Price is one of the most important decision factors when purchasing goods or services. No matter what your budget is, you always want to find a cheaper option without compromising quality. This is especially relevant for a service sector as costly as IT.
Developer prices can range from $10 to $100 per hour. So, how much should it cost to hire an app developer? Does this mean that a $100 developer is better? Or should you perhaps choose something in between, for example, a $50 developer?
This is a difficult question to which no one can give a direct answer; it’s up to you and your needs. What is important is to clearly understand them and have the required market information. That’s exactly what we’ll cover in this article.
P.S.: For the convenience of calculations, we use hourly rates rather than the average salary. It also allows for evaluating the real cost of the developers.
How to Calculate Hourly Rate
First, you need to determine the number of hours per day (8 for a full-time employee) and multiply them by the total number of working days per year (260 in 2023 in the United States).
Then, divide the annual salary by that number.
For example, based on Indeed’s annual salary data, the average developer hourly rate in the US is: $99,244 / (8 * 260) = $48/hour.
How the Software Developer Price is Composed
Firstly, you should understand that the price must be considered within the context of the developer’s work.
By itself, the figure of $48 per hour does not mean anything. To understand the economy of a particular project, you need to look at the bigger picture and understand exactly what a developer does.
Your ultimate goal is not to hire a developer. It is about solving a certain problem with the help of software. And the developer, no matter who is engaged in solving this problem. For example, developing a mobile application.
The cost of any software development consists of only two components:
Developer’s hourly rate * total development time = application cost
The second variable completely changes the idea of price. Because a developer who initially seemed more expensive may spend less time developing an application. Therefore, their cost will ultimately be lower, not to mention the quality of the code.
40 ($ per hour) * 180 (hours) = $7200
50 ($ per hour) * 140 (hours) = $7000
A higher rate per hour does not always mean higher development costs.
In this article, we will focus on the first variable: what the rates are and which factors they depend on.
Factors Affecting the Developer’s Cost
There are four factors that determine the hiring costs:
- Work format (hiring, contracting);
- Developer level (architect, senior, middle, junior);
- Technology (Java, JS, Android, iOS, etc.);
- Region (USA, UK, Germany, Australia, etc.)
Let’s consider each factor in detail.
App Developer Cost by Work Format
So, you need a software developer. You have two options:
- You can hire a developer for your team;
- You can work with them as an independent contractor.
Difference between employees and independent contractors
An employee is a person on the staff of a company who works for an employer. The employer controls the employee’s work – what will be done and how.
An independent contractor is an individual (freelancer) or legal entity (agency) that provides services for another individual or legal entity in accordance with an agreement between them – which specifies responsibilities, payment terms, scope, type of work, and other issues. However, they are not part of the employer’s company.
As already mentioned, when calculating the cost of hiring an app developer, you should understand the scope of the tasks to be done first.
If it’s a long-term project, then building an in-house team is imperative. It’s not even about money, it’s about building and maintaining expertise in the development process. This allows you to be independent of external factors.
If this is a short-term project, you need a developer for a couple of months to speed up development or temporarily plug the hole, so hiring an employee is simply inappropriate. In such cases, it is more profitable to work with independent contractors.
Is it possible to work with freelancers and agencies long-term? It is, and many companies do so. Further, we explain why.
The price difference between hiring and contracting
Determining whether a person is an independent contractor or an employee is important as it defines whether payroll taxes are withheld. You must withhold payroll taxes from employee salaries, but you do not withhold taxes from payments to independent contractors (except VAT for contractors located in the same jurisdiction).
VAT varies from country to country, but on average is about 20%.
Let’s consider two options:
- In the case of working with independent contractors, it’s simple – you pay them the agreed hourly rate or project amount.
- In the case of hiring a full-time employee, besides the hourly rate, you also pay additional costs:
- Training costs;
- Infrastructure costs.
Each country has its own legislation, and such costs, according to MIT, can reach up to 40% in addition to hourly rates.
Based on this, the developer’s annual salary turns from $99,244 to $99,244 + $34,735 (35% of 99,244) = $133,979 or $64 per hour.
Determine the amount of additional costs by examining the legislation of your country.
