Hire an In-House Developer or a Studio? The Real Cost Comparison

Picture a founder with two pieces of paper. One is an offer letter from a developer asking for a monthly salary. The other is a studio quote for a three-month build. She compares the two numbers and picks the smaller.

That comparison misses most of the cost on both sides. A salary has costs wrapped around it. A quote has months of quiet after it. The fair comparison is cost per useful week of work, over the whole year.

This guide is part of our buyer series. For what an app costs to build, start with how much it costs to build an app in Kenya. Here we compare the two ways to get the work done.

We are a studio, so we have an interest. We have written the in-house case as fairly as we can, with a section on who should hire an employee instead of us.

WageIndicator reports that most software developers in Kenya earn between KES 61,188 and KES 187,588 a month in 2026. For people new to the job it gives KES 61,188 to KES 192,904 net a month, and for developers after five years KES 75,222 to KES 259,735 a month (WageIndicator Kenya software developers, checked on 3 November 2026).

The range is wide because the job title covers very different people: a graduate who has built two projects, and an engineer who has run a payments system for years. Figures from different sites also disagree, so treat any single number as a rough guide. Our own article on software developer salaries in Kenya compares several sources.

A salary also pays for one skill set. If you need back-end code, a mobile app, design and testing, one employee covers part of that and you still need the rest.

An employee costs more than the amount in the offer letter. These are the items to add.

Cost	What to know
Affordable Housing Levy	KRA states the employer pays 1.5 percent of the employee's gross monthly salary, matching the employee's own 1.5 percent
NSSF	Employers contribute under the NSSF Act and file by the 9th of the following month; get the current rate and limits from NSSF
SHIF	The employer deducts 2.75 percent of gross pay (minimum KES 300) from the employee and remits it to SHA, so it is a payroll task rather than an extra employer cost
Equipment	Laptop, monitor, power backup, internet and software licences
Recruiting	Advert fees, interview time, and the risk of a bad hire
Management time	Weekly hours from someone who can judge the developer's work
Leave and sick days	Weeks with no output, paid in full
Payroll admin	Monthly PAYE, levy and fund returns

Sources: KRA PAYE page for the housing levy, NSSF employers page for the filing date, SHA premium rates for SHIF, checked on 3 November 2026. We have left out the NSSF figure because we could not confirm the current rate and limits on NSSF's own pages today. Your accountant can supply it.

If you want to talk through your own numbers against a studio engagement, you can book a scoping call with Mctaba Labs.

For example, imagine a business with a monthly developer salary of KES 120,000. This is an invented figure to show the method, not a market price.

1. Salary: for example, 12 months times KES 120,000.
2. Housing levy: for example, 1.5 percent of KES 120,000 is KES 1,800 a month, so KES 21,600 a year.
3. NSSF: add the employer rate you confirm with NSSF.
4. Equipment and internet: add a year's share of the laptop, monitor, power backup and data.
5. Management: estimate hours per week from a manager, multiplied by that manager's hourly cost.
6. Recruiting: add the cost of the search, divided over the expected years of stay.

Now the useful weeks. Of 52 weeks, take off public holidays, leave, sickness and weeks when there is no software work to do. If your pipeline of work fills only 30 weeks, divide the year's total by 30, not 52. That is your real cost per useful week.

For a studio, do the same: the engagement's total divided by the weeks of work you actually receive, with a line for upkeep after launch. A studio's price tends to fall only in the weeks you use it, which is its whole advantage when work is uneven.

The studio side of the sum comes from a line-item quote. The method for getting one is in the pillar guide on how much it costs to build an app in Kenya.

A studio brings several skills under one contract. A designer, a developer who knows payments and someone who tests can work in the same week. You do not hire each separately.

It also brings experience from other jobs. A team that has connected M-Pesa to a ticketing app has already met the late callback and the duplicate notice. Our products and client platforms cover M-Pesa, WhatsApp and AI work, listed on the work page.

What a studio does not give you is someone who sits beside the finance team every day and knows your business in their bones. That deep context is an employee's advantage. A studio replaces it with written briefs, weekly demos and a short feedback loop.

• You can start in weeks, not after a three-month hiring process.
• You can stop when the build is finished, without a redundancy conversation.
• You carry the contract risk instead of the employment risk. Read the contract points in 12 questions to ask before you hire a software studio in Africa.

The choice is not all or nothing. A common pattern is one employee who owns the product and the vendor relationships, and a studio that does bursts of heavy building.

The employee decides what to build and checks the work. The studio supplies extra hands for a payments integration, a mobile app or an AI agent, then steps back. It keeps salary cost steady and puts the peaks onto a contract.

For examples of work that fits the burst model, read seven jobs an AI agent can take off a small business, and custom software or off-the-shelf POS for the build-or-buy question that comes first.

We would tell these businesses to hire an employee.

• Software is your product. If customers pay to use what you build, you want the knowledge inside your company.
• There is steady work all year. If you can fill 40 or more weeks with useful tasks, an employee's cost per useful week falls.
• You have someone who can manage and review code. A developer without a competent reviewer drifts.
• Your problem is deep and specific. Several years inside one codebase beats outside speed.
• You can pay a fair salary and wait for the hire. A cheap hire on a hard job costs more than the salary saved.

If you do hire later, a good studio hands over the code and the notes. That handover is the point of the contract clause on code ownership.

1. How many weeks of useful software work do I have in a normal year?
2. Is the work one skill or four?
3. Who will review the code and the decisions?
4. How fast must the first version be live?
5. What happens to the project if my developer leaves?
6. Will this software be my product or a tool that supports my product?

If the answers are "few weeks, four skills, nobody, soon, it stops, a tool", a studio is the cheaper and safer path. If they are "all year, one skill, me, no rush, we recruit, our product", hire.

Do the sum above for the employee you are thinking of hiring. Then ask two studios, and us if you like, for a line-item quote for the same list of work. Divide both by useful weeks.

To compare with an engagement from us, book a scoping call with Mctaba Labs.