Software Development Hourly Rates

Software Development Hourly Rates

Software Development Hourly Rates To stay competitive in today’s marketplace, a company of all sizes is investing in software solutions to increase efficiency and productivity, launch new business units, and increase innovation.

But how much does custom software to develop and can your company afford it? Should you hire a freelancer or a local small software consultancy?

Or maybe you should take the “safe” route and hire one of the giants (No one ever got fired for hiring IBM, right ;). But can your business afford their sky-high hourly rates?

There’s a sea of options when hiring a software development company, and a lot of variabilities in pricing and terms, which is why we created the following guide to help you make the right choice.

What is the cost of software development?

The provided research aims at one of the most burning issues of our rapidly digitizing world, namely the prices of IT services.

To provide reliable data on the topic, we have gathered all the available information and combined it with our own knowledge of the IT engineering industry.

The Six Different Types Of Form Software Development Companies:

“Enterprise Class” Form Software Development Company

As the largest players in the market, Enterprise-Class consultancies generally have hundreds if not thousands of developers and consultants on staff and generally go with governments and company that can afford their sky-high rates.

Projects usually range in size from $500,000 – $100,000,000+.

Hourly rates are generally between $250 – $850 salary per Hr, depending on the experience level of the developer/consultant.

Given their premium price tag, you’d expect these types of companies to deliver superior results.

But they tend to use a “waterfall approach” to software development…

The waterfall approach is costly, takes a long time, and can be risky since the entire application is developed upfront with no user feedback. This greatly increases the risk of building the wrong app that users won’t adopt.

“Big Business Class” Software Development Companies

Big Business consultancies tend to activate with other large businesses that can’t quite afford the costs of the enterprise-class shops, but still, have big budgets.

They usually have between 100 – 1,000 developers, and several offices around the world.

hourly rate is not as expensive as the Enterprise Class, but they certainly aren’t cheap. You can expect to pay between $200 – $300 salary per hour for projects ranging in size from $125,000 – $5,000,000+.

These companies are generally well known and popular amongst software developers, so they tend to attract top talent, and build strong development teams.

“Mid-market Class” Software Development Companies

Mid-market consultancies tend to offer the best balance between money and quality.

They generally have between 10 – 100 employees and typically work with small and medium-sized businesses, as well as the occasional Fortune 500 company.

Hourly rate can expect to pay between $125 – $175 an hour for projects ranging in size from $50,000 – $5,000,000.

The right mid-market consultancy with a strong track record of success can be an excellent choice for the budget-conscious buyer looking for a good balance of quality and cost.

“Small Class” Software Development Companies

Small Class software development company tend to run very lean businesses with a handful of employees and low expenses.

They can have between 2 – 10 employees, including the owners of the company, and generally work with startups, local small businesses, and medium-sized regional businesses.

hourly rates can range from $75 – $175 an HR for projects ranging in size from $10,000 – $500,000.

Freelance Developers

If you have a small project that can be handled by an individual and doesn’t require a team effort to complete, hiring a freelance software developer can be an OK choice.

You can expect to pay $50 – $75 an hour for an inexperienced freelancer developer for projects ranging in size from $1,000 – $50,000.

Offshore Development Company

Offshore software development company come in many shapes and sizes, but most often they are large organizations with hundreds to thousands of developers spread across the globe.

rates can range from $25 – $50 an HR. Nearshore software development hourly tends to be slightly more expensive, with rates ranging from $40 – $75 an HR. Project size tends to range from $10,000 – $1M+ for both.

Building form software engineering is a great way to improve efficiency and innovation within your organization.

There are many choices when hiring software developers/freelance, and it’s important that you hire the right type of consultancy.

Here’s a quick summary of the different types of software consultancies, and their respective hourly rates and project expenses.


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