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A calculation using public US and German labor-cost data estimates the hourly cost of a full-time developer and shows how to compare it with an outside specialist’s rate. The result depends heavily on how much work the employee can actually do; the source says its figures are estimates, not market rates or financial advice.
Thorsten Meyer AI published a cost comparison on November 6, 2026, estimating what a full-time developer costs an employer per hour actually worked in the United States and Germany. The calculation gives businesses a way to compare an employee’s estimated cost with a specific contractor quote, while showing that the result changes substantially with workload utilization.
For the US, the article combines the Bureau of Labor Statistics’ $135,980 median annual wage for software developers in May 2025 with employer-cost data for management, professional and related occupations from June 2026. Applying an estimated 1.28 cost factor and dividing by about 1,830 hours actually worked produces an estimated employer cost of about $95 per productive hour. This is the article’s calculation, not a published BLS figure specifically for software developers.
The BLS reported that the professional occupational group averaged $78.88 per hour worked in total employer compensation in June 2026, including $54.06 in wages. The article derives its 1.28 factor by comparing total compensation with wages plus paid leave. It estimates that an employee with 2,080 paid hours works about 1,830 hours after accounting for paid leave.
For Germany, the article cites Destatis data reporting €29 in non-wage labor costs per €100 of gross pay in 2025 and an average labor cost of €58.50 per hour worked in the information and communication sector. That sector-wide figure covers all jobs, not only developers. The article also cites SHRM’s 2025 average non-executive cost per hire of $5,475, which it estimates adds roughly $3 per hour when spread across a year of work.
IT staff augmentation vs full-time hiring Find the break-even point
Compare an employee’s estimated cost per productive hour with a real specialist quote. The hiring threshold depends heavily on how much useful work the employee can deliver.
How the comparison works
Put both options on a cost-per-useful-hour basis.
Include salary, benefits, payroll costs and recruiting.
Account for paid leave and the work the role can actually deliver.
Use a real specialist rate and consider assignment duration, onboarding and handoff.
Utilization changes the threshold
When useful work falls, fixed employment costs are spread over fewer productive hours.
Choose for the work ahead
The right option depends on workload, duration and the value of retaining expertise.
- May suit short or uncertain assignments.
- Compare the quote with your company-specific threshold.
- May suit continuing work that keeps a developer busy.
- Retaining company knowledge can matter.
Workload Sets the Hiring Threshold
The central point is that the hourly break-even rate depends on how many useful hours a hire can deliver. The article estimates that at 50% utilization, the effective cost per useful hour roughly doubles, raising its US example’s break-even rate from about $98 to about $197. The stated $98 starting point includes the article’s estimate of recruiting costs, while the roughly $95 figure is its base employment-cost calculation.
That distinction matters for managers comparing a defined project with a full-time role. A specialist hired for a short, uncertain assignment may cost less overall than keeping an employee underused. A continuing need that keeps a developer busy may favor hiring, particularly when retaining company knowledge has value. Those are decision guidelines, not universal outcomes: the actual comparison requires a real vendor quote and the employer’s own costs and workload estimate.
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Comparing Costs per Worked Hour
The article frames the comparison around cost per hour actually worked, rather than salary alone. Salary omits benefits, payroll-related costs and paid leave, while an outside specialist’s quoted hourly rate is already expressed in hours billed. Converting both sides to a common unit is meant to make the comparison more useful.
The source does not provide contractor market rates or name staffing providers. It says published rate surveys with a sufficiently clear method were unavailable for its purposes, so readers should use quotes they have received. The US and German figures also come from different measures: the US estimate combines occupational wage and employer-cost data, while the German €58.50 figure is an average for an entire industry sector.
“A salary is not the cost.”
— Thorsten Meyer AI article
Inputs Vary by Employer
The estimates do not establish what a particular company would pay. Actual salaries, benefits, paid leave, recruiting costs, contractor rates and billable hours vary. The article does not supply a published contractor-rate benchmark, and the German sector average is not specific to software developers.
The source also says evidence about how much coding agents increase developer productivity remains unsettled. It does not quantify an AI-related change to the break-even calculation. The estimates are based on labor data from different periods and methods, so readers should treat them as a framework rather than a direct comparison of identical jobs across countries.
Apply the Formula to Quotes
Businesses can apply the method by estimating a role’s full annual employer cost, subtracting hours paid for but not worked, and dividing by the hours of useful work expected. They can then compare that rate with an outside specialist’s quote, including the assignment’s likely duration and any onboarding or handoff costs.
The article points to a company-specific calculation as the next step; it does not report a follow-up study or a scheduled policy or industry milestone. Any decision will depend on the employer’s actual quotes, workload forecast and need to retain expertise.
Key Questions
What is the estimated cost of a US software developer per hour worked?
The article calculates about $95 per hour actually worked, using the BLS median software developer wage for May 2025, employer-cost data from June 2026 and an estimate of annual hours worked. It is not a BLS-published developer-specific hourly cost.
What does break-even rate mean here?
It is the highest hourly rate for an outside specialist that the article’s calculation says a business could pay before the estimated cost of hiring becomes lower. The threshold changes with employer costs, recruiting expenses and expected utilization.
Why does utilization affect the comparison?
If a full-time employee has fewer useful hours of work, the employer’s fixed costs are spread across fewer productive hours. The source estimates that at 50% utilization its example’s break-even rate rises from about $98 to about $197 per hour.
Does the article provide contractor market rates?
No. It says it found no published rate survey with a clear method for its purposes and gives no provider names. It advises readers to compare the calculation with quotes for their own work.
Source: Thorsten Meyer AI
