Salary calculation for a startup

Manisha..this is a typical problem with start ups. There is no defined formula for this. You will have to go through an iterative process with founders to understand their financial needs and accordingly apportion salaries. Unless there is sufficient cash to pay for everything, do the allocation on need basis. If there is enough cash, do need + comparative market salary.

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Originally posted by : Nulls Brwal
	Salaries for gamers are often based on tournament winnings, sponsorships, and streaming revenue, varying widely.

why post random responses?

Thank you for your reply, I am thinking to divided it on the basis of proportion, suppose one employee is content creator as well as a marketing person, I am taking the average salary for both role as per industry standard, basis of this i can calculate the proportion of each role in his salary and show in expense as per PnL category.

that should be okay. Ensure that both founders are aligned to this. Differentiated salaries can often become a bone of contention between founders. 

Congratulations on preparing the P&L statement for the startup company! Dividing salaries between direct COGS (Cost of Goods Sold) and operational roles can be a bit tricky, but here's a suggested approach: 1. Identify the specific tasks and responsibilities of each person involved in both roles. 2. Estimate the time spent on each role (e.g., 70% on operational tasks and 30% on direct COGS-related tasks). 3. Calculate the total salary for each person. 4. Allocate the salary to each role based on the time spent on each task. For example: - If someone spends 70% of their time on operational tasks, allocate 70% of their salary to operational expenses. - If they spend 30% of their time on direct COGS-related tasks, allocate 30% of their salary to COGS. 5. Consider the value-added by each role to the company. If one role is more critical to the company's revenue generation, you may want to allocate a larger portion of the salary to that role. 6. Keep in mind that this is just an estimate, and you may need to adjust the allocation as the company grows and roles evolve. Remember to consult with a financial expert or accountant to ensure you're meeting all the necessary accounting standards and regulatory requirements. Also, consider the following: - Are there any specific industry guidelines or benchmarks for allocating salaries between COGS and operational roles? - Are there any tax implications to consider when allocating salaries between roles? - How will you handle changes in roles or responsibilities over time? By carefully considering these factors, you can ensure an accurate and transparent P&L statement for the startup company.

What ever contributes directly to generate sales is direct and rest all indirect.