May 28, 2020

Software Outsourcing in Romania: Pricing

The average daily cost for software outsourcing in Romania is between $260 and $315.

For Bucharest (the largest city and tech hub), the average cost is between $300- $360

Here are the numbers:
According to the Ministry of Public Finance, there are more than 100.000 employees in the IT field, with an average net income of $1600/month.

This income is a relevant standard for the Romanian IT industry as a whole. If we branch out and only consider the software development industry, the average net income for a Software Engineer approximates to $2000.

The software industry in Romania is encouraged by national politics that also include some tax deductions.

For a net income of $2000/month, the employer’s cost will be approximately $3200. We have used this online calculator, a useful tool subsuming all tax obligations for the IT industry.

$2000 x 1.57 ≈ $3200

Other employer expenses:

– Office monthly rent, utilities, miscellaneous totaling an average of $500/month for each developer.

$3200 + $500= $3700

– Project management, recruiting, hardware, and risks. Anything else? Unless you score maximum points in charisma and some rich Romanian philanthropist will fall in love, there’s also the supplier’s margin. From our experience, all these will total in the $1000-$2000/month range, depending on each company’s technical and business skills.

$3700 + $1000/2000 = $4700/$5700 ≈ $260 – $315/day, considering an average of 18 working days per month.

RED FLAG: Average rates in Romania that are under the $270/day limit should have a red flag. Some companies afford to offer these rates because they pay fewer taxes or practice risky cost-cutting. In this case, you might not have property rights over the source code and we strongly advise you to consult a local lawyer, before signing the contract. Or call us.

PS: The rates we have calculated are a national average and will vary depending on city, technology, seniority level.

If you are planning to grow development teams larger than 50 ppl, we can only recommend four cities in Romania – Bucharest, Timisoara, Cluj and Iasi.
For Bucharest, expect 15% higher development costs: $300 – $360/day, about 10% higher in Cluj: $285 – $345/day, whereas companies from Timisoara and Iasi fit in the national average.

Please read the updated article – Software Outsourcing in Romania: Pricing in 2022