A Series A engineering budget is mostly a payroll decision. ICONIQ's 2024 engineering report says personnel costs make up "usually ~70-80% of total spend" in the growth-stage companies it covers. That's R&D spend at growth-stage companies, not Series A specifically, so treat it as a direction, not a target. The AI seat line and the infra line move your total far less than the choice of who you hire, where, and on what terms.
This article builds one budget for one model team: 12 engineers. Every figure is either sourced, shown as arithmetic, or marked as an input you supply. Where no benchmark exists, it says so instead of guessing one. For the wider set of CTO decisions around a raise, start with Startup CTO guides: leadership, diligence and the first hires.
What goes into a Series A engineering budget?
Five lines: headcount, AI seats, infra and cloud, tooling and SaaS, and contingency.
Only some of them have a source behind them. Headcount does, through Eurostat labour-cost data and HighCircl's published rate band. AI seats do, through vendor list prices. Infra, tooling and equipment don't: there's no sourced benchmark for Series A cloud spend in Europe, and plenty of guides that offer a percentage don't cite where it came from. Those lines are yours to fill, and the method for them is below.
Contingency is a judgment call, not a statistic. Pick a percentage with your CFO and write it down as an assumption.
How big is the payroll line, and what share of the budget is it?
On ICONIQ's numbers, personnel is the largest block of spend, "usually ~70-80%". The same report puts engineering at "~80-90% of the total R&D headcount" and says R&D spend "plateaus to ~20-30% of revenue as companies reach critical scale".
Other guides quote payroll shares of 65-75% or 70-85% without a primary source. They land in the same neighbourhood, which is reassuring, but none of them is evidence.
The practical reading: if payroll is three quarters of your engineering budget, a 10% error in your hourly-rate assumption moves the total more than the entire AI seat line does. Spend your planning time there.
What does an engineer cost per hour in each European country?
Eurostat's dataset lc_lci_lev, labour cost levels by NACE Rev. 2, reports hourly labour cost in euros (compensation of employees plus taxes minus subsidies). The table uses the 2025 values for the whole economy and for ICT (NACE section J), alongside 2024 for ICT. The Netherlands is left out because Eurostat returned no 2025 ICT value for it.
| Country | Whole economy (B-S_X_O), 2025 (€/hr) | ICT 2025 (€/hr) | ICT 2024 (€/hr) |
|---|---|---|---|
| EU27 | 34.9 | 48.2 | 46.3 |
| Germany | 45.0 | 58.5 | 57.4 |
| France | 44.3 | 59.2 | 57.2 |
| Spain | 26.4 | 34.8 | 33.3 |
| Slovenia | 29.7 | 38.3 | 35.9 |
| Slovakia | 19.8 | 30.8 | 28.8 |
| Poland | 19.1 | 29.3 | 26.3 |
| Romania | 13.6 | 26.0 | 23.7 |
| Hungary | 15.2 | 24.4 | 22.5 |
Read this as a country-ratio view, not a salary guide. NACE J is the whole information and communication section, so the ICT column averages every employee in it, not senior engineers. It's closer to a floor than to what a senior hire costs. Serbia, one of HighCircl's seven European countries, isn't in the EU and so isn't in Eurostat's table. Eurostat's own whole-economy release puts the EU average at €34.9 an hour, in a range from €12.0 in Bulgaria to €56.8 in Luxembourg.
The ratios are the useful part. ICT hourly cost in Germany (€58.5) is about double Poland's (€29.3), and Hungary's €24.4 sits at well under half of France's €59.2. Hourly cost in ICT rose in every country listed between 2024 and 2025. If your plan assumes a flat rate for a second-year hire, it's already behind.
What does the 12-engineer payroll look like in-house versus nearshore?
Nearshore first, because it's one multiplication. HighCircl lists a rate of €45-105/hr ($50-115/hr) for senior engineers. Assume 160 billable hours a month (an assumption, not a HighCircl term):
- Per engineer: 160 × €45-105 = €7,200-16,800 a month.
- For 12 engineers: 12 × €7,200-16,800 = €86,400-201,600 a month.
HighCircl's margin is capped at 20%, applied on top of what the engineer earns. There's no subscription, no recruitment fee and no minimum hours.
For in-house, you need your own gross salary offers, which this article doesn't publish. What it can show is the hourly floor from Eurostat, as an illustration only. Take the ICT sector average and the same 160 hours: Poland is 160 × €29.3 = €4,688 per engineer a month, Germany 160 × €58.5 = €9,360. For 12 people that's €56,256 and €112,320. These are sector averages, so a senior-heavy team will sit above them. The point is the ratio between countries, not the totals.
Employer contributions, notice periods and severance are the in-house costs that don't show up in an hourly average. The sibling guide covers employer contributions and notice terms in Germany and Poland, with the arithmetic, so the tables aren't repeated here.