Types of additional costs
The types of additional costs and amounts vary from country to country. However, we can distinguish two categories of costs: mandatory and optional.
Mandatory costs are those that employers are required to pay by law. They include:
Payroll tax. This depends on the salary amount. Some of these taxes are withheld from employee salaries while others are your responsibility as the employer.
For example, in the US you are required to pay Social Security and Health Care Taxes (FICA) and Unemployment Taxes (FUTA and SUTA), and you must withhold some of the employee’s income tax and transfer it to the appropriate tax agency.
Benefits are one of the biggest items of expenditure in the cost of hiring an employee. For example, federal benefits in the United States include:
- Medical insurance;
- Payment of overtime hours;
- Unemployment insurance;
- Unpaid family leave with job retention.
In addition, your state or city may require additional benefits, including:
- Teeth and vision insurance;
- Pension contributions;
- Paid weekend (including vacation, sick leave, etc.);
- Disability insurance.
While additional benefits are optional, many companies offer them to attract employees.
Also, when working with full-time employees, you can face HR activities costs, infrastructure costs, ongoing training, and staff development costs.
Are full-time employees always worth more than contractors?
It may seem like hiring an employee is always more expensive. But you should keep in mind that all independent contractors also pay self-employment taxes and fees. Therefore, they may include these costs in their hourly rate. This means that the hourly rate that you pay for their work may be higher than the hourly rate for an employee. However, do not forget the hidden costs for employees mentioned above.
Difference between freelancers and agencies
A freelancer is an individual contractor who works directly with clients. This can be through platforms such as Upwork, Freelancer, Fiverr, etc.
An agency is a contractor company that provides services to its employees. You can find a list of agencies on sites like Clutch.co, Designrush, Goodfirms, or simply on Google.
Both agencies and freelancers have their advantages and drawbacks. However, perhaps the main difference is the fact that agencies have the resources to schedule and replace their employees, as well as scale quickly and reduce resources as needed. This allows for reducing project risks and having more confidence in meeting deadlines. Due to this, agency rates are often higher than individual freelancers.
If you only have a few projects to handle, a quality contractor will be cheaper than a hired employee. Once you have a lot of projects coming up, it will be more profitable to hire an employee. A mixed model seems to be the ideal combination – employees to deal with core tasks and contractors to speed up development when needed.
App Developer Cost by Level
Like with other factors, before comparing the app developer cost by their level, it is necessary to determine: the tasks they will perform, deadlines, and the desired level of quality and control from your side. This will help you eliminate unnecessary options that seemed profitable at the beginning. If this is difficult for you, we can estimate your project work free of charge and compose the optimal team lineup.
Software developer levels: from trainee to architect
There are usually five levels of a developer:
When determining the level of an app developer, knowledge and technical skills weigh more than work experience.
Now we will focus on the financial side of the issue.
How much does it cost to hire developers according to their level?
We analyzed data on the salaries of developers of various levels on platforms such as Indeed, Glassdoor, Stackoverflow, Payscale, and Ziprecruiter, and we found an interesting pattern. Regardless of the region we looked at, the percentage ratio of salaries for developers of different levels was approximately the same. Let’s look at the ratio in the United States:
According to Ziprecruiter, the average developer salary in the US (without additional costs) is:
The wide variation in prices is due to different technologies and states. In San Francisco for example, prices can be significantly higher than the American average.
In comparison, the average developer salary in Germany is more homogeneous due to the homogeneity of the German economy:
The greatest gap in salaries in both cases is for Middle and Senior developers. This can be explained by a qualitative leap in responsibilities, his independence, and their ability to lead a development team.
Whom to choose if you don’t have enough money
Seems that everything is simple. You have requirements, and there is a pool of developers on the market. But sometimes budget limits the choice, and you cannot afford to hire the developer you need.
Our business experience, and the experience of hundreds of other companies, shows that the developer level is the variable that you cannot save on, as it may increase the final app development cost.
Poor project quality = higher costs in the future
To reduce costs, you can experiment with other variables. For example: work with a contractor instead of hiring a developer, change technology, choose a different region, or revise the scope of the work.
App Developer Cost by Technology
The third most important factor differs from the others. You can only choose the technology once when starting an app development project.
