Freelancing Mythbusters: The Real Cost of Working with a Freelance Developer

IT companies have mixed emotions when it comes to working with freelance developers. On the one hand, freelancers are alleged to offer a cost-effective collaboration, but can their quality be trusted on the other?

While the internet is flooded with many articles trying to answer these questions, only a few of them will give you a solid, quantitative answer. To save you frustration and confusion, we have conducted detailed research revealing the cost of hiring an in-house software developer vs. a freelancer software developer across experience levels and tech stacks in 2023. Let’s dive in.

Methodology

For this research, we primarily sourced information from PayScale, Glassdoor, SalaryExpert, FreelancerMap, Statista, Upwork, and SkillValue. The annual pay of software developers varies based on a couple of factors. For one, devs in specific regions—for example, most Western countries—charge more than their colleagues in developing countries. The level of experience also plays a role.  

However, the most significant cost-based factor is the nature of employment; in-house vs. freelance. Aside from their net salaries, full-time senior developers are entitled to other benefits and bonuses. On the other hand, freelancers only charge a base hourly/project rate with no additions. 

The total annual salary for in-house developers: 

Due to the sparse information on the extensive company-paid benefits in some countries, we’ll focus on the base salary plus cash benefits only to generate the total annual pay. All salaries have been converted to USD. 

Freelance pricing model:

How do freelancers get paid? The quick answer is by an hourly rate. But that’s not all. According to Freelancermap, IT freelancers spend an average of 43 hours per week, which is 2,236 hours per yr. However, this does not accurately reflect the time spent on clients’ work rather than sourcing for jobs and overall business tasks. To better estimate time-on-work, experts suggest allocating 60% of the total work hours to billable time. 

2,236 hours x 60% = approximately 1342/yearly billable hours.

This figure will be our average freelancer work hours baseline.

With these details in mind, let’s look at the cost of hiring freelancers and in-house software developers across experience levels by region based on the SkillValue top 44 countries with highly skilled developers.

Software developer salary in the world across experience levels in 2023

North America

Selected countries: The United States, Canada

Developers in this region charge relatively higher than others. As such, finding a specialist who would deliver high-quality work without stretching your budget will be a big win. Freelancer fees in the region range from $15 — $100/hr. But here’s what it takes to hire full-time and freelance developers in North America.

United States

The US is at the forefront of the tech talent shortage, driving up salaries. According to PayScale, junior developers earn between $49k – $101k, including benefits and bonuses. Freelance rates for juniors start from $16/hr. This places the United States as the highest-paid country for software developers in North America. Let’s break it down by years of experience.

Freelance vs. in-house software developer salary in the US by experience 

Canada

Here, junior, mid-level, and senior in-house developers earn from $35k, $45k, and $48k, respectively, upwards in annual salary, while freelancers are paid from $17k, $21k, and $26k in the same order.

Freelance vs. in-house software developer Salary in Canada by experience

Latin America

Selected countries: Brazil, Colombia, Mexico

In this region, hiring freelance app developers will cost less than having an in-house employee in North America. This makes freelancers an excellent choice for tech companies looking for qualified developers in the Americas at affordable rates. According to SkillValue, Mexico and Brazil are the top countries to find skilled developers in this region. Another country worth mentioning is Colombia, which Statista highlighted as an emerging outsourcing location.

Colombia

In-house early career and mid-level devs earn as high as $25,898/yr, and $32,384/yr, respectively. The yearly salary of seniors is slightly lower, between $4,666 – $18,144. Junior and middle freelancers charge an average of $3,154/yr and $20,801/yr each. Glassdoor estimates that the base average salary for a senior dev without bonuses is $1814/month. This sums up to $21,768 per year.

Freelance vs. in-house software developer salary in Colombia by experience 

Brazil

Full-time junior software devs earn as high as $20,073, mid-levelers $26,578, and experts $40,908 yearly. Fees of experienced freelance programmers start from $7.2 – $18.9 per hour. The rates of other levels are below. 

Freelance vs. in-house software developer salary in Brazil by experience 

Mexico

According to Glassdoor estimates, the average base pay for a senior developer without cash benefits is $28,773/yr. A similar in-house position costs as high as $40,580/yr, according to PayScale. Other experience levels are below.

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Freelance vs. in-house software developer salary in Mexico by experience 

Western and Northern Europe

Selected countries: The United Kingdom, Sweden, Germany

Based on SkillValue research, the top countries to find top developer talents in these regions include; Sweden, the United Kingdom, Belgium, Germany, Switzerland, Netherlands, Ireland, and France. Below is the average cost of hiring a software developer in Western and Northern Europe, according to PayScale.

