In-house team or outsourcing: what does it really cost?
Enter your team and horizon. See the full cost of hiring in-house, renting a vendor team by the month or buying a fixed-price build, as ranges, with every assumption visible and the month where one option overtakes another.
Build my team
This calculator does not say outsourcing is cheaper. For a steady long-term workload in-house is often cheaper over time; vendors usually win on speed, peaks and uncertain scope.
YuSMP is a vendor: we earn on two of the three options. Vendor rate corridors are market ranges from published 2026 sources by region, not our price list, which is why the in-house option here is complete, not a straw man.
Your team
Roles, grades and how many people. Up to 12 rows and 30 people.
For teams over 30 people, talk to us: the model here is built for up to 30. Get a proposal for your team
Where and how long
Advanced assumptions
Result
Cumulative cost by month
Show as a table
Assumptions behind these numbers
Every number the model uses, with its source and the date it was checked. Values marked as assumptions have no source yet: adjust them in your head or ask us why.
What the price does not show
Full breakdown
Cost breakdown (likely)
By role, per month at full load (likely)
Cumulative cost by quarter (likely)
What to ask before you decide
Get the full breakdown and PDF
Cost by item and by role, the cumulative table and the questions for your vendor and HR. We email the report as PDF.
How the calculation works
In-house. For each role: gross salary, employer taxes and social insurance, benefits, employer pension, office or home-office hardware, licences, plus a management, HR and legal overhead that grows with team size. One-off: recruiting (a yearly share of salary over an average tenure, paid when you hire) and onboarding at half productivity. Expected turnover adds replacements. People start after the hiring time for their grade; leave, holidays and sick days reduce productive hours.
Staff augmentation / dedicated team. Seats × vendor hourly rate × 160 hours a month. The rate is the regional corridor for a senior engineer, adjusted for role and grade. On top: coordination overhead that depends on the time-zone gap, your manager's time on the vendor team, and data transfer compliance when it applies. Ramp-up and vendor turnover do not raise the invoice; they lower productive hours.
Fixed price. The vendor prices the build-phase hours at 80% load, adds its management and a risk buffer inside the price; change requests depend on how clear the scope is. You still pay for acceptance and a product owner on your side, and for support after launch.
Ranges. Low uses every parameter at its low value, high at its high value. That is conservative: the real spread is narrower, but the model never mixes the best case of one input with the worst of another. The verdict uses the likely values.
Break-even. The first month from which cumulative in-house cost stays at or below the other option until the end of your horizon (searched up to 60 months).
Where the numbers come from
- Employer cost tables for the US, Germany, France and Italy
- Vendor rate corridors by region (senior engineer, USD/hour)
- Total cost formula: rate × hours + coordination + turnover + legal
- US software developer median pay $135,980 (BLS, May 2025)
- EUR/USD reference rate
What is not included
VAT and local taxes on services; your own management above the overhead share; the cost of delay (unless entered); stock options and bonuses; the vendor's tax regime; currency swings; freelancers and EOR; quality: vendors with the same rate differ by results, not by price.
FAQ
Is outsourcing really cheaper than hiring in-house?
It depends on the horizon, the load and how clear the scope is. For a steady team you keep for years, in-house often becomes cheaper after the hiring and onboarding costs are paid back. Vendors win when you need to start fast, scale for a peak or the scope is still moving. The calculator shows where that line falls for your team instead of a generic percentage.
What costs does the in-house number include?
Gross salaries, employer taxes and social insurance, benefits, employer pension, office or home-office hardware, licences and tooling, a management, HR and legal overhead, recruiting, onboarding at half productivity, replacing leavers and, if you release people after the build phase, severance. Leave, holidays and sick days reduce productive hours.
Where do the vendor rates come from?
From published 2026 rate corridors by region for a senior engineer (our cost benchmark article, the same data our Quote Review tool uses), adjusted by role and grade. They are market ranges, not YuSMP's price list.
What is the difference between staff augmentation, a dedicated team and fixed price?
With staff augmentation or a dedicated team you rent engineers by the month and direct their work; you pay for time and carry the scope risk. With fixed price the vendor commits to a defined result for an agreed price; the vendor carries delivery risk, and changes to the scope are billed as change requests.
What is the break-even month?
The first month from which the cumulative cost of the in-house team stays at or below the other option until the end of your horizon. Before it, the vendor is cheaper because you have not yet paid back hiring and onboarding.
Why are there ranges instead of one number?
Salaries, taxes, vendor rates and overheads vary. Low uses every parameter at its low value and high at its high value, so the range is wider than reality on purpose. The verdict uses the likely values.
Does the calculator include VAT, bonuses or freelancers?
No. All amounts are net of VAT; within the EU B2B services use reverse charge and input VAT is deductible. Bonuses, stock options, freelancers and employer-of-record services are not modelled. This is planning guidance, not tax or legal advice.
Can YuSMP give me a proposal for my team?
Yes. Send the team from the form on this page and we reply with options for staff augmentation, a dedicated team or a fixed-scope estimate. We sign your NDA first if needed.