Does the “1% of the population can be armed” rule typically include mercenaries?

I guess? 

Usually when we have a examples of a polity which uses mercenaries heavily – Carthage, the Italian city-states of the Renaissance, etc. – the mercenaries are substituting for their own population, which they can turn instead towards commerce, finance, manufacturing, and other worthwhile pursuits. 

So that tends to cancel things out as far as the 1% rule goes.