Generally package is around half of what company spends per extra engineer. And $500k average for a tech heavy product company doesn't sound too far off.
When people say they get 500k they mean they get paid 200k in salary and got 300k in RSUs, with the details mixed around the edges. ICs aren't getting 500k salary except in a few rare cases.
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 $500k/year salary. It may be that the clerk is, all in, costing the company 3x their salary after indemnity insurance and so on. The dev will never reach 10%.
It's really not at scale. It's on the order of 500$ a month per dev for "gold" level care for a company of 50 people. I'm sure it's less the larger you get.
It might depend on the state and the age pool but I have to pay a percentage and based on that it's more like $10k/year. So you are almost 2x undercounting
... But maybe if the average employee of a company is 25 they could get a better deal
