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
It seems on the high end, but not too unrealistic.