Tech debt costs $33K to $55K per engineer per year, before incidents and compounding.
Stripe and McKinsey measured 25-42% of engineering time spent on tech debt. At median US salaries that is roughly the cost of a junior engineer per senior engineer, every year. This page gives you the answer in 60 seconds. The calculator and the research live next door.
Core Sample 01
The 60-second summary
Five facts your VP of Engineering needs in their pocket. Each layer is a finding from a named study. Read top to bottom: most recent at the surface, oldest data deepest.
Layer 01 / Surface / DORA 2024
65% of production incidents trace back to technical debt root causes.
Layer 02 / McKinsey 2023
25 to 42% of engineering capacity goes to debt-related work.
Layer 03 / CAST CRASH 2024
Unaddressed debt compounds 15 to 25% per year, doubling every 3-5 years.
Layer 04 / CISQ 2022
Total US poor-software-quality cost: $2.41 trillion, of which $1.52T is debt.
Layer 05 / Stripe 2018 / Bedrock
17.3 hours per week per engineer lost to maintenance and bad code (33%).
Reference Card 01
Per-developer cost: pick your row
Annual debt cost per engineer at common fully-loaded salary levels and drag rates. Screenshot this for the budget meeting.
cost = salary x drag_pct. Fully-loaded = base + benefits + overhead (~1.4x base). Industry midpoint: 30% drag.
Compound Strata
The deeper you dig, the more you find.
Untouched debt accrues 15-25% per year. Workarounds layer on workarounds. The data model that was right for 10K users blocks the migration to 10M. A 10-person team starting at $390K of drag finds itself paying $1.05M five years on.
See budgetoverrun.com for the broader picture on engineering budget overruns.
10-person team, $130K fully-loaded, 30% starting drag, 18% annual compound (CAST midpoint).
Decision Layer
What to do next
Pick the page that matches your immediate need. Each is a 2-minute read.
Measure your number
Four methods in 5 minutes. Survey, static analysis, cycle time, post-mortems. Pick one to start.
Pitch leadership
Translation table, five-slide structure, top objections answered. The one-pager for your VP meeting.
Reduce the burden
Three sprint allocation models, prioritisation tiers, prevention checklist. Cheat sheet format.
Calculate ROI
Median 80-400% within 12 months. Three scenarios. When not to invest. The yes-or-no answer.
Need the interactive calculator? techdebtcalculator.com has the full ROI modeller, scorecards, and PDF export. Need the deep research? technicaldebtcost.com has the full studies, by-industry breakdowns, and attrition data. This site is the cheat sheet that links to both.
git blame --reverse
Where the cost shows up
The five line-items the CFO will recognise. Each one is the same debt, billed against a different account.
Field Notes
Frequently asked, quickly answered
How much does tech debt cost per developer?+
$33,000 to $55,000 per engineer per year, calculated as 25-42% of fully-loaded salary spent on debt work. At a $160K fully-loaded cost with 33% drag (Stripe midpoint) that is $52,800 per engineer per year.
What percentage of engineering time goes to tech debt?+
25-42% per McKinsey 2023 (the rigorous range). 33% per Stripe 2018 (the headline midpoint). DORA 2024 elite teams sit under 8%; struggling teams report over 50%. Most organisations land in the 25-35% band.
Does technical debt get worse over time?+
Yes. CAST CRASH Reports document 15-25% annual compound growth on untouched debt. A $400K drag in year one becomes over $1M by year five. Workarounds layer on workarounds, dependencies drift, tribal knowledge evaporates.
How do you calculate tech debt cost?+
Simplest formula: annual_cost = team_size x fully_loaded_cost x drag_percentage. A 25-person team at $160K fully-loaded with 30% drag is $1.2M per year. For three formal methodologies (productivity-loss, SQALE, interest-accrual) and the interactive calculator, see techdebtcalculator.com.
Is tech debt worth fixing?+
Yes for targeted initiatives. Median ROI of 80-400% within 12 months and break-even at 5-7 months (McKinsey 2023). Skip it if the product is being sunset, the debt sits in rarely-touched code, or a full rewrite is already approved. See /roi for the decision framework.
How do you present tech debt cost to a CFO?+
Translate to dollars not code quality. Lead with annual payroll cost, show 5-year compound growth, propose a specific investment with payback period. Avoid the words 'refactoring' and 'code quality' in the room. See /pitch for the cheat sheet.