The cost of hiring a software developer in the United States is $171,251 in the first year at the median wage: $135,980 in salary plus $35,271 in recruiting, employer payroll taxes and benefits. That is 25.9% on top of the salary, before the seat sits empty for a day and before the new hire ships anything. Recruit through an agency and the first year is $195,692.
Those totals are an EltexSoft calculation, made in November 2026. The method: start from the median annual wage for software developers, $135,980 in May 2025, and add three cash lines, each taken from a primary source: the average cost per hire, the employer's federal payroll taxes at 2026 rates, and the insurance and retirement costs employers report to the Bureau of Labor Statistics. Nothing in the $171,251 is an estimate of lost productivity. Those lines come later and are labelled as assumptions.
EltexSoft staffs engineering teams, so this is the number our rate gets compared with. I wanted it built from sources, line by line, instead of from the usual shortcut, which is to add 30% to the salary. On the same data it runs about $3,300 high.
The Three Cash Lines: $35,271
Recruiting: $5,475
SHRM's 2025 benchmarking survey of 2,371 members puts the average cost per hire for a nonexecutive role at $5,475. That is a mean. The median in the same survey is $1,200. I use the mean because it is the figure that carries the expensive searches, and the survey reports nothing by occupation. It includes recruiter pay, job boards, referral costs and agency fees, averaged over every kind of hire. With the median, the first-year total is $166,976.
The widely quoted $4,700 per hire is the same statistic from an older edition. An April 2022 SHRM article reported it as "nearly $4,700". The table behind it shows a mean of $4,683 and a median of $1,244, from data collected in 2021.
Employer payroll taxes: $10,444
IRS Publication 15 for 2026 sets the employer's share at 6.2% for Social Security on wages up to $184,500 and 1.45% for Medicare. On $135,980 that is $8,430.76 plus $1,971.71. Federal unemployment tax adds 0.6% of the first $7,000 after the maximum 5.4% credit: $42. Total: $10,444.47, or 7.68% of salary. State unemployment tax and workers' compensation are extra and vary by state, so this line is a floor.
Benefits: $19,352
The Bureau of Labor Statistics reports what employers pay per hour worked, by category. For professional occupations in private industry in June 2026: $50.98 in wages, $6.78 in paid leave, $5.47 in insurance and $2.75 in retirement contributions. A salaried developer's paid leave is already inside the salary, so I count only insurance and retirement, measured against wages plus leave: $8.22 over $57.76 is 14.2%. Applied to $135,980, that is $19,352. The denominator is our adjustment, not a ratio BLS publishes. The average also includes workers with no plan access or who do not participate, so a company with real health coverage and a 401(k) match will pay more.
The 30% Rule Runs About $3,300 High
The same BLS release says benefits are 30.0% of compensation for private industry workers. That is a share of total compensation, not an add-on to salary, and it already contains paid leave, bonuses, overtime and the employer's payroll taxes. Add 30% to a salary and then add payroll taxes, and the taxes are in twice.
Used alone, the rule is close. For professional occupations, every cost in that release beyond wages and paid leave is $15.93 an hour against $57.76 of wages and leave: 27.6% of salary, or $37,503 for a median developer (EltexSoft calculation). Thirty percent would be $40,794, so the rule runs $3,291 high.
My build is lower, $29,796 or 21.9% of salary, because it leaves out $6,827 of bonuses and overtime and about $880 of payroll taxes on that pay, state unemployment tax and workers' compensation.
With an Agency: $195,692
Contingency recruiters charge a share of first-year salary. The last network-wide data I could find with an IT breakdown is Top Echelon Network's for 2018: an average fee of 22% on IT placements. I found no newer measured figure, and no primary source for the ranges usually quoted. At 22%, the fee on a median developer is $29,916, which is 5.5 times SHRM's average cost per hire. It replaces the $5,475 instead of adding to it, since SHRM's figure already contains agency fees. First-year total: $195,692.
The Empty Seat and the Slow Start
Two more costs are real but are not cash, and pricing them takes an assumption. That is why they are not in the headline.
The vacancy. SHRM's 2026 benchmarking summary reports a median 39 calendar days to fill a nonexecutive role. Ashby's 2026 recruiting benchmarks, drawn from 93,000 jobs in its hiring software, show a median 75 days to the first hire for technical roles against 60 for business roles. Assumption: a day of an empty seat is worth at least a day of the salary the company was ready to pay, $372.55. That prices the vacancy at $14,529 to $27,941. We have written separately about what the hiring cycle does to a roadmap.
The ramp. The only current, measured, software-specific figure I found is DX's time to a tenth merged pull request: 33 days on average as of April 2026, from a sample of 400 companies, and 91 days for new hires not using AI tools in an earlier six-company study. DX itself calls the metric "a narrow measure". Assumption: output climbs in a straight line from zero to full over that period, so half the salary paid during it buys nothing. That is $6,147 to $16,951.
Add both and the first year runs from about $192,000, with in-house recruiting, a 39-day vacancy and a 33-day ramp, to about $241,000 with an agency, 75 days and 91 days.
Four Hiring-Cost Numbers That Trace to No Study
While tracing the inputs I checked the figures most articles on this topic lead with. Four trace to no study I could find.
The Department of Labor's 30% of first-year earnings for a bad hire. I found no Labor Department document that says this, and the department's own site search returns nothing for "bad hiring decision". The earliest dated attribution I found is a 2014 trade article that cites "U.S. Department of Labor, 2003" with no title and no link.
SHRM's six to nine months of salary to replace an employee. The earliest attribution I found is an August 2013 blog post from a benefits company that credits "studies (such as SHMR)", typo included, and links nothing. A 2008 SHRM Foundation guide prints a range: direct replacement costs "as high as 50%-60% of an employee's annual salary" and total costs "ranging from 90% to 200% of annual salary". Six to nine months is not in it.
The $240,000 bad hire. A 2017 SHRM news article quotes an agency CEO saying that recruiting, hiring and onboarding a new employee "can be as much as $240,000". One person's upper bound, and not about bad hires.
Three to four times salary. One consultant's estimate, reported in the same 2022 SHRM article as the $4,700.
What does exist is more modest. Gallup estimates the cost of replacing a professional in a technical role at 80% of salary; the article does not show how the estimate was built. A Center for American Progress review of 30 case studies, published between 1992 and 2007, found a median turnover cost of 21% of salary outside executive and physician jobs. CareerBuilder's 2017 survey put the average loss on a bad hire at $14,900, employers' own estimates across industries in 2017.
What $171,251 Leaves Out
Equity, a laptop, software licenses, office space and the hours your engineers spend interviewing: I found no primary per-hire figure for any of them. Bonuses and state payroll taxes are priced above. None is in the total. The number is a floor, and it is a floor at the median. At the 75th percentile wage of $171,980, the same build gives a first year of $215,128.
It also covers one year. What it costs to do it again when the engineer leaves is a separate calculation.
The Hourly Rate to Compare Against
Spread over 2,080 paid hours, a $135,980 salary is $65.38 an hour. That is the tempting number to hold a contractor's rate against, and it is the wrong one. The employer's first-year cost is $171,251, which is $82.33 an hour, or $103.43 at the 75th percentile. A contracted engineer's rate already contains the recruiting, the taxes and the benefits.
Our engineers are senior, bill at $50 to $99 an hour all in, and join a client's team in 14 to 21 days. If the work will last for years and you can wait out the search, hire. If you need a senior engineer in your standup next month, compare the rate with $82.33, not $65.38, and look at team augmentation.