If something goes wrong, you can fire the developer and hire a new one. You can change the region, and you can hire a more experienced developer, but it’s extremely costly to change the technology in the middle of app development.
The choice of technology is based on three elements: scaling and performance requirements, expected functionality, and the human resources available in the labor market.
Most used technologies in 2023
According to the annual Stackoverflow report, the following programming languages were the most used in 2023:
How much does it cost to hire an app developer according to their technology stack?
The cost depends on the complexity of the language, and the availability of relevant resources, and generally differs from country to country. However, there are some patterns.
According to Stackoverflow, the average world cost of developers in 2023 was:
You can observe the most used languages are at the bottom of the top-paying technologies and vice versa.
What to look for when choosing a language
Again, an app development budget does not always allow for choosing the best option. If this is the case, you need to ask yourself a few questions:
- What functionality will be implemented in the application?
- What type of application is it (web, native, hybrid)?
- Will the application scale in the future?
- Is it an internal corporate app or a commercial one?
After answering them, you can make up a pool of languages that theoretically could suit you. If this causes difficulties, we can consult you on the technology stack for your project.
Cost of Hiring an Android App Developer vs. an iOS App Developer vs. a Cross-Platform App Developer
The cost of mobile app developers is influenced by the supply and demand dynamics of the local markets. Thus, StackOverflow reports a mobile app developer can cost even more than a full-stack developer in the US and UK.
Eventually, the average cost to hire a mobile app developer primarily depends on the mobile platform.
Cost of hiring an Android app developer
Android developers typically have a track record in popular Java or Kotlin, Android SDK, and Android Studio IDE.
The hourly rates for Android developers usually range from $28 to $65 depending on the experience level and the region. Senior developers in regions with a high cost of living tend to earn the highest rates.
Cost of hiring an iOS app developer
The skill set for developing iOS apps includes Objective-C, Swift, and Xcode IDE.
Due to the narrower pool of experts and high demand, iOS developers tend to command higher rates than Android app developers. Typically, hourly rates for iOS developers range from $34 to $79, with mid-level developers starting at $45 per hour.
Cost of hiring a cross-platform app developer
A cross-platform app developer specializes in frameworks like React Native or Flutter, which allow them to build apps that can run across Android and iOS mobile devices.
The average range for cross-platform developers is close to Android developers, which is $30-$74/hour. So building cross-platform apps and hiring respective specialists may provide significant cost savings rather than developing mobile applications for each mobile platform separately.
Here is a comparison of average mobile app developer costs:
App Developer Cost by Region
The average cost to hire an app developer mostly depends on their region. For example, a developer in the US could cost 10 times more than one in India.
The price range is so wide due to the inhomogeneity of the global economy. Neighboring countries belonging to a single economic area are similar in their pricing policies. However, the less they interact, the wider the price spread.
So, there are 12 key regions in the world that are engaged in software development: North America, Latin America, Western Europe, Northern Europe, Southern Europe, Central Europe, Eastern Europe, Africa, the Middle East, Southeast Asia, Eastern Asia, and Oceania.
Cost to hire app developers in North America
Key countries in the region: USA, Canada.
- The costs in the USA (without additional expenses) range from 37 to 77 USD/hour. Average cost – 53 USD/hour.
- The costs in Canada range from 31 to 65 USD/hour. Average rate – 44 USD/hour.
As expected, developers in the US are the most expensive in the region, and, looking ahead, one of the leaders in the world. The rate in Canada is slightly lower, but it is also quite high due to the developed economy and close ties with the United States.
Cost to hire app developers in Latin America
Key countries in the region: Brazil, Argentina, Colombia, and Mexico.
- The costs in Brazil range from 21 to 52 USD/hour. Average rate – 32 USD/hour.
- The costs in Argentina range from 19 to 49 USD/hour. Average cost – 29 USD/hour.
- The costs in Colombia range from 18 to 50 USD/hour. Average rate – 30 USD/hour.
- The costs in Mexico range from 18 to 60 USD/hour. Average rate – 32 USD/hour.
The cost of hiring app developers in Latin America is fairly homogeneous. Mexico stands out a little bit, probably due to its close location to the United States.
