Last updated: October 23, 2026
By Robert Ardell, Co-Founder and Strategic Advisor, KORE1
A contract team of two mid-level software engineers and one mid-level QA tester costs about $51,700 a month, or $155,200 for three months, at national medians in the KORE1 Contract Rate Index 2026-Q4. Add a project manager and a third engineer and three months runs about $253,500. Every figure is billed hourly at 40 hours a week, as of October 16, 2026.
Search this question and most of what comes back is vendor pricing pages. They quote $7,200 to $10,000 a month per “US-facing” engineer. Read the fine print. Those are offshore developers on a US time zone, sold by the month. Fine product. Wrong comparison.
A US-based W2 contract software engineer is a different purchase. At the mid-level national median of $108 an hour, one seat bills about $18,700 a month. Not $9,000. If your budget came from one of those pages, it’s short by half before the first standup. Ouch.
So this page prices whole teams, not single developers, because that’s how a build actually gets staffed. Three common team shapes. Each one is summed seat by seat from index cells, with monthly, three-month, and six-month totals and the metro swing between San Francisco and Dallas-Fort Worth. It’s the budget side of software development staff augmentation, written for the engineering leader and the CFO who both have to sign the same number.
One disclosure. I co-founded KORE1 in 2005 and we bill for exactly this kind of team, so treat the medians as a budget anchor rather than a quote. Where a different setup would serve you better, I’ll say so. Fair warning.
How Much Does a Contract Development Team Cost per Month?
A contract development team is a group of software engineers, testers, and coordinators who work inside your engineering process, on your repositories and your sprint board, for a fixed stretch of time. You direct the work. The staffing firm employs each person on W2, runs payroll every week, and bills you hourly for the hours they log.
Three shapes cover most of the requests we see. Small, middle, big. The small one is a pair of engineers with a tester, the kind of team that finishes a feature set, a payments integration, or a mobile release that an internal team started and then got pulled off of. The middle one adds a project manager and a third engineer, which is the usual answer when the work spans more than one system and somebody has to keep the dependencies, the release calendar, and the stakeholders lined up. The big one puts a senior lead over four engineers with a systems engineer on deployments and infrastructure.
| Team shape | Seats | Per month | 3 months | 6 months |
|---|---|---|---|---|
| Two engineers plus QA | 3: two mid-level software engineers, one mid-level QA tester | $51,700 | $155,200 | $310,400 |
| PM, three engineers plus QA | 5: one mid-level project manager, three mid-level software engineers, one mid-level QA tester | $84,500 | $253,500 | $507,000 |
| Senior lead, four engineers plus systems engineer | 6: one senior software engineer, four mid-level software engineers, one mid-level systems engineer | $111,200 | $333,600 | $667,200 |
Source: KORE1 Contract Rate Index 2026-Q4, effective October 16, 2026, U.S. national medians. Team totals are the sum of each seat’s index cell. Three months assumes 520 hours (13 weeks at 40 hours); per month is the three-month total divided by three.
The jump from the small team to the middle one is $32,800 a month for two more seats. The jump to the big one is another $26,700 for one more seat, because the senior lead bills $131 an hour at the median and the systems seat replaces the PM. Seniority costs more than headcount.
Hourly billing means a team that finishes in ten weeks costs ten weeks. The small team runs about $11,900 a week, so a two-week overrun is a line you can actually price ahead of time, in the same meeting where you approve the team, instead of finding it on a surprise invoice.
Why Do Online Per-Developer Prices Look So Much Lower?
Because they’re usually pricing a different country. Simple as that. The monthly figures on most vendor pages come from offshore delivery centers, billed per developer per month, with the vendor’s own management layer included or not depending on the page.
Nothing wrong with that model. Really. It’s a real option, and for some work it’s the right one. It just isn’t the same seat. A W2 contractor in Austin or Irvine carries US payroll taxes, workers’ compensation, and state sick-leave rules, and sits in your Slack during your hours with no overnight handoff. That’s what the index prices.
Run the comparison honestly. One mid-level W2 engineer at $18,700 a month against an offshore developer at $5,000 a month isn’t a 73% discount on the same thing. It’s a different trade, with different time zones, different management overhead, and a different exposure if the code walks out the door. I’ve watched a few buyers learn that halfway through a build, usually around the second sprint review, when the time-zone gap and the rework queue start costing more than the rate ever saved them. Expensive lesson. Our staff augmentation pricing models guide lays out per-hour, per-month, and dedicated-team pricing side by side.
