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A CAD $120,000 developer costs roughly $155,000 a year once payroll costs, recruiting, equipment, and ramp-up are counted, and buys about 160 usable hours a month whether you use them or not. Here is the honest comparison against a $5,000 monthly retainer, including the cases where hiring wins.
Updated · 3 min read
The salary is the visible half. On top of a CAD $120,000 developer sit employer payroll costs, a recruiting fee near 18 percent of salary amortized over the tenure, equipment and software, and three to six months of reduced output while they learn your systems.
Be careful with the payroll number, because the common rule of thumb is wrong at this salary. CPP and EI are capped, so on $120,000 in Ontario the statutory employer cost lands near 5 to 7 percent depending on whether you are over the health tax exemption. Add health coverage and a retirement match and you are at roughly 15 to 20 percent all in. Loaded, the real annual number is around $155,000, not the $190,000 a 30 percent multiplier would suggest.
None of that is an argument against hiring. It is an argument against comparing a retainer to the salary line alone.
A full-time hire is scheduled for about 173 hours a month, but that is not what you get. Net of vacation and public holidays it is closer to 160, before any sick or personal days, and productive engineering time is lower again. You buy that capacity whether the workload fills it or not.
It also buys a single point of failure: one person's skill ceiling, one person's vacation, one person's resignation letter taking the institutional knowledge with it.
For steady product work that genuinely fills a calendar, that trade can be excellent. For the lumpy reality of most small-business software needs, integration this quarter, a storefront next quarter, quiet months in between, it usually is not.
A retainer buys outcomes against an agreed scope from a team: engineering, design, and operations experience that no single hire carries. Nockta's Development suite is $5,000 CAD per month, month to month, with 30 days notice and no severance, recruiting, or ramp-up on your books.
The honest limitation: you are not buying exclusive headcount. The team is shared across clients, which is exactly why it costs a third of a loaded hire. If you need someone in your office five days a week, this is not that.
Hire in-house when software is the product and needs full-time, compounding context; when you genuinely have 40-plus hours a week of engineering work every week; or when you are building a team of three or more and can support them with a delivery lead. At that scale the economics flip, and a good agency should say so.
The handoff matters more than the model: whichever way you go, insist on documentation, owned repos, and an exit that does not require the other party's goodwill.
If your real, sustained need is under about two full-time-equivalents of engineering, a retainer almost always wins on cost and resilience. Above that, in-house starts to win on context and availability. The calculator on our pricing page runs this comparison with your own numbers, salary, headcount, and scope included.
It is closer to a fractional team than to outsourcing: the same engineers every week, inside your Slack and your tools, with weekly demos. The difference from outsourcing is continuity and accountability; the difference from hiring is that you can stop in 30 days.
That path is designed in from the start: documented architecture, owned repos, runbooks, and a clean handoff to your hire. We build for handover from the start, whether that is to your first in-house hire or to another team.
Freelancers work for well-defined, bounded tasks. The failure modes are continuity and review: one person, no second set of eyes on architecture, and no coverage when they move on. A team retainer exists to remove exactly those risks.
In Canada a focused internal tool typically costs CAD $15,000 to $40,000, a customer-facing web application $40,000 to $120,000, and a SaaS product you can charge for $100,000 to $250,000 before the first paying customer. Integrations, user roles and undecided requirements move the number; the count of screens does not.
Hiring and costMost bad web projects in Ontario fail on the same four things: who owns the code, who actually writes it, what happens after launch, and whether the quote includes the work that always appears later. Here are the questions that surface all four.
Custom softwareThe automations that pay back fastest are the ones where someone today reads something and retypes it somewhere else: product data, supplier documents, support replies and weekly reports. A well-chosen first automation costs CAD $10,000 to $30,000 to build and removes a recurring task within weeks. A chatbot on the homepage is usually the wrong place to start.
Nockta builds ecommerce, custom software, and Amazon operations for businesses across Ontario and Quebec. See where we work or the full service list.