Hourly rates by role
| Role | Rate |
|---|---|
| Design and development | $35 to $55 an hour |
| Specialist work: AI, cloud, and architecture | $45 to $80 an hour |
| Testing and quality assurance | $25 to $35 an hour |
Dedicated team pricing
| Team | Who is on it | Monthly cost |
|---|---|---|
| One dedicated engineer | One full-time engineer matched to your stack, with a delivery lead overseeing quality. | $6,000 to $11,000 a month |
| Starter squad | Two engineers and a part-time delivery lead. | $11,000 to $17,000 a month |
| Product squad | Two to three engineers, a part-time designer, a delivery lead, and part-time QA. | $18,000 to $28,000 a month |
| Scale team | Four to six engineers, a designer, a delivery lead, QA, and DevOps. | $35,000 to $55,000+ a month |
Outsourcing Software Development: Real Costs vs Hiring In-House
Here is how the real numbers compare, and where each option hides its costs.
The true cost of an in-house developer
A salary is only part of the cost. Add:
A common rule of thumb: the full cost of an employee is 1.3 to 1.5 times their salary. A team of five is a significant fixed monthly cost, whether or not there is enough work.
Key points
- Salary. Varies enormously by country and seniority. A mid-level developer might earn $60,000 to $140,000 a year in North America or Western Europe, and much less in lower-cost regions.
- Benefits and taxes. Often 20 to 40 percent on top, depending on the country.
- Recruiting. Agency fees of 15 to 25 percent of first-year salary, plus job ads and interview time.
- Equipment and software. Laptops, licenses, tools and a workspace.
- Management time. Someone has to lead, review and support the team.
- Training and development.
- Downtime. Holidays, sick days and slow periods still cost money.
- Turnover. Replacing a developer can cost months of lost productivity.
The true cost of outsourcing
Outsourcing replaces most of those costs with a single rate, but it has its own.
Key points
- Agency or vendor rate. Typically $25 to $200 an hour depending on the region and seniority. Price includes the provider's overhead, management and profit.
- Your management time. Briefing, feedback and decisions. Smaller than managing staff, but never zero.
- Communication costs. Time zones, language and cultural gaps can slow decisions.
- Contract and legal costs. Reviewing agreements, IP terms and data protection.
- Onboarding. The team needs time to understand your business.
- Switching costs. If you change providers, knowledge must move.
- Quality risk. A poor vendor means rework, which can double the cost.
Typical rates by region
These are broad ranges for agency rates in 2026. They vary by seniority and by company, so use them for orientation only.
A lower rate doesn't mean worse quality, and a high one doesn't guarantee good quality. Process, communication, testing and the actual people matter more.
| Region | Typical hourly rate |
|---|---|
| North America | $100 to $200+ |
| Western Europe | $80 to $180 |
| Eastern Europe | $40 to $100 |
| Latin America | $35 to $90 |
| South Asia | $25 to $70 |
| Africa | $25 to $70 |
A simple cost comparison
Imagine you need a team of four for 12 months. Numbers below are illustrative.
In-house (mid-cost market):
- Four developers at $90,000 salary plus 30 percent on-costs: about $468,000
- Recruiting: about $60,000
- Equipment and tools: about $15,000
- Management and overhead: about $50,000
- Total: about $593,000, plus months to hire before work starts
Outsourced (mid-priced vendor):
- Four engineers and a part-time manager at a blended $50 an hour for about 8,000 hours: $400,000
- Your management time and legal costs: about $20,000
- Total: about $420,000, with work starting in weeks
The gap grows if the project is shorter, and narrows or reverses for multi-year work with steady demand. For a 4-month project, in-house hiring rarely makes sense.
When outsourcing is usually cheaper
A project with a clear start and end. You need to start quickly. You need skills for a limited time, such as mobile, security or AI. You lack engineering management. You want to test an idea before committing to a team. Work is uneven, with busy and quiet periods
When in-house is usually cheaper
Development is continuous for several years. Product knowledge is a competitive advantage. You can attract and keep good engineers. You have strong technical leadership. Your product handles very sensitive data and you want maximum control
Hidden costs of poor outsourcing
Rework from weak quality. A cheap build that must be rebuilt costs more than a good one.. Scope disputes. Vague contracts lead to extra charges.. Lock-in. If you don't own the code and accounts, switching is expensive.. Slow communication. Delays stretch schedules and cost money.. Turnover on the vendor side. Key people leave, and knowledge goes with them.. Security gaps. Poor practices create risk and later cost.
How to keep outsourcing costs down
Define scope clearly, and start with a minimum version.. Choose on value, not hourly rate. Compare proposals on scope, team and process.. Pay for discovery first to reduce surprises.. Insist on ownership of code, designs and accounts.. Use milestone payments tied to delivered work.. Keep communication simple: a weekly call, a demo every two weeks and a shared task board.. Plan for maintenance from the start.. Document everything, so you can change vendors if you must.
Questions to ask before you decide
If you can't answer the second and third questions, outsourcing with a strong written process is usually the safer start.
Key points
- How long will this work last? Under 18 months favors outsourcing.
- Is the product knowledge a core asset we must keep inside the company?
- Who would manage the engineers day to day, and do they have the time?
- What does it cost us if the project slips by three months?
- How fast do we need to start?
- Can we hire and keep strong engineers in our market?
A hybrid is often the smartest
See our guides on agency, freelancer or in-house and pricing models.
Key points
- Outsource the first version, then hire a small in-house core as the product proves itself
- Keep a small in-house team for core product work, and outsource spikes and specialized tasks
- Use an outsourced dedicated team for flexibility, and add in-house leadership
What outsourcing costs with DECHY
Our pricing is published, so you can compare it with your in-house numbers. Design and development work costs $35 to $55 an hour. Specialist AI, cloud and architecture work costs $45 to $80 an hour. Testing and quality assurance costs $25 to $35 an hour.
For ongoing work, a dedicated engineer costs $6,000 to $11,000 a month, and a product squad with design and testing costs $18,000 to $28,000 a month. For defined projects, we quote a fixed price or a capped budget after a short scoping step.
These figures include project management, code review and the tools we use. You do not pay recruiting fees, equipment or office costs. You own the code and the accounts from day one.
To compare with your own numbers, start with the cost estimator. Or share your plans, and we will help you work out whether outsourcing, an in-house team or a mix makes more sense.
Next step
Weighing outsourcing against hiring? Tell us about your product and plans. We'll give you an honest cost comparison, including when we think you shouldn't outsource. Talk to DECHY.