In-House vs. Agency Calculator
The true cost of hiring, against the cost of a team you rent.
Your in-house team
Senior engineer
$/ year1Mid-level engineer
$/ year1Product designer
$/ year0DevOps engineer
$/ year0Project manager
$/ year0
Every salary here is editable. The defaults are only a starting point — put your own market rates in and the comparison becomes yours, not ours.
Employment assumptions
The agency side
- In-house
- $692,231
- Agency
- $648,000
Difference
$44,231
in favour of the agency
First-year costs people forget
- Gross salaries$165,000
- Employer overhead$41,250
- Recruitment (one-off)$29,700
- Equipment & seats$6,000
- Ramp-up (lost output)$25,781
In-house does not overtake the agency within 3 years at these numbers.
Where in-house wins
Cost is only part of it. An in-house team accumulates domain knowledge that never walks out of the door, responds in minutes rather than by ticket, and is the right answer for a product that is your core business. An agency wins on speed to start, breadth of skills you cannot justify hiring full-time, and not carrying the team through a quiet quarter. If this calculator only ever agreed with us, it would not be worth using.
Talk it through
Send us your numbers and we'll give you an honest read — including when we think hiring in-house is the better call.
Salary is roughly two thirds of what an employee costs. This puts the rest on the table — employer overhead, recruitment fees, equipment, and the months before a new hire is productive — and sets the total against what the same capacity costs from an agency. Every figure is editable, because the answer depends on your market, not ours.
Why is the salary not the cost?
Employer taxes, pension contributions, insurance, paid leave and equipment typically add 20–35% on top of gross salary before anyone has written a line of code. Recruitment adds a one-off fee, often 15–25% of first-year salary. And a new hire is not productive on day one. Counting only salary understates the real figure by a wide margin, which is why in-house so often looks cheaper than it turns out to be.
Is the ramp-up cost realistic?
It assumes a new hire produces roughly half their eventual output during the ramp-up period, and charges the difference as a first-year cost. That is deliberately conservative — for senior roles in a complex domain, three months to full productivity is optimistic rather than pessimistic.
When is hiring in-house clearly the right answer?
When the software is your core business rather than a supporting function; when you need decisions in minutes rather than through a ticket queue; when the domain knowledge is genuinely hard-won and you cannot afford for it to walk out of the door. Over a long enough horizon, an in-house team is almost always cheaper per unit of output. The calculator will show you that crossover point.
When does an agency win?
When you need to start now rather than in four months. When the work needs six skills you cannot justify hiring full-time. When the workload is uneven and you would be carrying a team through quiet quarters. And when you genuinely do not know what you are building yet — hiring permanently against an unclear scope is how teams end up with the wrong people.
Are the default numbers yours?
They are generic starting points, not our rates, and they are all editable. Put your own market's salaries and your own quoted agency figure in — including ours if you have it — and the comparison becomes about your situation rather than our assumptions.
We build the kind of software this tool is a small piece of — web platforms, mobile apps and design systems, end to end.