Effort costs are not just the salaries of the software engineers who are involved in the project. Organisations compute effort costs in terms of overhead costs where they take the total cost of running the organisation and divide this by the number of productive staff. Therefore, the following costs are all part of the total effort cost:
This overhead factor is usually at least twice the software engineer’s salary, depending on the size of the organisation and its associated overheads. Therefore, if a company pays a software engineer $90,000 per year, its total costs are at least $180,000 per year or $15,000 per month.