Are you about to embark on your Ruby on Rails development journey? Or maybe are you an existing Ruby on Rails application owner looking to enhance your application with new features. Either way, you are eager to harness the incredible potential of this dynamic web framework but overwhelmed by questions like, “What will it cost?” and “What impacts the cost?”

You’re not alone. Building a Ruby on Rails application is an exciting endeavour, but navigating the landscape of cost can be daunting.

With over a decade of experience in the software industry, we at Mallow have seen all types of RoR projects and have a firm understanding of how much applications cost to develop. We have firsthand experience in developing cost-effective Ruby on Rails applications that don’t cut corners from a performance or user experience standpoint. And while we specialise in outsourced development, we know that’s not the only option you have. Therefore in this article, we will provide you with information about both insourcing and outsourcing costs.

In this article, you will learn the cost factors associated with building a Ruby on Rails application, helping you to make an informed budgeting decision. Whether you’re starting a new project or seeking to optimise an existing RoR application, this article will serve as your roadmap to understanding how much your RoR application might cost.

What factors affect the cost of Ruby on Rails application development?

  • Project Complexity – The complexity of your application, including its features, functionality, and integrations, is a significant cost driver. More complex projects typically require more development time and resources, leading to a higher cost.
  • Development Team – The size and experience of your development team play a crucial role in determining costs. Highly skilled developers may command higher salaries, and the number of developers needed for your project can impact costs.
  • Project Management – Sometimes RoR projects have a lot of moving parts. Or you may wish to have a project manager be your partner in making sure the project is hitting the deadlines you require. If a project manager is a part of your development team, this will increase the cost of building your application.
  • Data Storage and Processing – The amount of data your application handles and processes can affect costs. Large-scale applications with extensive data storage and processing needs may require additional infrastructure and resources.
  • Scalability Requirements – If your application needs to handle a large number of users or scale rapidly, you’ll need to plan for scalable infrastructure, which can affect costs.
  • Design and User Experience – High-quality design and a superior user experience can add to the cost of development, as it may require the involvement of designers and user experience experts.
  • Testing and Quality Assurance – Rigorous testing, quality assurance, and security measures are crucial but can contribute to development costs. In custom software development projects, it is often quite common to allocate approximately 10-20% of your total budget for comprehensive quality testing and assurance to ensure a robust and reliable end product.
  • Project Timeline – Tight deadlines or a need for expedited development can lead to higher costs due to the need for more resources or overtime work.
  • Maintenance and Support – Consider ongoing maintenance and support costs, including bug fixes, updates, and security patches, as these are essential for the long-term health of the application. Consider ongoing maintenance and support costs, including bug fixes, updates, and security patches, as these are essential for the long-term health of the application. It’s crucial to allocate a separate budget for these maintenance and support activities as an integral part of your application development plan. As your application is used by a growing user base, issues and bugs may emerge. Allocating a budget for bug fixes and enhancements ensures that you can address these issues promptly and improve the user experience.
  • Regulatory Compliance – If your application must comply with specific regulations or standards, additional development work may be required, impacting costs.
  • Geographic Location – The location of your development team can impact costs, as the cost of living and hiring rates vary by region. Developers in regions with a high cost of living, such as San Francisco, New York City, or London, typically command higher salaries to maintain their quality of life. This can significantly drive up resource costs.  If you’re hiring remote developers from other countries, exchange rates can impact the overall cost. Currency fluctuations can make salaries and contractor rates more or less expensive for your organisation. The rise of remote work has also influenced cost dynamics. Companies can now tap into global talent pools, which might provide cost savings if they hire developers from regions with lower resource costs.

How does geographic location impact the cost of in-house developers?

Below is a comparative analysis table with Ruby on Rails developer salary data for various regions, junior, middle-level, and senior positions. For a well-defined idea of the capabilities that each level of develop specializes in, check out: our article on how much does it cost to work on a Ruby on Rails project with Mallow. This will give you an overview of what proficiency a junior, mid-level and senior developer carry with them and how you can shape up that right permutation and combination of expertise for your application development efficiently.

