What goes into the cost of an SDR?
Most budgets stop at salary and commission. The real cost of a sales development rep includes everything the company spends to put a productive person in the seat and keep them there. Count these items:
- Base salary. The fixed part of pay. It varies widely by city, experience and company stage.
- Variable pay. Commission or bonus tied to meetings or pipeline. Base plus variable at 100% of target is called on-target earnings (OTE).
- Employer taxes. In the US, the employer pays Social Security (6.2%) and Medicare (1.45%) on wages, plus federal and state unemployment taxes.
- Benefits. Health insurance, retirement contributions and other perks.
- Tools and data. A CRM seat, sales engagement software, contact data, email verification and sending inboxes. Data tools such as Apollo.io charge per user, with credits for contact data.
- Recruiting and onboarding. Agency fees, or the internal hours spent sourcing, interviewing and training.
- Management time. Coaching, call reviews, pipeline meetings and one-to-ones, usually from a founder or sales manager whose time is expensive.
- Ramp. The months between the start date and full productivity, when you pay full cost for partial output.
- Turnover. When an SDR leaves, you pay for recruiting and ramp again and lose output in between.
Where to check the salary, benefits and tax lines
There is no official salary series for SDRs, so every salary on this page is a labeled assumption. These official sources help you test your own numbers:
- Salary: the Bureau of Labor Statistics publishes wages by occupation, not by job title, and has no SDR category. The nearest are broad groups in its occupational wage tables (OEWS), such as sales representatives of services, which mix junior and senior, quota-carrying reps; the BLS sales occupations overview explains how the related roles differ. Use them as a sanity check, then compare current job postings for your city and stage. Several states, among them California, Colorado, New York and Washington, require pay ranges in job postings.
- Benefits: the BLS Employer Costs for Employee Compensation release splits employer spending into wages, insurance, retirement and legally required benefits every quarter. Use it to check that your benefits line is in proportion to the salary.
- Payroll taxes: the employer pays 6.2% Social Security on wages up to an annual wage base and 1.45% Medicare on all wages (IRS: understanding employment taxes). Federal unemployment tax is 6.0% on the first $7,000 of each employee's wages, usually cut to 0.6%, or $42 a year, by the credit for paying state unemployment tax (IRS Topic 759). State rates vary, so the $600 below is an assumption covering both.
Worked example: what one SDR costs in year one
The example assumes a US-based SDR at an early-stage B2B company. Every line is an assumption, not a market statistic. Replace the numbers with your own; the structure stays the same.
| Cost item | Assumption | Year-one cost |
|---|---|---|
| Base salary | $60,000 a year | $60,000 |
| Variable pay | $25,000 at target; $20,000 actually paid because of the ramp | $20,000 |
| Employer payroll taxes | 7.65% Social Security and Medicare on $80,000, plus $600 of unemployment taxes | $6,720 |
| Benefits | Health insurance, retirement match and perks | $12,000 |
| Tools and data | CRM seat, engagement tool, contact data, verification and inboxes at $450 a month | $5,400 |
| Equipment and training | Laptop, software and a sales course | $2,000 |
| Recruiting | Agency fee of 15% of base, or the same value in internal time | $9,000 |
| Management time | 3 hours a week for 46 weeks at $100 an hour | $13,800 |
| Total | Fully loaded, year one | $128,920 |
What do the tools and management lines cover?
These two lines are the ones most often guessed. Here is what sits behind the example's $450 a month of tools and three hours a week of management. The amounts are assumptions; check current vendor pricing before you budget.
| Tool | What it does | Assumed per month |
|---|---|---|
| CRM seat | Accounts, contacts, deals and activity history | $90 |
| Sales engagement seat | Sequences, tasks and email tracking | $110 |
| Contact data and enrichment | Finding companies, people and emails, often sold per seat with credits | $150 |
| Email verification | Checking addresses before each batch | $30 |
| Sending domains and inboxes | Separate, warmed-up inboxes so prospecting never touches your main domain | $70 |
| Total | $450 |
Where the three hours of management go
In practice the time is heavier in the first two months and lighter afterwards; the example spreads it evenly. If the manager is a founder, value the hour at what the founder's time is worth elsewhere, never at zero. At $75, $100 and $150 an hour, the year-one total becomes $125,470, $128,920 and $135,820, and the cost per held meeting (see the next section) about $1,162, $1,194 and $1,258.
- Weekly one-to-one (45 minutes): pipeline, blockers and next week's targets.
- Reviewing emails and calls (60 minutes): reading a sample of sent emails and replies, or listening to calls, and giving feedback.
- Pipeline review (30 minutes): checking whether held meetings became opportunities, and why not.
- List and message fixes (45 minutes): adjusting targeting, approving new copy, answering product questions.
How does ramp time change the cost per meeting?
