From her email, I believe she is talking benefits and taxes.
Let me try again this time emphasizing cost to employ. I’ll try this (since I am quazi-friends with her). If I was to fall over dead today and the company not replace me…how much would the company have saved by a year from now?
Sound good?
Thank you, everyone who responded to me. A very interesting discussion.
[QUOTE=BlinkingDuck]
As long as you pay me at least double my salary no matter how little you use me, sure. We ARE talking about my cost to employ me per year after all.
[/QUOTE]
Sure, I’d do that with a few realistic provisos. If you are going to work at the companies facilities you’d need to pay rent for office space, electricity, maintenance and IT support. If not then I’d be happy to waive any fees for you to remote into our facilities (obviously any technical support from the company would cost you, and I’d expect whatever deliverables you are required to provide to be done in a timely manner ;)).
It would be a bad deal for you though. I’ve done exactly what you are suggesting, and unless you are willing to do all of this with your ass hanging in the breeze your insurance costs alone will eat you alive. Your taxes will go up as well, and YOU will have to process them, which can be a pain in the ass comes tax time (I actually paid a tax consultant to do mine).
Not at all…you probably aren’t productive 100% of the time you are at work (probably more like 20-40% if you are a normal employee). If you are a consultant then a company would only pay you for the time you are productive. They wouldn’t have to pay you for lunch breaks, or cigarette breaks, or whatever. They would pay you strictly for the time needed to do whatever it is you do that they need. That’s more realistic than your desire for a flat yearly fee for whatever it is you do, but even then your company would still most likely save money…just not as much (probably not enough to make it worth their while, unless your cost loading is up where you originally said at $40k/$200k).
YOU, however, would lose out (at your specified ‘double your salary’), even though it would look like you are making a lot more. Again, been there and done that, and have the scars to prove it. When the dot com bust happened I went this route, and while on paper my salary went up, my costs went up a lot more and I ended up with less money at the end of the day than I had when I worked for the large companies I was working for before. I actually took a purported ‘pay cut’ to take my current job because it includes benefits like health insurance and a retirement…both of which turned out to be worth more to me than straight salary. YMMV, and if you are single and young you might make a totally different calculation.
-XT
Sorry, I don’t have any openings at the moment. But as soon as a req comes across my desk for an ignorant dumbass, you’ll be the first person I call.
[QUOTE=BlinkingDuck]
From her email, I believe she is talking benefits and taxes.
[/QUOTE]
Even if that’s all she is talking about that’s pretty thin…you must have a monumentally sucky benefits package is all I can say. My sympathies. But yeah…that’s not the entire cost loading as I’m using the term, just part of it.
They would save the cost of your salary, benefits and taxes, since a lot of the loaded costs are ‘sunk’…i.e. they aren’t really going to go up or down because you keeled over. You IT staff isn’t going to lay off someone because you died. Your HR staff isn’t going to downsize or stop updating their software because you kicked the bucket. Your accounting people aren’t going to reorganize because you shuffled off this mortal coil. Etc (because I’m running out of ways to say you took your final slumber ;)). All of those departments, and all the other support and logistics departments or vendors doing those services would have a non-zero amount of less workage to do because you weren’t there, they would pay a non-zero amount less for new computers, programs, cell phone and telephone services and in electricity because you weren’t there, but they wouldn’t restructure just because of that.
-XT
Dude, you can not tag the cost of 1000 branches on 1 employee when doing this analysis. I know the rough common way to do it is number of offices/number of employees but it is not realistic. Properly done you correlate each employee to the cost of their local or supporting office.
That is why it pisses me off that a company will have a huge office with call centers and manufacturing facilities in some posh area so they have the benefit of the address. The should have a small executive and PR office somewhere posh, and the bulk of the employees where facilities costs are much reduced, say main office in San Francisco and the bulk of the facilities in East Asshat Alabama or somewhere facility costs are minimal. My family did that, we had a small office in the Empire State Building and the factories in a string of small towns in western NY and North Carolina. At least until we [in the familial corporate sense] sold off the company in the late 60s.