RegionJunior developer (Annual Salary)Middle-Level developer (Annual Salary)Senior developer (Annual Salary)
North America$45,000 – $60,000$60,000 – $98,000$98,000 – $160,000
United Kingdom$35,000 – $60,000$60,000 – $100,000$100,000 – $150,000
Canada$50,000 – $80,000$80,000 – $120,000$120,000 – $180,000
Western Europe$35,000 – $60,000$60,000 – $100,000$100,000 – $150,000
Eastern Europe$20,000 – $42,000$42,000 – $72,000$72,000 – $100,000
South America$15,000 – $30,000$30,000 – $50,000$50,000 – $80,000
Asia$8,000 – $20,000$20,000 – $40,000$40,000 – $70,000
Africa$7,000 – $15,000$15,000 – $35,000$35,000 – $70,000
Australia$50,000 – $80,000$80,000 – $120,000$120,000 – $180,000
Middle East$20,000 – $45,000$45,000 – $75,000$75,000 – $120,000

Please note that the values are approximate and can vary based on several factors, including the cost of living, demand for developers, and economic conditions. It’s advisable to consult up-to-date salary surveys and local job market data for precise figures. These salary ranges are approximate and may change over time. It’s essential to consult the most recent salary surveys and job market data for accurate and up-to-date information when hiring Ruby on Rails developers in specific regions and at different skill levels.

How does geographic location impact the cost of outsourced developers?

Below mentioned is a comprehensive table with Ruby on Rails developer outsourcing rates across the globe on an hourly basis:

RegionJunior Developer (Annual outsourcing cost)Middle Level Developer (Annual outsourcing cost)Senior Developer (Annual outsourcing cost)
North America$60,000 – $80,000$80,000 – $110,000$110,000 – $150,000
Canada$50,000 – $70,000$70,000 – $100,000$100,000 – $150,000
Western Europe$40,000 – $60,000$60,000 – $80,000$80,000 – $120,000
Eastern Europe$20,000 – $40,000$40,000 – $60,000$60,000 – $90,000
South America$15,000 – $30,000$30,000 – $45,000$45,000 – $75,000
Asia (India)$10,000 – $20,000$20,000 – $30,000$30,000 – $50,000
Asia (Philippines)$8,000 – $18,000$18,000 – $28,000$28,000 – $45,000
Africa (Nigeria)$7,000 – $15,000$15,000 – $25,000$25,000 – $40,000
Middle East (UAE)$15,000 – $30,000$30,000 – $45,000$45,000 – $70,000
Australia$50,000 – $70,000$70,000 – $100,000$100,000 – $150,000

When it comes to cost, how does Ruby on Rails compare to other frameworks?

  • Supports you for rapid development – Ruby on Rails is renowned for its “convention over configuration” approach. It provides a set of best practices and pre-defined conventions, reducing the need for developers to write extensive boilerplate code. This accelerates development and lowers costs. Ruby on Rails encourages a modular design and the use of reusable components. Developers can leverage existing libraries and gems to save time and effort, reducing costs associated with writing custom code from scratch.
  • Is a open source – Ruby on Rails is an open-source framework, which means it’s free to use. This eliminates the cost of licensing, making it an attractive choice for cost-conscious projects.
  • Enhanced developer productivity – The Ruby programming language is known for its developer-friendly syntax, which enhances programmer productivity. This, in turn, leads to quicker development cycles and cost savings.
  • Possess active developer community – Ruby on Rails boasts a large and active developer community. This community support allows you to easily find pre-built solutions, code snippets, and troubleshooting advice, reducing development time and costs.
  • Enhanced security features – Ruby on Rails has built-in security features that help protect applications against common web vulnerabilities. This reduces the need for extensive custom security development and lowers the risk of security breaches, which can be costly to remediate.
  • Bears scalability – Ruby on Rails is designed to scale efficiently, allowing applications to grow as needed without significant redevelopment costs. This scalability ensures that your application can handle increasing user loads without substantial rework.
  • Flexible testing frameworks – Ruby on Rails offers robust testing frameworks like RSpec and Minitest, which facilitate in-built comprehensive testcase options . This helps identify and rectify issues early in the development process, reducing the cost of fixing bugs later.
  • Ready-to-use wide range of plugins – The Ruby on Rails community has created a vast library of gems, which are reusable code libraries. These gems save time and effort in development and reduce the overall cost of a project.
  • Easy to maintain – Ruby on Rails applications’ clear and readable codebase makes maintenance more efficient and cost-effective. Developers can quickly understand and update code, reducing maintenance expenses.

