Full-Time Vs Freelance Software Developer 

Cost of Hiring a Full-Time Vs Freelance Software Developer 

As an owner of a software development company, you must consider cost as a major factor to grab ultimate benefits, maintain the strength, and utilize the advantages of skills. So, your decision should be based on how to use the pivotal role of cost for maximum quality production of your firm.

Now, in terms of employee recruitment, your wise decision regarding the expense of salary can be fruitful. More importantly, if you squeeze the skills of your employees at the most reasonable pricing structure.

So, here we will discuss the cost of two major types of software developers – Full-time software developer and freelance software developer.

The entire discussion will guide you in which condition, for what kind of project you should recruit a full-time software developer or freelancer to specify the financial interest of your firm.

Now, take a look at how to fix the budget ranges to hire full-time software developers and freelancers.

Cost Comparison Method For Full-Time Software Developer 

Depending on experiences, an IT manager fixes the annual salary of a full-time software developer during recruitment. Because a manager justifies the developer’s skill and problem-solving efficiency to understand how much productivity can be squeezed from the full-time developer for a high-end project. According to standard payscale, a company provides almost $112,921 to an in-house software developer yearly.

Here, some facts should be mentioned in the discussion of cost estimation for a full-time developer. These facts also create pressure on a company’s annual revenue. Those are the following:

  • There are so many companies and businesses, who offer more facilities along with lucrative pay scale. Those are unlimited tea & coffee, unlimited pay leaves, free gym memberships, etc. All these things play a vital role to attract young talent. Moreover, they deserve a standard lifestyle alongside their professional life. So, all these expenses are indirectly included with the cost of full-time software developers.
  • Bureau of labor statistics shows a standard and well-established company arranges more things for social security for their employees. Those are the following:
  1. For insurance (Life, medical, dental) a company has to provide 7.6% .
  2. Savings and retirement company provides  4.3 %
  3. For an annual bonus 3.5%

So, now the total annual cost of hiring a full-time software developer reaches up to $150,418 from $112,921. Now, more than $37,500 will be included in the annual expense of recruitment for a company.

The cost estimation of a full-time software developer does not end here. There are some indirect costs also. A renowned company spends almost 25% and 18% on overhead and G&A respectively. 

So, above $150,418, more $28,230.25 + $20,325.78 will be included with the overall cost estimation for annual recruitment expenses for the software developers. And the total amount reaches up to $198,974.

Cost Comparison Method For Freelancers

If you need the proper cost estimation to hire freelancers, we will show that you can save almost 50% on recruitment expense if you recruit freelance software developers instead of full-timers.

Having 10 years+ experience, the freelance developers will give you flawless performance at $60- $100 hourly. And you can select any freelancer as per the experience on a specific technology as per your project requirement. So, for a high-end project, you can depend on an expert freelance software developer at a reasonable pricing structure.

Besides, you can hire a freelance software developer on a global basis. So, you will get the scope to negotiate with cost as per the specific location.

Based on the market feedback, many IT firms hire two expert freelancers at $9000/month. And they have to pay $45, 000 for 2.5 months for their specific project requirements. But if they hire software developers on a full-time basis, they have to pay $100,000/ year and for two $200,000/year. 

In the payment procedure, there is a big difference between hiring a full-time Vs freelance software developer. As per your project requirement, you can pay freelance software developers on a per-day basis, if you involve them for different individual projects every day. Here, as an employer, you will get one more facility to fix costs based on project complexity. Or sometimes, employers also pay less for domestic projects and high amounts for overseas projects. As the payment procedure can be selected on a per-day or hour basis, you can opt for this scope to pay your freelance software developer as per project complexity.

Besides, sometimes, while a company goes through a tough time, you can appoint an expert or a newbie talent as per your project requirement, if you pick a freelancer recruitment option. So, as an employer, you get flexible choices to pay high for high-profile projects to an expert developer or to pay reasonable amounts for mediocre projects to a newbie talent.

So, in terms of cost and payment flexibility, freelance software developers can provide profitable service, rather than full-time software developers as per project requirement.

Hope you’ve understood, for more information contact Aalpha.

Also check: web development cost in India | web application development cost

Written by:

Muzammil K

Muzammil K is the Marketing Manager at Aalpha Information Systems, where he leads marketing efforts to drive business growth. With a passion for marketing strategy and a commitment to results, he's dedicated to helping the company succeed in the ever-changing digital landscape.

Muzammil K is the Marketing Manager at Aalpha Information Systems, where he leads marketing efforts to drive business growth. With a passion for marketing strategy and a commitment to results, he's dedicated to helping the company succeed in the ever-changing digital landscape.