A new SDR does not book meetings in the first weeks. They learn the product, the market and the tools, build lists and wait for new inboxes to warm up. In our example, the SDR books nothing in month one, a third of the target in month two and two thirds in month three, then works at full pace. We also remove about a month across the year for holidays and time off.
At a full pace of 12 held meetings a month (another assumption), that gives 0 + 4 + 8 in the first quarter and 96 over the eight productive months that follow: 108 held meetings in year one. The table shows how sensitive the result is to the monthly pace.
| Held meetings a month once ramped | Held meetings in year one | Cost per held meeting |
|---|---|---|
| 8 | 72 | $1,791 |
| 12 | 108 | $1,194 |
| 16 | 144 | $895 |
How do you calculate cost per meeting?
That last number is the one to compare with what a customer is worth. If the first-year gross profit from a customer is lower, the SDR does not pay back in year one, however full the calendar looks.
Add up every cost for the period
Use the full list above for the period you measure, usually a quarter or a year. Include management time, even when the manager is a founder who is not paid by the hour.
Count meetings held, not booked
No-shows produce nothing and should not lower your cost per meeting. Define a held meeting in writing (right company, right person, a real discussion of the problem) so the count stays honest.
Divide
Cost per held meeting = total cost for the period ÷ meetings held in the period. In the example: $128,920 ÷ 108 = about $1,194.
Carry it down the funnel
Divide by your conversion rates to get the cost per opportunity and per customer. If one held meeting in four becomes a qualified opportunity and one opportunity in four closes (both assumptions), each new customer costs about $19,100 in SDR spend: $1,194 ÷ 0.25 ÷ 0.25.
Reach companies with a reason to buy this week
Startories finds the buying signal, verifies the decision-maker and runs the outreach until they book a call.
What cost per meeting can you afford?
A cost per meeting means little until you set it against what a meeting is worth to you. Work that out from three numbers you know or can estimate: first-year contract value, gross margin, and the share of held meetings that become customers.
Affordable cost per held meeting = first-year contract value × gross margin × share of held meetings that close. The table assumes an 80% gross margin and the funnel above, where one held meeting in 16 becomes a customer (0.25 × 0.25). Both are assumptions.
| First-year contract value | Gross profit per customer | Affordable cost per held meeting | Does the $1,194 SDR pay back in year one? |
|---|---|---|---|
| $6,000 | $4,800 | $300 | No |
| $12,000 | $9,600 | $600 | No |
| $24,000 | $19,200 | $1,200 | Only just |
| $48,000 | $38,400 | $2,400 | Yes, with room |
What does SDR turnover add?
SDR is often a stepping-stone role: good SDRs get promoted to account executive, and others move on. Whatever your own history, plan for a departure. Assume the SDR in our example leaves after 18 months, the seat stays empty for two months while you hire, and the replacement ramps the same way.
The direct cost is another $9,000 recruiting fee plus about 20 hours of interviews at $100 an hour, so roughly $11,000. The bigger cost is output: two empty months (24 meetings) plus the ramp shortfall (12 + 8 + 4 = 24 meetings) adds up to about 48 held meetings lost, or four months of a fully ramped SDR.
The practical lesson: write down what works (target lists, messaging, objection notes) in a shared place, so a replacement ramps faster and the knowledge does not leave with the person.
What does year two cost, with and without turnover?
Year one carries the recruiting fee and the ramp, so it overstates the steady-state cost. Year two shows what a ramped SDR costs, and how much a departure takes back. Assumptions: a 3% raise to a $61,800 base, variable pay at target ($25,000), the same benefits, tools and unemployment taxes, $500 of equipment, and management down to two hours a week.
In the second column, the SDR leaves after month 18, as in the section above: 66 meetings in six months (half a month off), two empty months, then a replacement at a $60,000 base who earns $3,000 of variable pay while ramping and books 0, 4, 8 and 12 meetings in months 21 to 24. Benefits run $1,000 a month per person, unemployment taxes are paid for two people, the replacement needs $1,000 of training, and management is two hours a week for the first SDR (24 weeks) and three for the replacement (17 weeks).
| SDR stays | SDR leaves after month 18 | |
|---|---|---|
| Salary and variable pay | $86,800 | $66,400 for two people, each part of the year |
| Taxes, benefits, tools and equipment | $25,140 | $23,180 |
| Recruiting and interviews | $0 | $11,000 |
| Management time at $100 an hour | $9,200 | $9,900 |
| Total cost | $121,140 | $110,480 |
| Held meetings | 132 (11 months at 12) | 90 (66 + 0 + 24) |
| Cost per held meeting | About $918 | About $1,228 |
In-house, outsourced or AI SDR: how do the costs compare?
