The first hire for a startup is an exciting time! When a startup goes beyond the founders and has employees, the business can start to feel “real.” Understanding the cost of a startup employee goes beyond the salary though. Here’s a list of the items you need to consider when figuring out how much a new employee would cost:
- Salary, bonuses and commissions - no surprise there
- Employment taxes - which can be more than you’d think
- Benefits - usually about 20% of salary
- Perks - lunch benefits, learning benefits, cell phones
- Onboarding costs - computer, desk, company tshirt, etc.
- Ground transportation if you’re reimbursing for Ubers, etc.
- Web services and software allocations - how much software licenses do you need for that person? It can really add up if they are a web developer, or a sales person using Salesforce, for example
- Allocated rent - especially if you are in a WeWork or a shared space where you pay per person