How Much Does it Cost to Hire a Software Engineer?

Cristi Jora

about 3 years ago

How Much Does it Cost to Hire a Software Engineer?

The formula is simpler than it seems

So, you want to create custom software to overhaul your business? 

Easier said than done. You’ve spent hours working, stayed up long nights planning, and poured blood, sweat, and tears into your enterprise. But even the most experienced businessmen may be asking themselves, “where do you start when it comes to creating a digital platform?” 

Whether you have a small restaurant or an online merchandising company, hiring a software engineer can take your organization’s digital reach to the next level. As poet Paul Cookson once said, “Websites promote you 24/7. No employee will do that.” 

We’ve put together this guide to help you guesstimate just how much it will cost to hire a software engineer for your project or business. 

Three main factors


Most coding can be done remotely using repositories such as Gitlab

Many who are not in the software world don’t know where to start, let alone have the slightest clue what an acceptable price is for a software engineer or team of developers. 

The inner workings of the digital landscape are understandably intimidating for those who are unfamiliar, and choosing the right company or individual is key to getting your business where it needs to go. 

The crucial aspects of which you have likely already considered when creating your website, app, or online business are scale, design, and ease of use. You have already put aside part of your budget in consideration of these factors, but what else is there to consider? 

This is where things can get tricky for most business owners. Luckily enough there are just a few key variables to keep in mind when searching for the software guru that will give your business a booming digital presence. 

Whether you are a millionaire opening your next successful business or a first-time entrepreneur, the price for a software engineer largely comes down to three main factors.

Factor 1: Experience (or lack thereof)


Software development and coding is expected to grow dramatically within the next decade.

As with any profession, software-based or not, those with more experience will demand higher compensation. 

Freelance, entrepreneurial-minded software engineers just a couple of years out of college are generally the most competitive on price. They may or may ot have experience at big companies, and may require more input from a project management perspective in order to complete projects on time and on budget.  

On a budget? Seek out younger developers

Many computer science undergraduate programs are rigorous, meaning that grads need to become truly skilled devs in order to obtain their degree. Typically, though, it’s employment history that allows developers to negotiate for higher prices. 

Most organizations (maybe even yours) won’t be able to poach engineers working from the likes of Apple, Google, and any of the famous tech titans. Thankfully, that doesn’t mean the quality of work you will receive will be anything less than Zuckerberg-worthy

Expect to pay more for developers with 10+ years of experience

Senior tech leads with significant project management experience are going to cost a lot more than devs that have less experience, or who have experience in non-lead positions. 

The Tech Lead, for instance, is probably not going to look at you unless you can budget $400/ hour, or even more. 

Experience doesn’t necessarily correlate with talent

There are still only so many cozy software engineering jobs available amongst Fortune 500 companies. 

While this is changing by the day due to sheer necessity (software development as an occupation is expected to grow by over 20% in the next eight years), those freelance engineers advertising their services for company outsourcing are coding their hearts out to make it to ‘the big time,’ and your venture could be the finishing piece on a killer portfolio. 

Experience of your dev team can vary

Knowing how to technically write code and creating polished, functional software are two very different things.

Most teams will benefit from a mix of experienced engineers, and those that have technical skills but lack the raw time overseeing projects from start to finish. 

At BinarCode, teams we assign to projects typically include at least one senior developer and generally one to two junior developers. This is great for keeping costs manageable while ensuring that you don’t end up with a product that doesn't work as intended.

Factor 2: Location, location, location

Silicon Valley

Experience is important when it comes to pricing the work for your software engineer, but so is location.

Let’s put it this way, you could hire an Italian chef directly out of Venice…. or, if you knew where to look, you could hire the same quality chef out of Little Italy in New York City.

Where do you think of when you think of software engineers? Without batting an eye, we’d bet your mind went to Silicon Valley (you don’t need to lie to us). 

It isn’t a totally unfair misconception that some of the most competent developers live in the greater San Francisco Bay Area. Silicon Valley does have the highest concentration of software engineers in the United States, after all. 

But, and this is a big “but,” Silicon Valley and the SF Bay Area have some of the highest costs of living in the entire world

We hear stories from our American clients all the time. They all have one thing in common: before working with us, they received quotes from SV developers that doubled or even tripled their available budget.

While we’re sure that our northern California contemporaries are plenty talented, keep in mind that lattes don’t cost $6 each in most of the world. 

For this reason, location might be the biggest factor dictating the price of your development team.

Everywhere else

A beautiful (and increasingly utilized) aspect of software engineering is that, with the aid of modern telecommunications, nearly all aspects of project creation and management can be done from afar

While it may initially appear to be a classic ‘chicken or the egg’ scenario, digital coding and engineering have empowered coders with the ability to, well, do software engineering remotely.

In other words, it doesn’t matter where your company is because software engineers can be hired from almost anywhere across the globe.

The need for face-to-face connection is relatively unnecessary if cash flow is tight. Video chat is commonplace these days, after all. 

Hiring a remote team may enable you to build a better software product

If you’re like many of our clients, your number one focus is on making your vision a reality. Where exactly your developers operate is probably much farther down the list than ensuring that you get an awesome software product that does what you want it to.

Hiring an engineer out of expensive hubs like California and Washington will yield a higher price tag than let’s say, Arkansas or Cluj-Napoca

Those working in smaller cities or countries outside of Western Europe or the United States are equally as talented but command the inflated prices you’ll find in economic hotspots and places where housing prices continue to skyrocket. 

Factor 3: Project scope and complexity

The Big 3

To build your software product, you’re going to need to take care of three big tasks. The third item of these “Big 3” might not be done by a software engineer, but rather a dedicated UX Designer

  • Front end development
  • Back end development
  • Product design

Here at BinarCode we specialize in all three services and give you the freedom of deciding what service fits your needs best. 

Be aware that, depending on the complexity of each of these Big 3, budgets will vary. 

Automate your business, simplify your life

If you’re looking to create a computer program that mimics the human brain in totality and can hold a perfect conversation, be prepared to pay a fortune. This is cutting-edge technology that even the most advanced engineers are currently trying to create. 

If you need something that’s relatively simple and is designed purely to help you scale up your business, this is something that many engineers (us included!) do on a regular basis. 

Be advised that highly specialized development (i.e. blockchain, machine learning) will cost more than programmers working with more common technologies languages.


BinarCode is a software outsourcing company helping companies across the globe meet their custom software and web development needs.

Conclusion: Cost = experience + location + project requirements

Given the rapid pace of technological advancement within the software industry, you might feel like you need to get in on the software game in order for your business to stay competitive

The good news is that, even for technical laymen, understanding the factors that contribute to the cost of hiring developers will help you make the right choice for you and your business.

Software engineers like us can help you manage the development of your digital product with current strategies so you can spend more time running the business and marketing aspects of your enterprise.

Now, get out there and find your team!


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