What Does Each Seat Bill per Hour?
Five cells build every team on this page. All are national, all are W2 contract bill rates, and all are what you’d see on the invoice, not what the contractor takes home.
| Seat | Level | Bill rate range | Median | Per month | 3 months |
|---|---|---|---|---|---|
| Software engineer | Senior | $118 to $142 | $131 | $22,800 | $68,300 |
| Software engineer | Mid | $96 to $122 | $108 | $18,700 | $56,100 |
| QA tester | Mid | $73 to $94 | $83 | $14,300 | $43,000 |
| Project manager | Mid | $72 to $93 | $81 | $14,100 | $42,200 |
| Systems engineer (stands in for DevOps) | Mid | $70 to $90 | $79 | $13,600 | $40,900 |
Source: KORE1 Contract Rate Index 2026-Q4, modeled cells. Base wages come from BLS Occupational Employment and Wage Statistics, May 2025 for Software Developers (15-1252), Software Quality Assurance Analysts and Testers (15-1253), Project Management Specialists (13-1082), and Network and Computer Systems Administrators (15-1244), plus a 24% employer burden and KORE1’s observed bill-to-cost bands.
About that last row. It needs a caveat. The index has no DevOps cell, so the systems engineer seat is a stand-in, priced on the systems administrator occupation. It fits a team that needs somebody to own the CI pipeline in GitHub Actions or Jenkins, the staging environment, the release scripts, and the AWS or Azure accounts that everything deploys into. It does not fit a senior platform engineer who writes Terraform modules and runs Kubernetes clusters for a living. That person bills closer to the senior software engineer row, so budget there if that’s who you mean. Our DevOps staff augmentation page covers that seat on its own.
Now our own numbers. KORE1’s software engineer placements (n=16, with 2023 to 2026 starts, most of them in Southern California) bill $91 to $120 an hour, median $105, three dollars under the national mid-level model. Our project manager placements (n=21) bill a median $116, well over the modeled $81, which tracks with what clients usually ask us for when a contract team needs a PM at all. Technical program managers on integration and ERP work, not meeting schedulers. If your PM seat has to own a cutover plan, use the higher number.
QA is the seat buyers drop first. Don’t. Seriously. A $14,300 tester catches the defect before it costs a mid-level engineer two days of rework, and two days of that engineer is about $1,700. Somebody is going to test the release. If it isn’t a tester, it’s your most expensive developer doing it badly. If you want to staff that seat on its own, see QA staff augmentation.
How Much Does the Metro Move a Team Budget?
More than the team size does, sometimes. A lot more. Here are the same three shapes priced in the San Francisco Bay Area and in Dallas-Fort Worth, with every seat swapped to the local cell.
| Team shape | Metro | Per month | 3 months | 6 months |
|---|---|---|---|---|
| Two engineers plus QA | U.S. national | $51,700 | $155,200 | $310,400 |
| Two engineers plus QA | San Francisco Bay Area | $67,900 | $203,700 | $407,500 |
| Two engineers plus QA | Dallas-Fort Worth | $50,900 | $152,600 | $305,100 |
| PM, three engineers plus QA | U.S. national | $84,500 | $253,500 | $507,000 |
| PM, three engineers plus QA | San Francisco Bay Area | $111,200 | $333,500 | $667,100 |
| PM, three engineers plus QA | Dallas-Fort Worth | $82,800 | $248,400 | $496,700 |
| Senior lead, four engineers plus systems engineer | U.S. national | $111,200 | $333,600 | $667,200 |
| Senior lead, four engineers plus systems engineer | San Francisco Bay Area | $145,200 | $435,700 | $871,400 |
| Senior lead, four engineers plus systems engineer | Dallas-Fort Worth | $109,400 | $328,200 | $656,500 |
Source: KORE1 Contract Rate Index 2026-Q4, modeled from BLS OEWS May 2025 metro wages. Bay Area cells: software engineer mid median $143 and senior $165, QA tester mid $107, project manager mid $107, systems engineer mid $103. Dallas-Fort Worth cells (incl. Plano, Irving, and Frisco): software engineer mid $106 and senior $126, QA tester mid $82, project manager mid $78, systems engineer mid $82.
