Even so, his point still stands. The upper range of developer salaries in Czech Republic, before taxes, is $3000 to $5000. The country is considered Central Europe.
If you go for Eastern Europe, Hungary/Poland/Ukraine, that's enough to afford the best people.
Income tax (at some bracket) is a percent of income. What does it matter if it's "5k to cover taxes" lol, it's not like its a flat expense that 5k may or may not cover.
Even 3000€ or even 2500€ take home pay per month would let me live a very good life (for me) in a sunny, safe, beautiful place in Europe. All the while I'm working for a free software project, one which I'm a fan of (not working to make my boss rich, not inventing better ways to make people click on ads). What else could I possibly ask for.
I'd imagine they aren't paying any cut to recruiters. I guess that leaves real estate, equipment, contractor, and legal/accounting (assuming outsourced) overhead.
If it's Europe my understanding is there's substantial expenses paid to employment security overhead, it's how they pay for things like the exceptionally good maternity leave and unemployment benefits type stuff.