The United Kingdom

In-house senior developers earn as much as $107,819, mid-levelers; $83,248, and juniors; $62,791 yearly. Freelancers can earn between $25,498 – $88,572/yr across levels. We’ve broken down the freelancer costs and those of fully employed devs below.

Freelance vs. in-house software developer salary in the UK by experience 

Sweden

Full-time senior software developers in Sweden earn from $6,148 – $85,736/yr, while the average fee charged by freelancers of the same level is $68,442. The yearly salaries of in-house junior and mid-career developers are; $4,327 – $67,518 and $35,182 – $70,137, respectively. Freelance rates for these two levels are $28,987 and $60,658 in the same order.   

Freelance vs. in-house software developer salary in Sweden by eperience 

Germany 

According to PayScale, the total yearly pay of early career, mid-level, and experienced in-house devs are between $41,032 – $72,688/yr, $50,413 – $85,584/yr, and $/$53,930 – $94,970/yr, respectively. Freelance developers with varying years of experience earn from $24,156 to $77,836. We’ve provided more information on each experience level in the table.

Freelance vs. in-house software developer salary in Germany by experience 

Southern Europe 

Selected countries: Spain, Bulgaria, Portugal

Although parts of Southern Europe are also experiencing an IT talent shortage due to disruptions from the COVID-19 pandemic, several countries in this region have skilled developers. This includes Albania, Serbia, Bulgaria, Portugal, Spain, Romania, Italy, Greece, Armenia, and Andorra. So what do software developers earn in this region? And how much do freelancers charge?

Spain

The hourly rate of a junior freelancer is between $11 and $17.5. Factoring in the billable hours, this sums up to $14,762 – $23,485/yr. The equivalent for an in-house dev within that level is between $19,925 – $46,883/yr. According to PayScale, the base salary of a senior developer is between $26,950 – $58,595/yr with no cash bonus and $26,950 – $60,948/yr for in-house experts (with additional cash earnings). More details are available below.

Freelance vs. in-house software developer salary in Spain by experience 

Bulgaria 

The average hourly rate of a senior freelance software developer in Spain is $18, totaling $24,156 in annual earnings. An in-house dev in a similar position takes about $27,569- $50,943/yr. Mid-level freelancers’ pay is about $16,104/yr while that of juniors caps at $27,377/yr. Hiring a full-time developer in these two levels costs nearly twice as high.

Freelance vs. in-house software developer salary in Bulgaria by experience 

Portugal

Getting a freelance app developer will cost an average of $69,784/yr for senior devs, mid-career $25,498/yr, and juniors $12,078/yr. In-house senior developers earn up to $66,864/yr, mid-levelers $58,650/yr, and juniors $37,536yr.

Freelance vs. in-house software developer salary in Portugal by experience 

Eastern and Central Europe

With countries like Ukraine and Poland leading the way, this region is fast becoming a location of choice for hiring IT specialists. Other countries with skilled talents in this area are Hungary, the Czech Republic, Moldova, Slovakia, and Austria. 

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Ukraine

With its young and pulsing IT market with high competition, European work values, and a rich assortment of skills, languages, and frameworks to choose from, Ukraine has become one of the acknowledged leaders in freelance, remote, and onsite hiring of talented IT engineers. Hiring a remote mid-level Ukrainian developer can cost you from $36K per year — however, if Upwork or Freelancer is your cup of tea, the variants can be more abundant and cheap (one-time freelancers cost around $10-15 per hour).

Asia

Selected countries: India, Turkey

Considering China and India, the Asian IT labor market is very mature. SkillValue’s research identified other emerging markets in this region; Vietnam, Turkey, Afghanistan, and the Philippines. The cost of hiring a software developer in this region is as follows, according to PayScale. 

India

The average rate of a junior freelance software developer in India is $6.4 per hour, amounting to $8,589 in annual pay. Hiring an in-house dev in a similar position takes about $2,968 – $13,491/yr. Mid-career freelancers charge $9,394/yr, while seniors charge about $17,446/yr. Hiring a full-time developer in these two levels costs $6,525 – $26,981/yr and $8,094 – $40,472, respectively.

Freelance vs. in-house software developer salary in India by experience 

Turkey

According to SalaryExpert, the average base salary of a senior dev is $13,746/yr. This represents the cost of hiring a freelance expert. Coupled with a yearly bonus, it totals $17,255 for an in-house experienced developer. Other experience levels are represented below.