Look at the middle row for the Bay Area. Five people in San Francisco, San Jose, or Palo Alto cost $333,500 for the quarter. Six people at national medians cost $333,600. A hundred dollars apart. Same money. Put differently, the Bay Area takes a whole seat out of the same budget.
Dallas-Fort Worth runs a little under national on almost every seat, about 2% on the middle team. Plano, Irving, and Frisco host a lot of large enterprise engineering offices, so the developer bench is deep, contractors rotate between enterprise projects often, and the rates reflect all of that supply.
Most teams aren’t all in one place anyway. Where does your senior lead sit? Start there. Price that seat local and the rest national if the engineers are remote. For Seattle, Atlanta, Orange County, and the rest, check IT contractor rates by city. The Seattle seats are itemized on Seattle software engineer contract rates.
Price your team shape. Give us the seat list, the levels, the city, a start date, and how many weeks, and we’ll come back with a team total built from these same cells, seat by seat. Price your team with KORE1.
What Sits Inside a Contract Bill Rate?
Devin Hornick, a Partner at KORE1, teaches this one with a round number. It works. Start with $100 an hour of pay. Add 24% for employer burden and the firm is already at $124 an hour in cost, with no margin yet, and Devin puts the resulting bill rate somewhere around $150 to $160. Simple math. His summary is blunt. “First off, it’s not a markup. Secondly, there’s a margin in there. And thirdly, there’s a bunch of other costs that you’re not thinking of.”
The 24% is mostly employer payroll tax and insurance. IRS Publication 15 for 2026 puts the employer share of Social Security at 6.2% on wages up to $184,500 and Medicare at 1.45% with no cap. Federal and state unemployment, workers’ compensation, liability coverage, and state-mandated sick pay sit on top of that. The contractor burden rate page itemizes it.
Why does it matter for a team budget? Burden often gets left out of a quoted markup, so ask any firm whether its percentage sits on the pay rate or on the loaded cost. Over five seats and six months, that difference is real money. I wrote up the full side-by-side in how to compare staffing agency quotes line by line, and I won’t repeat it here. Compare the all-in hourly bill rate. Nothing else lines up across firms.
Do You Need an Hourly Team or a Fixed-Price Project?
Different products. People mix them up all the time. Constantly, actually.
A contract team bills time and materials. You own the backlog, you run the standups, you decide when the work is done, and you pay for the hours logged. Devin says it plainly. “Hourly, which we prefer. It’s really more of a staffing model to do the hourly billing and you manage the person.” That’s what every number on this page assumes.
A fixed-price project is a consulting engagement. The firm owns the outcome, writes the spec, carries the delivery risk, and prices that risk into the bid. Staffing firms like ours don’t sell it, and if you need someone else to own the result, a consulting group is the right call, not a staffing firm. If you’d rather keep control of the roadmap and the people, hourly is usually cheaper, because nobody is padding a bid with contingency for risk that you’d end up carrying anyway when the requirements change in month two.
Hourly doesn’t mean open-ended. Review the burn every two weeks against the budget you approved, the same way you’d review velocity. The small team’s $11,900 a week makes that check easy to run, and if the scope grows, you’ll see it in the hours long before it shows up on a quarterly report.
How Long Do Development Contracts Usually Run?
Across 410 ended IT assignments at KORE1, the median ran 136 days. A little over four months. Not three. So a three-month build that slips a few weeks is ordinary, and a six-month budget is the safer place to start if the scope still has question marks in it.
How the money gets approved tends to decide the length more than the code does. Devin put it this way in an email to our team. “Companies may not approve three or four permanent hires, but they may absolutely approve the resources or project team necessary to complete a $300K or $500K initiative that has already been funded.” Our middle team at $253,500 for three months, or the big team at $333,600, sits squarely in that range. Five permanent engineering hires is a different conversation with a different approver. Our guide to staffing a funded initiative without adding headcount walks through that approval.
