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Cost comparison: dedicated developer vs in-house developer

This table compare approximate costs related with having web developer in house and hired dedicated one from Altima.

Methodology

We took average annual salary for Melbourne based developer with 3-5 years of experience. Then we calculated direct costs associated with employment:

  • hiring (we took moderate 15% from annual salary as recruiter fee and divided it on 4 years of work);
  • minimal mandatory 9% as super; 
  • lowly 5% as benefits;
  • frugal $1920 per year for office space 
  • minimalistic $600 as hardware and software expenses per year.

For dedicated developer you pay just flat monthly fee. You don't pay for office space, taxes, recruitment and other expenses.

Next we have calculated the effective time that person will actually work. There is 52 weeks in the year, in Australia there is 38 hrs of work per week (dedicated developer works 40 hrs per week). We took next figures as on-effictevely used time:

- 7 days of sickness per year;

- 20 days of vacation (4 weeks minus Sunday and Saturday);

- 11 public holidays in Australia and 10 in Ukraine per year;

Non-working time: for your in-house developer you paid for all his/her time, for dedicated developer from Altima you pay just for public holidays time. It doesn't mean that dedicated developer can not be ill or take vacation, however in this case your invoice is adjusted to actual worked time, so you do not pay for that time, that's Altima's expenses.

Table: financial comparison - in-house developer with dedicated developer from Altima

Costs In house (Melbourne) Dedicated from Altima
Annual salary 58000 47304
Hiring (est. 4 years of work) 2175 0
Super 5220 0
Benefits 2900 0
Office space rent 1920 0
Hardware and software 600 0
Total 70815 47304
Time to work    
Seekness 56 0
Vacations 160 0
Holidays 88 80
Total non work time 304 80
Work time 1672 2000
Effective cost per hr 42.35 23.65
     
You save per hr, $ 19  
You save per year, $ 23511  
You save (%) 44.16%  

 

Disclamer: we made our best efforts to collect relevant data when prepared that comparison, however in any individual case the actual figures will differ from indicated above, so make your own calculation.