As a technology leader, building a world-class engineering team within a sustainable budget is one of your most critical responsibilities. While top-tier talent drives innovation, the total cost of that talent can spiral quickly, affecting both product timelines and company viability.
What drives the real cost of a US developer
For a senior software engineer in a US tech hub, base salary alone can range from $170,000 to $220,000. But that accounts for only 70–75% of the total cost. The remaining 25–30% comes from several additional cost categories:
- Payroll taxes and insurance. Includes employer contributions to Social Security (6.2%), Medicare (1.45%), Federal Unemployment Tax (FUTA), and State Unemployment Tax (SUTA). Together, these add thousands annually.
- Health insurance and benefits. Employers typically cover a significant portion of premiums for medical, dental, and vision. Add-ons like life insurance, disability, and 401(k) matching further increase costs.
- Recruiting and hiring. Recruiter fees often run 20–30% of a developer’s first-year salary. Job board ads, sourcing tools, and internal interview hours add to the expense.
- Onboarding and equipment. Includes high-performance laptops, monitors, licenses, and workspace setup. Lost productivity during ramp-up also contributes.
- Office space and perks. For non-remote teams, add rent, utilities, supplies, snacks, and team activities.
Example: Fully-loaded cost breakdown
For a senior US developer with a base salary of $180,000, here’s what a first-year cost might look like:
- Base salary: $180,000
- Payroll taxes: ~$15,000
- Health and benefits package: ~$22,000
- 401(k) contribution match: ~$7,200
- Recruiting fee (20%, amortized): ~$36,000
- Onboarding and equipment: ~$5,000
Estimated total cost: ~$265,200
Even with conservative estimates, your first-year investment easily surpasses a quarter of a million dollars for a single senior hire.
The nearshore advantage: A simpler, transparent model
Howdy.com’s nearshore hiring model provides a cost-effective and operationally efficient alternative. Instead of managing dozens of separate cost inputs, you get a single, all-inclusive rate for each team member.
Why this model works better for scaling:
- One predictable rate. No separate charges for benefits, taxes, or HR overhead. Everything is included in a single monthly invoice.
- No recruiting fees. Howdy.com handles sourcing and technical vetting, eliminating third-party recruiter costs entirely.
- Reduced admin burden. As the Employer of Record, Howdy takes care of payroll, compliance, and onboarding logistics so your team doesn’t have to.
This approach enables predictable budgeting and often results in 40–50% total cost savings compared to hiring a similarly skilled US developer.
Conclusion: The strategic choice for sustainable growth
Understanding the fully-loaded cost of a US developer helps technology leaders make better hiring decisions. What looks like a $180,000 hire can easily approach $265,000 or more once all real costs are accounted for.
For teams that need to scale without sacrificing talent quality, Howdy.com offers a better path forward. Our nearshore model connects you with top 1% LatAm developers, matched to your team and aligned to your time zone, with a simple and transparent cost structure.
It’s not just the smarter financial choice. It’s a strategic advantage built for scale.