One accounting note for the CFO. Contract developers working on internal-use software can often be capitalized rather than expensed, and FASB’s ASU 2025-06 replaces the old project-stage test with a simpler threshold, for fiscal years starting after December 15, 2027, with early adoption allowed. Capitalization starts once management has committed to funding the project and it’s probable the project will be completed. A funded team build often qualifies. Ask your controller before you assume it does. Policies vary.
Can You Keep the Developers Who Work Out?
Yes. After 1,040 hours, a KORE1 contractor can move to your payroll with no conversion fee. Full time, that’s 26 weeks, which is the six-month mark on the tables above. Convenient timing.
So a six-month team doubles as a long interview. A paid one. You see how each engineer handles a real codebase, a real deadline, and a real production bug. Nobody gets that from a whiteboard session. Of 552 KORE1 contract-to-hire placements, 207 ended in a direct hire, or 37.5%. Most don’t. Teams that plan for it usually convert one or two people, typically the senior lead or the engineer who ended up owning the hardest module. The rest roll off when the build ships. If you’re starting with conversion in mind, contract staffing with a 1,040-hour plan is a cleaner route than a direct-hire search running in parallel.
What Engineering Leaders Ask Before Budgeting a Team
What does a PM, three developers, and a QA tester cost per month in 2026?
About $84,500 a month at national medians, or $253,500 for three months, in the KORE1 Contract Rate Index 2026-Q4. All five seats are mid-level, billed hourly at 40 hours a week.
Price the same five people in the San Francisco Bay Area and three months runs $333,500. In Dallas-Fort Worth it’s $248,400.
So how much does one contract software engineer cost a month?
$18,700 a month for a mid-level engineer at the $108 national median, and $22,800 for a senior engineer at $131. Both are W2 contract bill rates at 40 hours a week.
KORE1’s own software engineer placements (n=16) bill a median $105. Offshore developers sold by the month are a different product and price far lower.
Is IT staff augmentation cheaper than hiring the same team full time?
Not per hour, usually. Payroll taxes, insurance, and the staffing firm’s margin all ride on a contract bill rate, so the hourly figure runs above a salaried engineer’s.
The savings show up elsewhere. No recruiting fees for five hires, no severance when the build ships, no benefits for people you need for six months. For a fixed-length project, the contract team usually costs less in total. For permanent work, it doesn’t. Our breakdown of IT staff augmentation cost compares the two at the single-seat level.
We need DevOps on the team. What should we budget?
Start at $70 to $90 an hour, the mid-level systems engineer range, because the index has no separate DevOps cell. That fits pipeline, environment, and cloud-account ownership.
A senior platform engineer running Kubernetes and Terraform bills closer to the senior software engineer range of $118 to $142.
Do contract development teams bill a fixed monthly fee?
Not at a staffing firm. KORE1 bills each seat hourly on approved timesheets, so a short week costs less and overtime shows up as its own line.
The monthly figures on this page are three-month totals divided by three, a budgeting convenience. Fixed monthly fees and fixed-price bids belong to consulting and managed-services models.
How fast can a five-person team start?
Faster than the paperwork, usually. Half of KORE1’s 1,997 contract starts began within three days of the offer. Days, not weeks.
Finding five people takes longer than finding one, and access is the slow part. Laptops, repository permissions, VPN, and security reviews can eat a week. Start those the day you approve the team.
Price Your Team Shape
Tell us the seats, levels, metro, start date, and length. We’ll total the team from the same index cells, flag any seat that should sit above the median, and say plainly if the work looks more like a consulting project than a staffing one. Get a bill rate quote for the full team. Want the numbers first? The 2026 contract rate card has every role in the index, and the contract staffing cost calculator will total any team shape you want to try. To check the method before trusting it, here’s how the KORE1 Contract Rate Index is built. And if you’re hiring engineers one at a time rather than as a team, our software engineer staffing practice handles that too.
About the data: every rate here is a cell in the KORE1 Contract Rate Index 2026-Q4 (effective October 16, 2026). Cells marked with an n are KORE1 W2 placements that started between 2023 and 2026, most in Southern California. All other cells are modeled on BLS Occupational Employment and Wage Statistics for May 2025 (published May 15, 2026) with a 24% employer burden. Team totals assume 520 hours per quarter. Assignment length, conversion, and time-to-start come from KORE1’s own assignment and start records. Next review is January 2027, alongside the index refresh.
