When teams compare a contractor's monthly rate against a salary, the salary usually looks cheaper. That comparison is wrong on both sides, and since we place engineers on contract for a living, it's worth showing the honest version of the math — including the cases where hiring full-time is the right call.
What a full-time senior engineer actually costs
Take a senior engineer in the US or Western Europe with a headline salary somewhere around $150–200k. The real number is bigger:
Employment overhead. Payroll taxes, health insurance, pension contributions, equipment, software seats, office or stipend. Finance teams typically model fully-loaded cost at 1.25–1.4× salary. Your $180k engineer costs the company roughly $230–250k a year before they write a line of code.
Recruiting. An agency fee runs 20–25% of first-year salary — $35–45k for one hire. Do it with an internal recruiter and you're paying their salary plus your engineers' interviewing hours, which are real hours that stopped producing software.
