Technical Debt Ratio Calculator

Technical Debt Ratio (TDR) provides a clear, quantifiable metric that translates technical concerns into business language. By expressing debt as a percentage of development investment, CTOs and engineering managers can have data-driven conversations with finance and executive teams about the true cost of accumulated technical shortcuts.

SQALE tooling defaults and practitioner consensus commonly place target TDR between 5-10%. While no peer-reviewed studies establish universal thresholds, teams often report that ratios above 10% correlate with slower feature delivery, increased defect rates, and difficulty onboarding new engineers. Use this calculator to establish your baseline and track progress over time. The built-in cost estimator helps you translate team composition (team size × loaded salary × active months) into a defensible development investment, while the severity breakdown and scenario planner pinpoint which remediation work should land first and how long it will take to hit your target.

Load the sample data to explore a realistic scenario for a mid-size engineering team. With $125,000 in estimated remediation costs against a $1.8M development investment, the TDR comes out to approximately 6.94% - within the acceptable range but trending toward the warning threshold.

This scenario suggests allocating 10-20% of sprint capacity to systematic debt reduction (a common practitioner guideline - adjust based on your team's velocity trends and business constraints). The severity breakdown shows most debt in critical and high categories, signaling where focus should land first. With the scenario planner, dedicating 20% capacity translates into roughly $35k/month of remediation - enough to reach a 7% target in under five months. Without intervention, the ratio could drift above 10%, where velocity impacts become material and technical decisions start compounding maintenance burden.

Remediation cost should capture the engineering effort required to eliminate identified technical debt. Start with SQALE analysis or your own backlog sizing exercises - translate hours into dollars by multiplying by your team's loaded hourly rate (salary + benefits + overhead). Categorize each debt item by severity so you can weigh the highest-risk remediation work first, then plug those totals into the scenario planner to estimate timelines with realistic capacity constraints.

For manual estimation, identify debt epics in your backlog, estimate the effort in person-weeks, and multiply by your average developer cost. Be conservative but realistic - underestimating remediation cost masks the true burden and delays necessary investment decisions.

When TDR exceeds 10%, you have a compelling case for dedicated remediation sprints. Present the ratio alongside velocity trends and incident frequency to show how technical debt correlates with business impact. Finance teams understand percentages - a 15% TDR means $0.15 of every development dollar is spent fixing past shortcuts.

Track TDR quarterly to demonstrate progress. As the ratio drops, correlate improvements with faster delivery cycles and reduced operational incidents. Highlight movements in the severity mix - show stakeholders how reducing critical/high debt translates into tangible reliability and velocity wins - and keep scenario projections handy to defend ongoing remediation capacity.