2015/04/21 16:24:54

Cost value of a working hour of the programmer

Most developer companies face sooner or later that customers occasionally cannot estimate the job cost of the qualified programmers, so, and the final cost of services in software development.

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Economic case of cost of development of software components
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Economic case of cost of development of software components

Specialists of Mind conducted in the spring of 2015 a research within which they developed transparent and clear methodology of calculation of cost value of hour of the developer. The universal formula for calculation of this indicator looks as

Hour = ZP/36,

where ZP is an average salary of a development team (including the head), and number 36 – the calculated relation of cost value of hour of development to the salary of the specialist.

The main making cost values of development

At an o'clock of direct development hour of additional production costs is required.
Taxes are considered proceeding from current bid of the VAT and a preferential rate of social taxes for software developers – 14%.
Costs of time for support of the software product – error correction, refactoring, support of version control and introduction of little changes – make 30% of the capacity of production resources. Some companies do not include these costs in development. In this case the customer should pay for each correction or improvement of the code.
General economy, administrative and overheads in terms of an hour of development make about 20%.

It is possible to express a formula in a ruble equivalent, only operating with exact data on salary in the specific company. If to take as a basis data of the Superjob.ru portal that the Java programmer in Moscow receives in a month on average 120 thousand rubles, then cost value of hour of development of one specialist will make 3,342 rubles, including the VAT.

The developed methodology is universal and can be applied by any developer company, as proof of this fact Mind publishes complete calculations on the website and offers the following description of methodology with explanations.

Development cost accounting model

Development process includes the following items:

requirement analysis, design of opportunities of the software product;
design of architecture, documentation of interfaces of components;
development of documentation and plan of integration of software;
coding and assembly of components;
complex and stress testing of a product;
installation of the developed solution, qualification testing;
maintenance (refactoring, support of version control and so forth) – some companies do not include it in development, in that case the customer should pay in addition works on any correction of the code.

The cost structure on compensation considers:

the salary (including income tax);
bonus payments according to the results of work;
payments in social insurance fund and the pension fund at the preferential rate for software developer of 14%;
payment of the health insurance – 1% of salary;
power supply compensation – 2% of salary.

The number of the working days of the employee a month averages 18.9 – the indicator is received by method of division of a total quantity of the working days in a year (without a holiday) on 12.

Employees who are engaged in testing are involved in product development, implementation and design, their average market salaries are 50% of the salary of the developer (group of testers), 75% (group of designers) and 100% (group of implementation). At the same time developers and testers spend directly for software development on average 5.6 hours a day, they spend the rest of the time on maintenance of a product - it is about 30% of working time.

The provided data allowed to calculate costs of the company for compensation of the employee in terms of an hour of development (table 1).

Cost calculation on compensation of a working hour of the employee

High qualification of employees (in this example researchers considered competitive specialists) involves a certain cost level on their contents and administration. For these reasons the methodology included general economy and administrative costs. Mind calculated this item of expenditure, based on expenditure for the semi-annual period. The actual expenditure were separated into the number of production personnel and expressed as a percentage concerning the salary of the developer – 20% turned out.

For ensuring work of the developer within an hour the designer should spend on average 20 minutes for design of requirements, the tester – half an hour for testing, 15 more minutes in general leaves on stress testing, implementation and writing of technical documentation. Therefore, at an o'clock of direct development hour of additional costs is required. Costs of the company for an hour development taking into account these data are presented in table 2 (the salary of the technical writer – same, as at the tester is considered).

Calculation of cost of hour of development

Number 35.9 for convenience was rounded to 36 (admissible error in this case), respectively the final formula represents Hour = ZP/36.

In conclusion it should be noted that it is impossible to deliver equality sign between cost value of hour of development and its cost for the customer as each company has the right to calculate standards of profitability independently. For customers the developed formula can serve as a reference point, but first of all it is designed to help developer companies.