One of the first questions investors ask founders, and the first question CFOs ask CTOs, is some version of: "What does your engineering team actually cost?" It sounds simple. It isn't.
The answer depends on team size, seniority mix, location, employment structure, and a dozen other variables. But there are useful reference points — and this guide provides them, with worked examples at three team sizes.
What is the formula for calculating engineering team cost?
Fully-loaded engineering team cost = Σ (salary × on-cost multiplier) + infrastructure + tooling + recruiting overhead + management layer
The on-cost multiplier accounts for employer taxes, pension, benefits, and overhead. In the UK it typically runs 1.3x–1.5x on base salary. In the US, 1.5x–1.8x.
For a quick estimate: multiply your total headcount salary cost by 1.4 (UK) or 1.6 (US) and add 15–20% for infrastructure and tooling. This won't be precise, but it will put you in the right order of magnitude.
How much does a five-person engineering team cost?
A common configuration at seed-stage or early Series A — a small team building an MVP or early product.
Team composition:
- 1 × Tech Lead / Principal Engineer
- 2 × Senior Software Engineers
- 1 × Mid-level Software Engineer
- 1 × Frontend / Full-stack Engineer (mid)
UK-based, fully remote:
| Role | Base Salary | Fully-Loaded Cost | |---|---|---| | Tech Lead | £120,000 | £168,000 | | Senior Engineer × 2 | £90,000 each | £126,000 each | | Mid Engineer × 2 | £65,000 each | £91,000 each | | Total headcount | £430,000 | £602,000 |
Add infrastructure (£30,000/yr), tooling (£4,000), recruiting (£20,000), team travel (£5,000):
Total annual engineering cost: approximately £661,000 Per-engineer average: ~£132,000 fully-loaded.
How much does a 15-person engineering team cost?
A typical Series A/B configuration — three or four squads, with an engineering manager layer emerging.
Team composition:
- 1 × VP Engineering or CTO
- 1 × Engineering Manager
- 4 × Senior Software Engineers
- 5 × Mid Software Engineers
- 2 × Junior Engineers
- 1 × Platform / DevOps Engineer
- 1 × QA Engineer
| Role | Count | Base Each | Fully-Loaded Each | Team Total | |---|---|---|---|---| | VP Engineering | 1 | £160,000 | £220,000 | £220,000 | | Engineering Manager | 1 | £110,000 | £154,000 | £154,000 | | Senior Engineers | 4 | £95,000 | £133,000 | £532,000 | | Mid Engineers | 5 | £65,000 | £91,000 | £455,000 | | Junior Engineers | 2 | £42,000 | £59,000 | £118,000 | | Platform Engineer | 1 | £95,000 | £133,000 | £133,000 | | QA Engineer | 1 | £60,000 | £84,000 | £84,000 | | Total | 15 | | | £1,696,000 |
Add infrastructure (£120,000/yr), tooling (£20,000), recruiting (£55,000), office and events (£20,000):
Total annual engineering cost: approximately £1,911,000 Per-engineer average: ~£127,000 fully-loaded.
How much does a 30-person engineering team cost?
A Series B/C configuration — multiple product squads, specialist platform and security functions, and a meaningful management layer.
Team composition:
- 1 × CTO
- 3 × Engineering Managers
- 8 × Senior Software Engineers
- 10 × Mid Software Engineers
- 4 × Junior Engineers
- 2 × Platform / Infrastructure Engineers
- 1 × Security Engineer
- 1 × Staff Engineer / Architect
| Role | Count | Fully-Loaded Each | Team Total | |---|---|---|---| | CTO | 1 | £280,000 | £280,000 | | Engineering Managers | 3 | £175,000 | £525,000 | | Staff Engineer | 1 | £200,000 | £200,000 | | Senior Engineers | 8 | £140,000 | £1,120,000 | | Mid Engineers | 10 | £95,000 | £950,000 | | Junior Engineers | 4 | £60,000 | £240,000 | | Platform Engineers | 2 | £150,000 | £300,000 | | Security Engineer | 1 | £160,000 | £160,000 | | Total | 30 | | £3,775,000 |
Add infrastructure (£375,000/yr), tooling (£55,000), recruiting (£130,000), office and L&D (£70,000):
Total annual engineering cost: approximately £4,405,000 Per-engineer average: ~£147,000 fully-loaded.
What are the key insights when scaling an engineering team?
Fully-loaded cost is ~1.4–1.6x base salary
Across all three scenarios, the fully-loaded cost per engineer runs 1.4–1.55x base. This is a useful rule of thumb, with benefits-heavy companies and US-based teams at the higher end.
Infrastructure costs grow super-linearly
Going from a 5-person to a 30-person team doesn't grow infrastructure costs 6x — it can grow them 10–15x. Product complexity, data volumes, and reliability requirements all scale faster than headcount.
Management overhead becomes significant at 15+
At five engineers, management cost is minimal. At 30 engineers, leadership roles represent roughly 30% of total headcount cost. This is normal and necessary — but it surprises founders.
Seniority mix matters more than location
Switching from London-based to remote-UK doesn't dramatically change per-engineer costs. Shifting from a senior-heavy to a junior-heavy team composition has a far bigger impact.
Using These Numbers in Practice
These figures provide useful reference points, but your actual costs will depend on your specific team, location, benefits package, and infrastructure architecture.
TeamCalc lets you build a model specific to your team — roles, seniorities, locations, and employment types — with all on-costs calculated automatically and salary benchmarks overlaid.