The cost of a senior engineering hire is more than the base salary. Equity, the recruiting fee, benefits, onboarding, and the time your team spends on the search all belong in the budget. This guide gives you the line items and a worked example built on labeled assumptions so you can replace each input with your own.
Correction: An earlier version of this article presented salary ranges, time-to-fill figures, and cost totals as market data from Refery placements. There is no verified dataset behind those figures and they have been withdrawn. The example below is an illustration, not a benchmark.
The line items
| Cost component | What it includes | How to estimate it |
|---|---|---|
| Base salary | Annual cash compensation | Your offer range for the role and location |
| Equity | Grant value spread over the vesting period | Grant size × your current valuation, divided by vesting years |
| Recruiting fee | Fee to the provider that sourced the hire | Fee basis × percentage, or a flat fee, per your agreement |
| Benefits and payroll tax | Health insurance, retirement match, employer-side taxes | Your benefits provider's per-employee cost plus statutory rates |
| Onboarding and equipment | Laptop, software, accounts, first-week time | Your actual purchasing list |
| Team time | Hours spent sourcing, interviewing, and closing | Track hours during the search; label any hourly cost you assign |
Two of these are commonly missed. Equity is real cost because it dilutes the cap table and candidates weigh it in offers. Team time is real cost because interview hours come out of shipping hours.
A worked example (illustrative)
The numbers below are example inputs chosen for round arithmetic. They are not a market average and not a Refery placement.
| Component | Assumption | Year-one cost |
|---|---|---|
| Base salary | $200,000 | $200,000 |
| Equity | Grant valued at $80,000 vesting over 4 years | $20,000 |
| Recruiting fee | 15% of base (agreed in the search agreement) | $30,000 |
| Benefits and payroll tax | 15% of base | $30,000 |
| Onboarding and equipment | Laptop, peripherals, licenses | $6,000 |
| Total year one | $286,000 |
Team time is excluded from the total because it is not a cash line. If you want to include it, multiply tracked interview hours by an internal rate you choose and label it as your own assumption.
At this salary the recruiting fee is roughly 10% of the year-one total. Raising the base by $50,000 changes the total by more than switching between any two fee structures does. Keep both in proportion when negotiating.
Recruiting fee: what moves the number
The recruiting fee is the line most open to negotiation, and the one most founders treat as fixed.
- Fee basis. Confirm whether the percentage applies to base salary only or to base plus bonus, commission, or equity. Refery's fee is on first-year base salary.
- Payment trigger. An invoice may be triggered by signed offer, start date, or another event. Read the actual clause.
- Upfront components. Retainers or listing fees are paid whether or not you hire. Include them in the cost of searches that do not close.
- Replacement terms. If the hire leaves early, what does the provider do, over what period, and is there a fee? Refery runs a replacement search at no extra fee on the terms in the client agreement.
Refery's published pricing is 15% to 25% of first-year base salary, paid only when you hire someone Refery introduced, with the exact scope and fee agreed before the search starts. On the $200,000 example above that is $30,000 to $50,000 depending on the agreed rate.
For a structured comparison of proposals, see recruiting agency vs referral marketplace: compare the actual cost.
Equity: how to put it on the budget
Take the grant's value at your current preferred price and divide by the vesting period. A grant worth $80,000 vesting over four years is $20,000 per year. If you prefer to budget on percentage ownership, convert it using your post-money valuation and label the assumption.
Candidates compare offers on the whole package. A lower base with a larger grant may cost less cash and still win the candidate, but only if the equity story is credible. See explain startup cash and equity offer.
Benefits, payroll tax, and onboarding
Employer-side payroll taxes are statutory and easy to look up for your state. Health insurance and retirement match depend on your plan. Ask your benefits provider for the per-employee cost and add it directly rather than estimating a percentage.
Onboarding is small but real: hardware, software seats, and the first week of a senior colleague's time to get the new hire productive.
Time on the search
Vacancy has a cost, but do not invent one. Multiplying open days by salary does not measure lost output. What you can measure is the hours your team spent on the search and how long the role stayed open. Record both, and use the hiring metrics template to keep definitions consistent across searches.
Where time matters most is in the interview loop. A loop that drags loses candidates to other offers, which restarts the clock and the cost. See map interview evidence and remove extra stages.
Ways to lower the cost without losing the candidate
- Negotiate the fee structure, not the offer. Cutting a senior candidate's base to save cash often loses the hire. Agreeing scope and fee before the search starts protects the offer.
- Set the fee basis clearly. Base-only versus total compensation can change the fee materially at senior levels.
- Compress the loop. Fewer, better-designed interview stages reduce team hours and reduce the chance of losing a finalist.
- Track searches that did not close. Upfront fees on failed searches belong in your real cost per hire.
Build your own version
Copy the table above, replace every assumption with your own, and keep the labels. A budget that says where each number came from is one you can defend to your board and update when the market moves.
Share your role with Refery to agree the scope and fee for your search.
For what the recruiting half of that cost looks like across providers, see what a startup recruiter costs, which lists published fees from eight of them.