Profit Share Calculator of Sanctuary Computer
URL = https://github.com/sanctuarycomputer/studio
Context
Sanctuary Computer:
"At Sanctuary Computer, we believe there's a better work environment than the poles of freelancing, or working a fulltime job. We think that when talented and creative people can see the effects of their skill and ability effect the bottom line, and feel true ownership in their work, they will naturally make better decisions for clients, the studio, and themselves.
There's big impacts for the studio, too! As a company, we're able to offset risk by providing greater incentive for reward at the end of the year. We're able to lower stress and worry less, knowing that everyone on the team understands how our bottom lines work, and has empathy for the ups and downs of businesses. Transparency is a big thing for us.
We've always been about making Sanctuary an exciting alternative for creative people, and for that reason, we believe a profit share makes for an interesting and exciting way forward."
(https://profit.sanctuary.computer/)
Description
Sanctuary Computer:
"A really simple metric, designed to balance studio efficiency against profit.
1. Profit Share Units (PSU)
Teams are more efficient when they work together longer. Therefore, Profit Share Units are a bit like vested stocks. A team member earns one per month, (capped after four years at 48) and they correspond to a profit share at the end of the year.
2. Salary Cap @ 167k USD
All salaries at Sanctuary Computer are capped to 167k USD. A team member's ability to earn a full salary depends on how close they are to seniority, in addition to a few other non-technical points.
3.Paid in December
Sanctuary does the profit share calculations in November, to be paid out in December. This helps the studio dramatically lower any tax hit, and makes sure everyone's profit share hits early in January."
(https://profit.sanctuary.computer/)
Characteristics
Calculated Metrics
Sanctuary Computer:
The below metrics are key in calculating how profit is divided.
Raw Efficiency: A simple metric based on income vs expenses
NaN,i.e. Normalized Efficiency: This metric is normalized to be more insightful
NaN Payroll Buffer: Needed to safely make payroll for 0 months
Internals Budget: An allowance for upgrading the studio, etc
Gross Profit Share Pool: The money put aside for for profit sharing
Reinvestment Fund: Money remaining to do big things
FICA Withholding: The money we'll be charged in FICA tax
Profit Share Pool after FICA Withholding: The profit pool leaving our bank after FICA Withholding
Total PSU Issued: The total PSU issed across the team
Value per PSU: How much profit each PSU is worth this year."