Cost to hire app developers in Western Europe
Key countries in the region: United Kingdom, Ireland, Germany, France, Netherlands, Switzerland.
- The costs in the UK range from 28 to 60 USD/hour. Average rate – 39 USD/hour.
- The cost in Ireland ranges from 30 to 60 USD/hour. Average rate – 43 USD/hour.
- The cost in Germany ranges from 32 to 56 USD/hour. Average rate – 45 USD/hour.
- The costs in France range from 26 to 60 USD/hour. Average cost – 37 USD/hour.
- The cost in the Netherlands ranges from 26 to 60 USD/hour. Average rate – 38 USD/hour.
- The cost in Switzerland ranges from 38 to 72 USD/hour. Average cost – 54 USD/hour.
The mobile app developer cost in Western Europe is fairly homogeneous. Switzerland stands out a little bit, where wages and the cost of living are average higher than in the rest of Western Europe.
Cost to hire app developers in North Europe
Key countries in the region: Norway, Sweden, Finland, Denmark, and Iceland.
- The costs in Norway range from 32 to 58 USD/hour. Average rate – 44 USD/hour.
- The cost in Sweden ranges from 26 to 52 USD/hour. Average cost – 35 USD/hour.
- The cost in Finland ranges from 30 to 54 USD/hour. Average rate – 43 USD/hour.
- The costs in Denmark range from 32 to 58 USD/hour. Average cost – 37 USD/hour.
- The cost in Iceland ranges from 29 to 52 USD/hour. Average rate – 42 USD/hour.
The rates in Northern Europe are fairly homogeneous and comparable to prices in Western Europe.
Cost to hire app developers in South Europe
Key countries in the region: Spain, Portugal, Italy.
- The cost in Spain ranges from 21 to 49 USD/hour. Average rate – 32 USD/hour.
- The cost in Portugal ranges from 19 to 48 USD/hour. Average rate – 31 USD/hour.
- The cost in Italy ranges from 20 to 50 USD/hour. Average rate – 33 USD/hour.
The rates in Southern Europe are homogeneous but lower than in Western and Northern European countries.
Cost to hire app developers in Central Europe
Key countries in the region: Poland, Czech Republic, Romania, Hungary, Serbia.
- The cost in Poland ranges from 23 to 50 USD/hour. Average cost – 35 USD/hour.
- The cost in the Czech Republic ranges from 22 to 50 USD/hour. Average rate – 33 USD/hour.
- The cost in Romania ranges from 22 to 50 USD/hour. Average cost – 33 USD/hour.
- The cost in Hungary ranges from 21 to 48 USD/hour. Average rate – 30 USD/hour.
- The cost in Serbia ranges from 20 to 50 USD/hour. Average rate – 29 USD/hour.
The rates in Central Europe are homogeneous and comparable to South European prices.
Cost to hire app developers in Eastern Europe
Key countries in the region: Belarus, Ukraine, and Russia.
- The cost in Belarus ranges from 20 to 48 USD/hour. Average rate – 28 USD/hour.
- The cost in Ukraine ranges from 19 to 50 USD/hour. Average rate – 29 USD/hour.
- The cost in Russia ranges from 22 to 55 USD/hour. Average rate – 31 USD/hour.
The costs in Eastern Europe are homogeneous and comparable to South European prices.
Cost to hire app developers in Africa
Key countries in the region: Egypt, Tunisia, Morocco.
- The cost in Egypt ranges from 15 to 40 USD/hour. Average rate – 23 USD/hour.
- The cost in Tunisia ranges from 13 to 38 USD/hour. Average rate – 21 USD/hour.
- The cost in Morocco ranges from 16 to 42 USD/hour. Average rate – 25 USD/hour.
The rates in Africa are homogeneous, but at a price level much lower than in Europe.
Cost to hire app developers in the Middle East
Key countries in the region: Turkey, Israel, Saudi Arabia, UAE.
- The cost in Turkey ranges from 19 to 45 USD/hour. Average rate – 28 USD/hour.
- The cost in Israel ranges from 31 to 75 USD/hour. Average rate – 45 USD/hour.
- The cost in Saudi Arabia ranges from 19 to 39 USD/hour. Average rate – 27 USD/hour.