Freelance vs. in-house software developer salary in Turkey by experience 

MENA

Selected countries: Egypt

Often overlooked, some Middle East/Northern African countries have made remarkable progress to earn a spot on the top 44 places to find competent developers. They include Madagascar, Tunisia, Algeria, Israel, and Egypt.

Egypt 

By PayScale estimates, early-career software devs earn as high as $8,537/yr and mid-levelers $15,798/yr. The freelance payment for these two levels is up to $8,725/yr and $15,798 in the same order. According to SalaryExpert, senior devs’ average base salary (without bonuses) is $15,905. A bonus of $563 sums up to $16,468 for in-house experts.

Freelance vs. in-house software developer salary in Egypt by experience 

Australia

According to PayScale, full-time senior software developers in Australia earn a total salary of  $50,479 – $95,189/yr. The yearly salaries of in-house junior and mid-career devs are as high as $64,898 and $85,088, respectively. So, how much do freelance web developers make? Experts earn from $29,524 – $80,520/y at an hourly rate of  $22 – $60. The junior and middle-level rates are $21,472 – $46,970/y, and $24,156 – $60,390/y, respectively.

Freelance vs. in-house software developer salary in Australia by experience 

Highest-paying programming languages for software developers in the world in 2023

The United States of America

Programming languages that are associated with the highest salaries in the United States as of 2023

According to Statista, Scala is the highest-paying coding language at $150,000/yr. In contrast, the freelance fee for this skill is $70,871/yr. The salary of developers skilled in the other top four languages are as follows:

Vietnam

The five programming languages with the highest pay in this Statista survey are TensorFlow, Kubernetes, Go, C++, and React.js. The fees for TensorFlow programmers start from $10/hr. But it can also go as high as $100, amounting to $134,000 yearly. Whereas in-house TensorFlow programmers earn lower at an average of $19,716/yr.   We’ve broken down the rates of each language in the table below. 

Poland 

In Poland, the programming languages with the highest salaries are Scala, Java, C, Kotlin, and C#. Fully employed Scala developers in Poland earn an average of $64,668 yearly. According to Payscale, the average hourly rate of Scala programmers is $26.82, making it $35,992 yearly. Here are the freelance rates and average maximum salary of programmers in the other languages:

What is the actual cost of working with a freelance developer?

Although fees vary by region and experience, hiring a freelancer is still lower than filling an in-house position across skill levels. For instance, a fully employed, experienced developer in the United States earns as high as $137,000/yr, while a freelance senior software developer may charge $100,650/yr at most. The latter saves you nearly 27%. 

Also, an in-house employee would require health insurance, training tax, legally required benefits, unlimited coffee or beverages, fringe benefits, and other indirect costs. With these additional costs in consideration, working with freelancers is the most cost-efficient option for your business. 

Are you looking for freelance developers but unsure if you’ll get your money’s worth? Hire at Lemon.io. We have a pool of vetted professionals that earn based on their performance. This way, you’ll find a specialist at an affordable rate without compromising on quality. Contact us today, and let Lemon connect you with a skilled developer. 

Here's a FAQ for those who care!

• Is it better to get paid hourly or by the project?

  If your work is project-based, it may make more sense to get paid by the project, as this will allow you to focus on completing the project rather than tracking your hours. On the other hand, if your work involves ongoing tasks that are not tied to a specific project, it may make more sense to get paid hourly.
  

• How to communicate in different time zones?

  If your company functions with no stable office, if your clients live abroad, if your boss works from afar, you will have to tackle the time zone problems. How to communicate with people who go to bed right after you get up from it? The best piece of advice we’ve heard is about arranging overlap calls and distant meetings. Choose a time slot when all your collaborators and colleagues are still awake, and reschedule the most important issues.

• How much do freelance web developers make?

  The earnings of freelance web developers can vary widely depending on a variety of factors such as their location, level of experience, and the type of work they do. According to data from the Bureau of Labor Statistics, the median hourly wage for web developers in the United States was $30.55 as of May 2020. However, this figure includes both full-time and freelance web developers, and the earnings of freelance web developers may be higher or lower depending on their specific circumstances.

• What is the difference between bill rate and pay rate?

  Bill rate and pay rate are terms often used in the context of freelance or contract work. The bill rate is the amount that a client is charged for the services of a freelancer or contractor, while the pay rate is the amount that the freelancer or contractor is paid for their work.