I thought it was the US dollar that was doing some very silly things.
I didn’t say you could. The point I was making is simply that a super-duper-mega-conglomerate is going to have a higher overhead, and therefore a higher cost-per-employee, than a small Mom & Pop shop with 5 employees.
I agree, and I think most companies are moving away from doing that. My company is moving to a smaller HQ and letting just about anyone who wants to telecommute full-time do so. Overhead goes down, profits go up, and the employees are happier. Everyone wins.
Whoa you’re saying about $80,000 in benefits and taxes is sucky? Wow, maybe I really do need to do a job search.
Edit…could that be it? Maybe my view is whacked because I have a good salary but am still significantly below the median in the company I work for? Our company is not large but the median salary is high. If the average wage was $30K…maybe I could see other things adding up to more than that…maybe.
Doesn’t matter though…my gripe in the OP that started this WAS about me…not the general pop.
edit again - you’re right about it I think…they don’t pay for anything beyond single medical. The insurance is great but they don’t subsidize family insurance. I remember when they changed that 3 years ago…sucky might be right. They also don’t contribute much to retirement. They have virtually cut every allowance (like cell phone). Hmmmmm… seriously…haven’t really sat down and thought about all the cuts over the past 5 years…
About time I did a job search. I like to do it even if I am reasonably happy where I am. I just assumed most other places were cutting back as well but haven’t really thought about it.
I’m a weird duck…I actually LIKE interviewing 
Well, to a certain extent, but in the last few years the Swiss Franc has gone up versus pretty much every other currency too.
Huh? No way in a European country! My own gross pay is 50% of my net pay, and that is with low tax bracket (20% tax, health insurance about 8%, unemployment insurance, nursing insurance, pension insurance, all together 30%).
My employer pays almost the same percentage on the insurances (health, unemployment, nursing, pension) as I do from the gross. Plus the cost for Human Resources to do all the calculating of the employees, plus education and training and who knows what other fixed costs per month are factored into the calculation. The usual ratio I hear is that the employer calculates double my gross pay in his expense calculation.
If I’m not misunderstanding you, the $40K figure given by Blinking Duck is the gross pay figure. American salaries are usually given in pre-taxed dollars, so when somebody says they make $75K a year, that’s before taxes and everything else. The amount of that you actually see depends on your own tax situation.
I have only done basic expense calculations, but basically, you start with one person in accounting / payroll per X employees (based on “it takes 30 min. on average a month to do all payroll per employee; the payroll person works 40 hrs/week for 4.25 weeks/months, means … hours/month or … minutes, divide by 30, makes X employees” - so if taxes and govt. regs. are very complicated, it will take 45 min. instead of 30 min.; if everything is done by an accounting office because only 5 people are employed, ), and divide that salary by X. When you have X minus or plus one, it doesn’t matter greatly, but at 2X, you will have to employ another person in payroll. So firing one employee will not make a visible dent, but firing 100 means also one person in payroll being let go or transferred elsewhere.
And in Germany, the unions and the federal insurance are investigating with a fine comb the “false independent contractors” - when normal employees are laid off, then re-employed from the same company and work only for that company, doing the same work as before. A true independent contractor has other clients and does specialized work that justifies his indepent status.
A false indepent contractor is a way for businesses to screw the employees (who only get the option “leave and come back to our terms, or leave and be unemployed”), and the German federal insurance, as well as the unions, and the state, think that is a bad idea generally: independent contractors don’t pay unemployment insurance into the general fund, but insure themselves privately. If their net pay is too small for that, they will end up in poverty later costing the state money. Meanwhile, because they are de-facto still employees, they are not enriching the economy like true contractors (by creating jobs or making lots of money to pay taxes on), so they are a drain on the system.
Plus, the unions and the workers themselves don’t like to be screwed.
?? Obviously it’s the different culture - I get a statement for my salary each month (none of this “weekly/ two-weekly cheque” business) that lists my gross pay in Euros, then the amount subtracted for tax, each of the social insurances, other stuff added (like vacation or Christmas pay) and subtracted (like my “capital-forming investment”) and at the end it says “net pay … Euros, will be transferred into your account … at bank … in the next days/ on 25th of month”. (That’s also why I don’t think of how much I make per year, but per month - my yearly income I see once a year only).
