When a hiring manager gets budget approval for a senior engineer at $180K base, there’s a number in the spreadsheet and a number that actually leaves the company. They are not the same number. The gap between them — consistently 40 to 60 percent above base when you build it out properly — is where hiring decisions go wrong. Most companies have a rough sense that the total is higher, but few have actually done the line-by-line math. Here it is.
The base stack: what you pay before the engineer starts
Before the engineer’s first day, you’ve already spent money. A contingency recruiter at 20–25% of first-year base on a $180K role costs $36–45K. That fee is paid once and doesn’t show up on payroll, which is why it frequently doesn’t make it into the mental model of what the hire costs. If you’re using an internal recruiter, substitute the loaded cost of their time and the job board spend — typically $8–15K in real cost over a four-month search. Then add signing bonus if the market requires it: at the senior level in competitive markets, $20–40K is not unusual. You are now $40–85K in before the engineer writes a line of code.
The annual overhead stack
On top of the $180K base, the employer pays FICA (Social Security and Medicare) at 7.65% on the first $168K and 1.45% on anything above: roughly $13–14K annually. Federal and state unemployment taxes add another $1–2K. Health, dental, and vision insurance for an employee and family: $18–28K per year, depending on plan and state. A 401K match at 4% of salary: $7,200. These are the mandatory or near-mandatory line items. That’s $39–51K in annual overhead on top of base before you count anything discretionary.
Add the items that are technically optional but practically required to compete: annual learning and development budget ($2–5K), home office stipend for remote employees ($1–2K setup, $50–100/month ongoing), software and tooling licenses allocated to headcount ($1–3K), and the HR and payroll administration overhead that scales with headcount (often estimated at $1,500–3,000 per employee per year by HR software vendors). You are now at $44–62K in annual overhead above base, before equity.
Equity: the line item everyone underweights
A standard senior engineer equity grant at a Series B or later company runs $100–200K in grant value vesting over four years: $25–50K per year in dilution. At an early-stage startup, the numbers vary widely but the dilution is real regardless of whether it shows up on a payroll report. For the purposes of cost modeling, the equity component is a real cost to the company and to existing shareholders. Excluding it because it’s “just equity” is the kind of accounting that leads to surprise when you compare the total cost of headcount to revenue.
Adding a conservative $30K annual equity cost to the base overhead stack gives a total annual cost of $254–272K for a $180K base engineer. That’s a 41–51% overhead load. If you are in a hybrid or in-person model with real estate costs allocated per seat, add another $15–25K annually depending on market. San Francisco or New York office space per engineer seat runs $18–24K per year in allocated cost. The true all-in total for a $180K SF-based hybrid senior engineer is $270–300K annually.
The comparison that actually matters
A senior Czech or Slovak engineer engaged through CzechDevUSA at $100–120K annually as an EU-based contractor has a total cost structure that looks like this: the annual contract rate, plus the CzechDevUSA placement fee (paid once, on placement). No employer payroll tax. No benefits overhead. No equity dilution. No FICA, no 401K match, no health insurance. The contractor invoices monthly, you pay net-30, and the engagement ends cleanly if the fit isn’t right — no severance, no unemployment exposure. The total cost over a three-year engagement for a $110K Czech engineer is roughly $330–345K. The total cost over the same period for a $180K US engineer, accounting for one replacement cycle at 18 months, is closer to $640–700K. The difference is not a rounding error. It’s a second headcount.
If you’re modeling a senior hire and want to see what a pre-vetted Czech or Slovak engineer engagement actually costs, see what’s available and how the engagement works. No placement fee until the engineer starts.