Outsourced SDR agencies usually charge a monthly retainer, a fee per meeting or a mix of both, often with a setup fee and a minimum term. AI SDR tools range from published plans, such as Reply.io's Jason AI SDR pricing, to quote-based contracts, as described in 11x's pricing overview. To compare them fairly, use the same formula for each: full cost, including your own time, divided by meetings held.
The table uses two more assumptions: an agency retainer of $5,000 a month plus one hour a week of your time, and an AI SDR on the Startories Growth plan ($499 a month) plus three hours a week of your time reviewing targeting, emails and replies. Your time is valued at $100 an hour in both cases.
| In-house SDR | Outsourced agency | AI SDR | |
|---|---|---|---|
| Year-one cost | $128,920 | $64,600 | $19,788 |
| Held meetings needed to match $1,194 per meeting | 108 | 54 | 17 |
| What you manage | Hiring, coaching, tools, ramp | Briefing, feedback, quality checks | Targeting, approvals, replies from qualified leads |
| Time to first meetings | Hiring time plus a three-month ramp | After the agency onboarding | After setup and inbox warm-up |
| Main risk | Slow ramp and turnover | Generic messaging shared across clients | Poor targeting sent quickly if nobody reviews it |
| Strongest when | Calls, complex deals and judgment matter | You need capacity fast and can brief well | A clear niche, email-led outreach, someone to take the calls |
Does a contractor or part-time SDR cost less?
A contractor takes payroll taxes and benefits off your side, and a part-time SDR halves the salary. Neither removes the ramp or the tools, and management time does not shrink in proportion to the hours worked. Whether someone can be paid as a contractor is also not a free choice: it depends on whether you control only the result of the work or also how it is done, as the IRS explains. An SDR who works your hours with your scripts and tools can look like an employee under that test. Run the same cost-per-held-meeting formula on each option before you choose.
How can you lower your cost per meeting?
- Narrow the profile. Fewer, better-fitting accounts raise the share of conversations that become meetings. Start with an ideal customer profile template.
- Reach out for a reason. Contacting companies right after a relevant event gives every email a purpose. See buying signals with examples.
- Rank before you send. A simple lead scoring model keeps reps and tools on the best accounts first.
- Protect deliverability. Emails that land in spam cost the same and produce nothing. Our cold email deliverability guide covers the setup.
- Shorten the ramp. Give a new SDR a written playbook, a working list and approved messaging on day one.
- Measure held meetings by source. Cut the lists, signals and messages that use time and never produce meetings.
How to start
Copy the worked example into a spreadsheet, replace every assumption with your own numbers, and work out the cost per held meeting you can afford given your deal size. That number is your benchmark for any hire, agency or tool.
If an AI SDR fits your case, Startories handles signal detection, verified contacts, writing, sending and reply sorting in one plan, and reports on meetings rather than sends. Plans start at $99 a month, with the first Starter project on a 3-day full-access trial for $1: see pricing, or compare options in our list of the best AI SDR tools.
Frequently asked questions
What is a typical SDR salary?
It varies with location, experience and company stage, and pay is usually split between a base salary and a variable part tied to meetings or pipeline. The BLS has no SDR category, so our example assumes a $60,000 base and $25,000 variable at target; check both against current job postings in your market.
What cost per meeting is reasonable for an SDR?
It depends on your deal size, not on an industry average. Multiply first-year contract value by gross margin and by the share of held meetings that become customers. With an 80% margin and one customer per 16 held meetings, a $12,000 contract supports about $600 per held meeting.
What does OTE mean for an SDR?
OTE means on-target earnings: the base salary plus the variable pay an SDR earns at 100% of quota. In our example, OTE is $85,000. Budget for the full OTE plus taxes, benefits and tools, not just the base salary.
How many meetings should an SDR book per month?
There is no universal number: it depends on deal size, market and how you define a meeting. Set the target from your own economics. Our example assumes 12 held meetings a month once ramped, which puts the year-one cost per held meeting at about $1,194.
Is outsourcing SDRs cheaper than hiring?
Often in cash terms, because you skip recruiting, benefits and ramp. Whether it is cheaper per meeting depends on how many qualified meetings the agency delivers. Divide the full fee, plus your own time, by meetings held, and compare it with your in-house number.
Is an AI SDR cheaper than a human SDR?
The subscription is usually far below a salary, but count the time you spend reviewing targeting and replies. In our example, an AI SDR plus three hours of weekly review costs about $19,800 a year and matches the human cost per meeting at 17 held meetings.
Sources
- BLS: Occupational Employment and Wage Statistics (OEWS) tables
- BLS: Occupational Outlook Handbook, sales occupations
- BLS: Employer Costs for Employee Compensation
- IRS: Understanding employment taxes
- IRS: Topic no. 759, Form 940 (FUTA tax)
- IRS: Independent contractor defined
- Reply.io: Jason AI SDR pricing
- 11x: Pricing overview
- Apollo.io: Pricing