Current: 1.30

Considerations

For employers

  • Employers must continue to pay their share of health benefits while a worker is on family or medical leave.
  • Salaried developers rarely put in 8 "technical hours" per day. It's closer to 4-6. Hourly workers tend to bill 4-6 hours per day and often finish tasking with a 30 hour work week.
  • Workers compensation, short and long-term disability, and other self-insurance costs are affected by employee head-count.
  • Employers may be on the hook to pay enrollment and management fees for 401(k)/retirement access for employees.
  • Employers may be required to pay state or local taxes/fees based on employee work location.
  • Employers may lose out on tax benefits for HSA and FSA contributions to direct employees when using contractors instead.

For independent contractors

  • Independent contractors often pay for health insurance at increased rates due to lack of leverage that large companies have in negotiations wth insurers.
  • Independent contractors must self-fund their health insurance, retirement plan and time off.
  • Independent contractors pay self-employment taxes, whereas employees and their employers split the tax burden 50/50.
  • Independent contractors take on average 3-4 week off of work each year. That has been factored into the calculations.

Disclaimer

This tool is not a formal accounting tool and was designed by a nerd going some Googling. We have made our best effort at accuracy but provide no guarantees.

Closing statement

We don't record any of this to make a sale or do analytics. It's all client-side except for the static resource requests that land in the server request logs (go ahead and check). If you want our services, you'll reach out to us. We aren't in the business of stalking potential clients.