The model
Effective hourly rate
The loaded cost of an engineer per year divided by their productive hours — the rate every hour of effort is priced at.
- Unit
- money per hour
- Where you enter it
- Computed from Settings; shown there as "Effective hourly rate".
What it means
Loaded FTE cost per year divided by productive hours per FTE per year, both set in Settings. Loaded means salary plus employer costs, benefits and overhead; productive hours excludes leave, training and the rest of the calendar that is not test work — 1,800 is a common figure.
Every effort line in the model — build, run, maintenance — is multiplied by this rate to become money.
Why it matters to the cost
It scales every labour figure equally, so it never changes the ranking between vendors — but it decides the size of every saving, and it is the number finance will check first. The default of $120,000 over 1,800 hours is about $67 an hour; a contractor rate can double it.
Typical values
$50–$120 an hour depending on market, seniority and whether contractors are involved.
Typical values describe a category of tool — AI-native, codeless, script-based, homegrown, manual — never a named product. Why we do not price named products.
Where it appears in the model
Build — one-off
- Total test cases
- basic + average + complex Test case complexity tiers
- Build effort
- Set up, install and configure + Scoping the suite + Training time per person × People trained
- + Σ Test case complexity tiers × Build time per test case for each tier, as Scratch vs migration
- Build cost
- Build effort × Effective hourly rate + Build tokens priced as Token cost
Run — every release
- tests broken per run
- Total test cases × Test breakage rate ÷ Runs per year — found here, repaired under Maintain
- flaky per run
- Total test cases × Flaky failures per run
- Failures per run
- Defects found per run + tests broken per run + flaky per run — derived, never asked
- Run effort
- Prepare and start a run + Failures per run × Triage one failure + Defects found per run × Write up one defect + Report and sign off — an automation tool
- Run effort
- Prepare and start a run + Total test cases × Execution time per case + Defects found per run × Write up one defect + Report and sign off — a manual approach — the tester is the run
- Machine time per run
- Total test cases × Execution time per case — automation only; duration, not labour
- Run cost per year
- Run effort per run × Runs per year × Effective hourly rate + Token cost
Maintain — continuously
- cases to repair
- Total test cases × Test breakage rate
- cases healed
- Total test cases × Self-healed cases per year
- Maintenance effort per year
- cases to repair × Repair time per case + cases healed × Review one heal + Platform upkeep per year + New cases added per year × Build a new case
- Maintenance cost per year
- Maintenance effort per year × Effective hourly rate + Token cost
Turning effort into cost
- Effective hourly rate
- loaded cost per FTE per year ÷ productive hours per FTE per year
- Labour cost
- hours × Effective hourly rate
- Token cost
- tokens ÷ 1,000,000 × cost per million tokens
Every name is a link to its definition. See the whole model.
Try it with your numbers
The calculator works effective hourly rate out from the rows it is built on. Change those and every total on the page moves with them — free, in your browser, nothing to install.
See how effective hourly rate impacts the calculation of test automation costsLast reviewed 2026-09-15. All terms.