How Much Should You Pay for a Developer Salary in 2025 in the USA?
Starting a tech startup is exciting, but one of the biggest questions founders face is: how much should you pay developers? The cost of hiring and building your team has a huge impact on your company's success. Let’s break down what you can expect to spend on developer salaries in 2025 and the total cost to form your first tech team.
Average Developer Salaries in 2025
Salaries vary by experience, skill set, location, and company size. Still, you need some numbers to plan.
Junior Developers
Junior developers have less than two years of experience. In 2025, many entry-level software engineers are earning between \$85,000 and \$110,000 per year in most U.S. cities.
Mid-Level Developers
With about three to five years under their belt or specialized skills (like mobile apps or cloud platforms), mid-level engineers make \$115,000–\$150,000 annually.
Senior Developers
Senior engineers with more than five years' experience or who take on lead roles often see salaries ranging from \$155,000 up to \$210,000, especially at startups needing high expertise quickly.
Specialized Roles
- Frontend/backend specialists: Add about \$10K–\$20K over typical ranges.
- DevOps/Cloud Engineers: Often command between \$140K–\$200K.
- Machine Learning/AI Engineers: Premium skills may fetch up to \$230K+ at venture-backed companies competing for top talent.
Other Costs Beyond Base Salary
Base salary isn’t the whole story. Here’s what else goes into compensation:
- Benefits: Health insurance (\$8k–15k/year per person), retirement contributions (like 401k matches), paid time off
- Equity: Early-stage startups offer significant stock options rather than high cash salaries
- Payroll taxes & administration: Typically adds another 8–10% per employee
- Recruitment fees, if using agencies: Upfront fee (often around 15%–25% of first-year salary) unless hiring through referrals/networking
In total compensation terms (salary + benefits + taxes + equity), plan on spending about another 18% above base salary each year for every full-time hire.
Building Your First Tech Team: Real Numbers
The average new SaaS or app startup begins with:
- Lead Engineer/CTO
- Two Full Stack Developers
- One UI/UX Designer
- Optionally: DevOps Engineer / Mobile Specialist
Here’s an annual budget breakdown at competitive US rates:
| Title | Salary Range | Benefits & Taxes | Estimated Total |
|---|---|---|---|
| Lead Engineer | \$180k | ~\$32k | ~\$212k |
| Full Stack Dev x2 | \$130k x2 | ~\$23k x2 | ~\$153k x2 |
| UI/UX Designer | \$110k | ~\$20k | ~\$130k |
| DevOps/Mobile Eng(a) | \$150k(b) | ~\$27k | ~\$177k |
(a) Not all early teams need this role immediately
(b) Use only if needed from day one
That brings your core engineering team budget within the range of \$650K-\$825K per year as cash outlay—with actual “cost” possibly lower if candidates accept larger equity portions instead of full-market cash pay early on.
Saving Money With Remote Teams?
Remote hiring lets companies consider talent outside big tech hubs like San Francisco or New York City—sometimes bringing costs down by 10%-30%. Yet competition even for remote roles remains strong post-pandemic; top-tier remote devs still earn close to city rates but appreciate flexible work perks more than ever before.
Startups may also hire contractors initially; that means less overhead but typically higher hourly costs (\$80-\$175+/hr for skilled U.S.-based contract developers).
Hiring great developers is expensive—but not having them is even costlier when building technology products from day one! Make sure you set realistic budgets so there are no surprises as you start recruiting technical talent for your new adventure—and remember that creative use of equity plus investing early in quality hires pays back quickly as your business scales up.