- The cost in the UAE ranges from 26 to 48 USD/hour. Average rate – 36 USD/hour.
The cost of hiring mobile app developers in the Middle East is inhomogeneous. Developers in Israel are the most expensive in the region. In second place is the UAE. In Turkey and Saudi Arabia, the prices are approximately equal.
Cost to hire app developers in Southeast Asia
Key countries in the region: India, Philippines, Bangladesh, Vietnam, and Singapore.
- The cost in India ranges from 8 to 45 USD/hour. Average rate – 19 USD/hour.
- The cost in the Philippines ranges from 8 to 40 USD/hour. Average rate – 20 USD/hour.
- The cost in Bangladesh ranges from 7 to 38 USD/hour. Average cost – 19 USD/hour.
- The cost in Vietnam ranges from 10 to 40 USD/hour. Average rate – 20 USD/hour.
- The cost in Singapore ranges from 25 to 60 USD/hour. Average cost – 35 USD/hour.
The app developer rates in Southeast Asia are the lowest in the world. However, the more economically developed Singapore clearly stands out among other countries.
Cost to hire app developers in Eastern Asia
Key countries in the region: China, Japan, and South Korea.
- The cost in China ranges from 15 to 45 USD/hour. Average rate – 30 USD/hour.
- The cost in Japan ranges from 29 to 55 USD/hour. Average rate – 41 USD/hour.
- The cost in South Korea ranges from 17 to 40 USD/hour. Average rate – 28 USD/hour.
The rates for mobile developers in Eastern Asia are higher than that of their southern neighbors.
Cost to hire app developers in Oceania
Key countries in the region: Australia, and New Zealand.
- The cost to hire an app developer in Australia ranges from 33 to 65 USD/hour. Average rate – 42 USD/hour.
- The cost to hire an app developer in New Zealand ranges from 29 to 60 USD/hour. Average rate – 42 USD/hour.
The app developer rates in Australia and New Zealand are approximately equal.
How much does it cost to hire an app developer by region?
To sum up, app developer rates in 2023 (without additional costs) in different regions are the following:
Which region to choose to save money and not lose in quality
Recently, remote work has been on the rise, so businesses are not limited to hiring in their regions only. In case of a staff shortage in the local market, or a lack of funds, you can work with contractors from other regions.
When you are considering a region, think of several points:
1. Number of meetings. Decide on the number of meetings required per day. JayDevs experts say for well-structured development processes, one meeting a day is enough.
Too much communication is a bad signal, as these hours are paid the same as the development hours.
2. Timezone. If you need closer contact with developers, consider regions with the same time zone. For North America that would be Latin America. For Western Europe that would be Central and Eastern Europe or Africa. For Oceania and East Asia that would be Southeast Asia.
If the processes are set up, the time zone doesn’t matter much.
3. Cultural background. Choose developers with similar cultural values. This will make your work easier later on.
Summing up: Tips for Hiring App Developers at Cost-Effective Rates
In short, A combination of factors below may help you to find the right developer within the required budget.
1. Conduct a comprehensive market analysis
It is crucial to conduct comprehensive market research to gain insights into the prevailing rates and trends in the mobile app development industry. This will help you estimate app development costs and negotiate effectively with developers.
2. Determine the optimal tech stack
The right choice of technology will become the basis for other factors. Consider opting for technologies that are widely used and have a larger talent pool. This can help you find developers more easily and potentially reduce app costs, especially when scaling the project.
3. Explore offshoring opportunities
Consider outsourcing app development to countries with lower labor costs. Offshoring the project to a mobile app development company in Central or North-Eastern Europe can provide a cost-effective solution. Eventually, you can save between 20 and 40% of costs without sacrificing quality.
4. Use staff augmentation services
Staff augmentation allows you to strengthen your existing team with remote developers. This model provides a lot of flexibility:
- You avoid the costs associated with the hiring process and onboarding full-time employees,
- You can scale the resources up or down as needed, or set up a dedicated team of specialists focused solely on your project,
- Opting for European countries like Lithuania or Poland, you have access to middle and senior developers at affordable prices.
Collaborating with IT vendors like JayDevs can help to equip your development teams with highly skilled professionals while saving up to 40% on app developer charges.