Which side wins depends on seniority and hours, and nothing here settles it. A team of 12 seniors on a nearshore rate and a team of 12 mid-level hires on in-house contracts aren't the same product at different prices. For the first-hire end of this, founding-engineer equity and contracts is a separate negotiation from the rate band.
How much does the AI seat line add?
At list price, very little. Twelve paid seats at $10-125 per seat per month (Copilot Pro to Claude Team Premium on monthly billing, excluding free tiers and individual Max/Ultra plans) is $120-1,500 a month. Those are list prices checked in late September 2026 in the sibling article, which has the full breakdown of what each AI coding tool costs per seat.
Put that beside €86,400 a month at the low end of the nearshore payroll and the seat line is a rounding error. The unknown is usage billing: overage charges for heavy agentic use aren't published as a fixed number, so there's no honest figure to put in the cell.
Budget owners are already feeling it. Jellyfish's 2026 engineering leaders report says "forty-two percent cited increasing AI tool expenses as a primary challenge, making it the most commonly reported obstacle to adoption". The page cites 600+ engineering leaders for the report overall but gives no base for this figure. Its 2025 management trends report found 23% of respondents are reallocating headcount budgets to pay for AI tools.
Our read, as judgment: at list price, seats don't compete with a hire. They only start to when they're billed by usage, so that's the line to cap and watch.
What do infra and tooling add?
There isn't a sourced Series A benchmark for European cloud spend, and importing a percentage from a US blog would make this budget look more certain than it is. Use your own data instead.
- Take your last three cloud bills.
- Work out the monthly growth rate you expect from the product plan, not from headcount.
- Multiply forward across the 12 months the round has to cover.
- Add tooling and SaaS as a per-engineer monthly figure from your current invoices, times headcount.
That's a defensible number because every input is something your finance lead can check. Equipment and licences follow the same rule: use a real quote.
Worked example: three ways to staff the same team
The model team is 12 engineers. Totals aren't invented; each cell is a formula or a range from above. The in-house cost per engineer, I, is your own number: gross pay plus employer contributions.
| Staffing model | Payroll per month | AI seats per month | Infra and tooling | Contingency |
|---|---|---|---|---|
| All in-house | 12 × I | $120-1,500 | Your bills, grown | Your % × total |
| 3 in-house seniors, 9 nearshore | 3 × I + 9 × €7,200-16,800 (nearshore part = €64,800-151,200, plus 3 × I) | $120-1,500 | Your bills, grown | Your % × total |
| Nearshore-heavy | 12 × €7,200-16,800 (= €86,400-201,600) | $120-1,500 | Your bills, grown | Your % × total |
The AI seat column barely changes across rows, which is the finding. The decision lives in the payroll column, and there the inputs that matter are your own: I, the nearshore rate you actually negotiate, and the hours.
What this means for your Series A engineering budget
Set payroll first, as hours times a rate band, and let everything else be sized against it. Treat AI seats as a capped line with a usage alert, not a per-head assumption. Hold a contingency percentage you chose on purpose, and write the reason next to it.
When you take this to your CEO and CFO, ask for approval of ranges, not points. A range like €86,400-201,600 a month for 12 senior nearshore engineers is honest about the rate band, and it keeps you from re-opening the budget every time a hire lands at the other end of it. That's judgment, not a benchmark, but it matches how the inputs behave.
Before you lock the headcount number, decide the seniority mix, because that's what moves payroll most. The seniority mix question is the next thing to settle.
Hiring senior engineers through HighCircl
HighCircl places senior engineers from seven European countries at €45-105/hr ($50-115/hr), with a transparent 20% margin, capped and applied on top of what the engineer earns. A shortlist of three to five candidates arrives in 72 hours, from a pool where about 1 in 10 applicants pass vetting. There's no subscription, no recruitment fee and no minimum hours. A deposit of one month's estimated cost is applied to your first invoice. See senior engineers through HighCircl.
FAQ
How much of a Series A budget is engineering?
There's no sourced Series A-specific figure. ICONIQ's 2024 report says R&D spend levels off at around 20-30% of revenue once a growth-stage company reaches critical scale, which isn't the same as a Series A split. Within engineering spend, it puts personnel at "usually ~70-80%".
What does an engineer cost per hour in Poland vs Germany?
Eurostat's 2025 hourly labour cost for the ICT sector is €29.3 in Poland and €58.5 in Germany. Those are averages for every employee in the sector, not senior engineers, so use them for the ratio, not as a salary.
Are AI coding seats a meaningful budget line?
At list prices for paid seats of $10-125 per seat per month (Copilot Pro to Claude Team Premium on monthly billing, excluding free tiers and individual Max/Ultra plans), twelve seats cost $120-1,500 a month, which is small against payroll. Usage-billed plans are the exception, and no fixed overage figure is published to plan around.
Should Series A teams hire in-house or nearshore?
It depends on seniority and hours, and the arithmetic above shows both sides without naming a winner. At HighCircl's €45-105/hr band and 160 hours, one nearshore engineer is €7,200-16,800 a month. Compare that with your own in-house gross pay plus employer contributions.