Are you saying that Americans don’t get to see their deductions based on tax situation? Are not payroll taxes or earned-income taxes deducted automatically by your employer to count as down payment on total yearly income tax? (I think Fred Clark once wrote an article in his blog that the “April 15th is tax declaration time” meme was completely irrelevant to most normal working Americans because of automatic payroll deductions, and the only ones who complained about it were the ones who were earning too much compared to the rest).
pulykamell is using the word “see” to mean “see in your bank account” not “see on your pay stub.”
Yes in America your payroll taxes are taken out of every check.
ZipperJJ has my meaning right.
As for April 15, that’s when your exact tax bill gets settled. You’ll normally either get a refund or owe extra money to the IRS, depending on how your withholdings were set up and how you made tax payments throughout the year (if you’re an independent contractor, like me, you pay quarterly estimated taxes, but that’s slightly outside the scope of this conversation.)
When you said:
it sounded to me to be only almost agreeing with BlinkingDuck’s statement that one’s salary should be over 50% of employer’s expenses. He’s saying that for his $40K (gross) a year salary, it shouldn’t be costing the employer more than $80K. And that seems to be what you’re saying in the statement above. Of course, I may be completely losing the point here, so feel free to clarify.
Ah okay. I misunderstood.
When we (normal employees that is) talk about pay, we usually give the monthly gross pay, too "I get 3 500 - she only makes 1 500 and that’s gross). That is, if we talk about it all - some companies add a proviso “It’s not allowed to show your wage earning receipt to anybody else”, but the unions say that’s bullshit. Usually it’s those companies who pay too-low wages and don’t want the peons to learn about minium wage or union agreed wage, or see how people get screwed.
Also many Germans feel that talking about money is tacky or icky or indecent.
The mention of gross pay usually comes up when discussing “I can/ cannot afford … a vacation in X, a new car, buying a house” among friends, or when talking about how single moms can live on 1 200 Euros gross/ month.
There’s also the statistical skilled worker who earns a better pay of about 3 500 Euros, with one not-emplyoed wife (lower tax rate) and two children (deductions). So how much that higher-average worker earns and how that wage has changed over the last years compared to the inflation is often shown on the news and economic reports, because that a single person, unqualified in a Mac Job lives badly on their wage is accepted; that a person with three years of skilled training who has to support a family can no longer afford vacations or buy a home is something else.
Given the later-quoted figures of 3 times as much as gross pay, the difference in my point may seem slight, but when I read that BlinkingDuck thought that gross pay should be far below 50% of calculated expenses, I thought that was off.
Reading onwards, I realize that because of the health insurance setup differences, the US employers might have to calculate a higher factor to the gross pay than the European ones with a general health insurance: A German employer pays a fixed rate of about 8% of gross as his half of the health insurance, plus pension, unemployment and nursing. All togehter 30% of the gross. The only insurance the employer carries alone is accident, and those are bundled together by industry type into the Berufsgenossenschaften, the mutual insurance association, so the rates aren’t that high, either.
Those added costs aren’t “benefits”, either, because they are prescribed by law for all employees below managers. Benefits would be a company car (not for the peons, though) or a reduced rate for a year ticket for public transport (that’s just the emplyoer doing a deal because of the volume, not a real cost). Or some still have a 5 Euro fee to cover bank account fees (a holdover from old times). People employed in Munich by the state or city get an extra of 70 Euros living expense, because Munich is much more expensive than the countryside.
So any extra costs beyond those 30% insurance and accident insurance are :
the percentage for HR and payroll
rent for the offices, lighting, heating, furniture, IT
further education to keep up to date
etc.
I usually hear this given as double the gross, but obviously it will vary wildly by the industry type, the amount of training and skill the employees have, the size of the company etc. And of course private employers (as opposed to public ones) closely guard this figure because they don’t want the public or the peons to know how much they are worth, they just claim “Too much!”.