The cost of hiring a software developer in the UK — and what a retainer buys instead.

The moment it comes up

"We should just hire a developer."

Every growing firm gets there. The workaround pile is taller than the work: the spreadsheet only one person understands, the re-keying between systems that don't talk, the reports rebuilt by hand every Monday. Someone senior finally says it — we should just hire someone to sort all this.

It's not a silly idea. For some firms it's the right one, and we list them below. But price it properly first, because the advertised salary isn't the number that hits your payroll — and one salary doesn't buy what most people quietly assume it buys.

The sum, from parts you can check

Year one of a median hire, in full.

No survey of "typical costs", no recruiter's brochure — the official numbers, added up. The salary is the ONS median for programmers and software development professionals; the on-costs are the current statutory rates:

What's deliberately not in the sum: kit, software licences, desk or remote setup, training, management time, and cover for the 5–6 weeks a year any employee is rightly on leave — all real, all additive. The salary is held flat, and a median means half the workforce earns more. The CIPD figure is an economy-wide median, not developer-specific — its own report cautions that estimates vary widely — so we use it as the floor. Full sources below.

The contractor route prices the same attention differently: ITJobsWatch puts the median contract rate for a software developer at £513 a day (six months to 13 July 2026) — about £113,000 for a 220-day year, with no notice period owed to you and no continuity when the contract ends. Still one person; now a dearer one.

The other way to buy it

Pay for output, not attendance.

The retainer buys the thing you actually wanted from the hire — software that removes the workaround pile — without buying a seat. A flat month: £2,500 (Keep), £3,950 (Build) or £6,500 (Partner), published in full, three-month minimum, 30 days' notice, and you own the code and data from day one. It starts with a one-week Discovery Sprint (£1,500, credited to month one), then the smallest module that removes your worst pain, live in weeks — then the next.

The mechanism deserves naming plainly: AI-assisted development. One senior builder — fifteen-plus years of shipped systems across child protection, recruitment, sales and accountancy — uses AI to do the volume work, with every output checked deterministically, and ships across all of those disciplines at once: screens, integrations, servers, reports. That's why the price can sit below a single median salary. The most recent build ran two years on exactly this model and replaced five subscriptions with one platform running ~80 automated jobs a night — the case study shows it in full.

Figure 1. Per month, like for like. Keep and Build sit under a median hire's payroll; Partner sits above it — deliberately. Partner is the tier for firms buying team-pace output across every discipline, not payroll arbitrage. The hire's bar is payroll only; recruitment, kit and cover would widen it.

Figure 2. Three years, both ways. Both retainer lines include the building, the changes and the running of the system; the hire line is what the seat costs before it produces anything. Sources in the block below.

The other side of the ledger

When hiring is the right call.

A comparison you can trust has to cut both ways. Hire — properly, at market rate — when:

• Software is your product. If code is what you sell, developers are your production line, not your overhead. Hire, and keep hiring.
• The backlog genuinely fills a year, every year. If you have a real product roadmap and 220 days of development work annually — not a burst of it — a dedicated seat earns its keep.
• You're building an in-house team around a product owner. At programme scale (the £1m+ case from our agency-build comparison), you want employed engineers who hold the context for years. That's a team, and it starts with hires.

If that's you, the arithmetic above is still useful — the median is the market telling you what good costs, so budget past it rather than under it. If your development need arrives in bursts and the real goal is operations that run themselves, keep reading: that's the firm the retainer was designed for.

Where this goes next

• The pricing, in full → — because almost nobody in this market publishes prices, and we do.
• The agency build, summed the same way → — £134,000–£417,000 at published day rates, and when a big build is right.
• How the module ladder works → — because the method is the reason one builder ships at team pace.