The five components of a staff augmentation rate
1. Engineer compensation (~55–65% of rate)
The largest component. Covers gross salary, employer social contributions, health insurance, equipment, and a paid-time-off allowance. In Romania a senior engineer billed at €65/hour typically nets €4,200 monthly take-home.
2. Partner overhead (~13–20%)
- Recruiting (sourcing, screening, interviewing)
- HR and people-ops
- Accounting and tax compliance
- Office space (where applicable)
- Internal tooling (Slack, GitHub seats, etc.)
3. Vetting and onboarding amortisation (~7–10%)
The cost of finding and vetting an engineer doesn't disappear after placement. Vetting amortises over the expected engagement length. A €4,000 vetting cost spread over a 12-month engagement adds ~€2/hour to the rate.
4. Legal and compliance (~4–7%)
- IP-transfer agreements
- GDPR compliance overhead
- Cross-border contracting costs
- Insurance (professional indemnity, cyber)
5. Partner margin (~7–13%)
The partner's profit. Higher margins (above 15%) typically indicate either a marketplace model with significant arbitrage, or sub-contracting (the partner is itself buying from another partner).
Why opaque pricing is a red flag
If a partner quotes a single blended rate with no breakdown, it usually means one of three things: margin is high and they don't want to disclose, engineers are sub-contracted (you're paying two layers of margin), or rates flex based on what the partner thinks the client will pay.
How to validate a quote
- Ask for the engineer's gross monthly compensation as a percentage of the rate
- Ask whether the engineer is direct-employed or sub-contracted
- Compare against published rate sheets (HighCircl, Lemon.io, Arc.dev all publish bands)
