Every company is different in terms of the benefits they offer their employees. Even so, some extra costs are standardized and mandated by the laws of California and the United States. These include social security, medicare, unemployment insurance, and health insurance.
- Social security (6.2%) – $8,741
- Medicare tax (1.45%) – $2,044
- State Unemployment Tax (varies by year) – $2,114
- Health Insurance (Single) – $7,200 (estimated) or (Family) – $20,500
Adding these basic legal requirements increases the cost of employment to $161,000 for single developers or $174,500 for developers with families.
Attracting software developers in San Francisco ordinarily means offering more than the absolute minimum in employee benefits. Some combination of dental plans, life insurance, health clubs, gyms, 401-k plans, stock options, free daycare services, free lunches, and other fringe benefits are often part of the equation. These are highly variable, but also need to be factored into employment costs.
You also need to add in overhead costs. Will you require your software developers to work in the office? If so, based on a US average of 150 square feet per employee and typical $80 per square foot rate in San Francisco, that’s another $12,000 per year per employee. You’ll need to furnish the computers, hardware, and furnishings they require. Add utility costs, consumable supplies, and insurance for your office. Finally, there’s additional overhead to factor in on a pro-rated basis for your human resources team, legal staff, accounting and payroll.