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A November 6, 2026, analysis calculates the employer cost of a developer’s hours actually worked and offers a formula for comparing that cost with an outside specialist’s hourly rate. Its estimates are about $95 per hour for a median-wage US software developer and €58.50 for an hour worked in Germany’s information and communication sector; utilization can substantially change the comparison.
Thorsten Meyer AI published a cost comparison on November 6, 2026, estimating what employers pay for a developer’s hour actually worked in the United States and Germany. The report uses public labor data to derive a break-even hourly rate for comparing a full-time hire with an outside specialist, while stressing that the answer depends on how much work the employee would have.
For the United States, the report combines the Bureau of Labor Statistics’ $135,980 median annual wage for software developers in May 2025 with employer-cost data from June 2026. It applies a 1.28 cost factor and estimates about 1,830 hours actually worked in a year after accounting for paid leave. On that basis, it calculates an employer cost of about $95 per hour worked. This is the report’s calculation from separate BLS figures, not a published BLS software-developer hourly rate.
The report also cites BLS data showing that private-industry employers paid an average of $46.89 per hour worked in June 2026, including wages and benefits. For management, professional and related occupations, the figure was $78.88, including $54.06 in wages. The report uses that occupational group’s employer-cost ratio to estimate the developer cost.
For Germany, the analysis cites Destatis data reporting €29 in non-wage labor costs per €100 of gross pay in 2025 and an average employer cost of €58.50 per hour worked in the information and communication sector. That sector figure covers all jobs in the sector, not developers alone. The report says recruiting costs have a smaller effect in its comparison: SHRM’s 2025 benchmark lists an average non-executive cost per hire of $5,475, which the analysis spreads across a year of work to estimate roughly $3 per hour.
When Augmentation Costs Less Than a Full-Time Hire
Compare the employer cost of useful work with specialist quotes. The result depends heavily on workload utilization.
How Utilization Changes the Cost
The key decision is whether the employee would have enough ongoing work. The report’s illustrative US calculation puts the break-even rate at about $98 per hour when a hire is fully utilized, including its estimate of recruiting cost. At 50% utilization, the estimated break-even rises to about $197 per useful hour, because the employer is paying for capacity that is not being used.
That changes the comparison between a project and a permanent role. An outside specialist may be less costly for short assignments, uncertain workloads or skills needed only briefly. A full-time hire may compare more favorably when work is steady and fills the employee’s time. The report also identifies retaining in-house knowledge as a factor that can matter even when the hourly calculation favors outsourcing.
These figures are decision inputs, not quotes or universal prices. The report does not provide agency rates, saying published surveys with a clear method were not available to its author. Employers need to compare the calculation with actual proposals and their own assumptions about workload.
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The Public Data Behind the Estimate
The analysis is designed as a repeatable calculation rather than a survey of providers. Its central comparison is the cost per hour of real work, rather than salary alone. Employer-paid benefits and paid leave raise the cost above wages; unused capacity raises the cost of each productive hour further.
The cited inputs cover different dates and populations. The US wage figure is the software-developer median for May 2025, while the employer-cost figures are from June 2026. The German hourly amount is a 2025 average for an entire economic sector. These data allow a rough benchmark, but the report’s calculations do not establish that a particular company’s employee or contractor will cost those amounts.
The report also discusses AI coding tools, but says evidence about how much faster they make developers remains unsettled. It argues that AI may create demand for short, specialized projects while also giving employers another reason to retain knowledge internally. Those are considerations in the report, not measured findings in the cost data.
“A salary is not the cost.”
— Thorsten Meyer AI report
Where the Comparison Has Limits
The estimates do not answer what a specific company will pay for a full-time developer or an outside specialist. Actual costs depend on compensation, benefits, location, recruiting costs, contract terms and the amount of productive work available. The report supplies no provider-rate survey, and its $95 US estimate is derived from wage and employer-cost data rather than directly measured for software developers.
The German €58.50 figure applies to the information and communication sector as a whole, so it may not reflect developer costs. The report’s AI productivity discussion also remains uncertain: it does not quantify productivity gains or show how they would change the break-even calculation. The figures are historical inputs, not guarantees of future costs, and the article says it is not legal, tax or financial advice.
Apply the Formula to Real Quotes
The next step for a business considering a hire is to estimate annual compensation and employer costs, the hours the person would actually work, recruiting costs and expected utilization. It can then compare the resulting cost per useful hour with current specialist quotes for the same work and period.
The report does not announce a follow-up study or a later milestone. The comparison remains specific to each employer’s figures; any future change in wages, benefits, utilization or AI productivity would require updating the inputs.
Key Questions
What is the estimated US cost per hour for a software developer?
The report calculates about $95 per hour actually worked using the BLS May 2025 median software-developer wage, June 2026 employer-cost data and an estimated 1,830 hours worked annually. It is the report’s calculation, not a published BLS rate.
Why does utilization affect the break-even rate?
A full-time employee’s cost is spread across the hours of work they produce. If only half their available time is used for the work being evaluated, the report estimates that the break-even rate rises from about $98 to about $197 per useful hour.
Does the report say staff augmentation is always cheaper?
No. It says augmentation may suit short, uncertain or specialist assignments, while hiring may compare better for sustained core work that keeps someone busy. The result depends on the employer’s workload and actual costs.
Are the German and US figures directly comparable?
They are benchmarks drawn from different data. The US estimate combines a software-developer median wage with employer-cost data for a broader occupational group. The German €58.50 hourly figure covers all jobs in the information and communication sector, not developers alone.
Does the analysis include current contractor or agency rates?
No. It provides no provider rates, saying it found no published rate survey with a clear method. Readers are meant to compare the formula with quotes for their own work.
Source: Thorsten Meyer AI