How much does developing a Ruby on Rails application cost?

When evaluating your choices for handling the development work, a key consideration is determining who will execute the tasks. You essentially have two primary options: assembling an internal team or enlisting the services of an external, outsourced team.

When it comes to deciding between these two options, it’s critical to understand some cost considerations:

Recruitment costs – Finding and hiring in-house developers comes with recruitment costs, including expenses related to job listings, interviews, background checks, and any external recruiting agencies or headhunters you engage. With outsourcing, you don’t have the same recruiting costs.

Overhead – When considering the choice between maintaining an in-house development team and opting for outsourcing, it’s essential to weigh the associated costs. In-house teams come with overhead costs like office rent, utilities, office supplies, and administrative staff. You’ll need to provide office space, workstations, and equipment, including computers, software licenses, and other essential development tools. The onboarding and training period for in-house developers can entail additional time and expenses, involving familiarizing them with your organization’s specific processes, tools, and technologies.

On the other hand, outsourcing presents a different financial landscape. When you choose to outsource development tasks to external providers, you eliminate the need for in-house office space and equipment. Instead, you pay the outsourcing partner for their services, which often include all the necessary resources. Additionally, recruitment, onboarding, and training costs for in-house developers are avoided when outsourcing, as the external team is already proficient in the required technologies.

Base salary – The primary cost is the base salary of the Ruby on Rails developers. Salaries can vary widely based on experience, location, and the specific skill set required. In larger cities or tech hubs, you might need to offer higher salaries to attract top talent.

In addition to the base salary, you’ll need to budget for benefits and perks. These can include health insurance, retirement plans, bonuses, stock options, and other incentives to attract and retain skilled developers. Employing in-house staff entails obligations like payroll taxes, employment contracts, and compliance with labour laws, which can have financial implications.

Staffing Flexibility – When considering in-house development for your application, it’s crucial to acknowledge that the pace of development can vary. There are times when you need to move deliberately, ensuring precision and attention to detail, and other instances when rapid progress is essential to meet tight deadlines or seize market opportunities. Staffing flexibility is paramount – the ability to adjust your team size and expertise to align with the changing needs of your project is a valuable asset. 

Below is a simplified table outlining approximate cost ranges on how much it would cost for Ruby on Rails applications of varied sizes when developed using different options like in-house or outsourcing:

Application LevelIn-House Expertise (Approx. Cost)Outsourcing (Approx. Cost)
Basic MVP$50,000 – $150,000$20,000 – $40,000
Medium-sized Application$150,000 – $500,000$60,000 – $150,000
Enterprise-level Application$500,000 – $2,000,000+$200,000 – $1,000,000+

Please note that these cost estimates are approximate and can vary widely based on factors like the complexity of features, the size of the development team, geographical location, developer skill levels, project duration, and any additional services required (e.g., design, QA, ongoing maintenance).

How do outsourced application development companies structure their pricing?

Now that we’ve gained a thorough grasp of the components involved in the construction of a Ruby on Rails application and the corresponding expenses, a pivotal query arises: Is the cost justifiable? To provide a clear answer, it’s imperative to explore the considerations that application development firms consider when establishing the fees they levy for their offerings.

If after going through the above article, you feel like outsourcing is the right option for you then, be sure to review the article focusing on how application development companies arrive at their pricing structures. This resource will offer an in-depth exploration of the methodologies these firms employ to determine their costs, shedding light on the pricing dynamics prevalent in the industry.

Still feeling unsure about where you need to take your next step? Feel free to reach out to our team.



Sathish is an accomplished Project Manager at Mallow, leveraging his exceptional business analysis skills to drive success. With over 8 years of experience in the field, he brings a wealth of expertise to his role, consistently delivering outstanding results. Known for his meticulous attention to detail and strategic thinking, Sathish has successfully spearheaded numerous projects, ensuring timely completion and exceeding client expectations. Outside of work, he cherishes his time with family, often seen embarking on exciting travels together.