For me, the answer comes down to two questions: How much of what you know about the character are you going to use in the text? And what does story structure dictate with respect to how much time you can spend on character development and other aspects of the story such as the conflict?

First question:

I'd like to differentiate between how much you show about the character in the story and how much you know about the character in total.

I.e. there's character development in the text, and there's character development "beside" the text. And how much of each do you need to do?

If you put everything you know about your character in the story, one of two problems will likely occur.

If you have a lot of info about your character and put everything in, the story risks becoming bloated and you probably deny the reader any "imagination between the lines".

If on the other hand, your story is well sized, but you don't know more about your character than what you have put in the story, the risk is there are no "hidden depths" in the story. The character risks becoming boring and flat.

Someone once told me you should know 100 times more about your character than what you put in the text. I am not sure that's good or bad advice. I guess it comes down to how you count to 100.

But, regardless, you should know more about your character than what you put in the text, and the text should have a "sane" word count. Or, in fact, a sane structure, meaning, in most cases, you cannot spend the whole story detailing the character's backstory and hope to sell it as a story worth reading.

Which brings us to question two:

How much time can you spend on character development with respect to story structure?

This question has two answers. First, and foremost, every word about your character, her actions, thoughts, and emotions should reflect who she is, where she's been and where she's going, so you can spend 100% of your story developing your characters.

Especially since story plot and character arc should be the same. Or, to put it another way: the external story should be a metaphor for the character's internal development.

Regardless: Character development should equal story plot.

Another way to answer the question is to look at story structure and where it will be dominated by conflict and plot and where it will be dominated by introducing the story (and character).

Let's boil it down to actual word counts.

If an average novel is 100 000 words (you can recalculate for other sizes) the first plot point should happen at about 20-25% (20 000 - 25 000 words into the story).

This is when your characters are being slapped with a catastrophe that will require them to start acting. From now on there's very little room for character development in the sense that you spend time introducing a character. You still have actions and mannerisms, and of course, there should be some low points where someone could tell a story from their past.

But you risk being confusing if your readers don't know who the characters are at this point.

Confusing, or boring. Because reading about a car accident with someone you don't know is like reading a newspaper article, while reading about someone you know being in the same accident is a completely different thing. You want the latter when you write the "car crash" that is the first plot point.

In fact, your reader should probably know all your major characters already at the "inciting event" (which in my parlance occurs halfway into the first act, i.e. at 10% - 12.5%, 10 000 to 12 500 words into the story).

The inciting event is the point where the characters are being affected by the story directly for the first time, so up to that point your writing does not have to be so much about the conflict. You can spend more time on the characters instead.

Summary

10 000 to 25 000 words to develop your characters to the point where the reader cares what happens to them in a car crash isn't much at all. And at the same time, since you should know more about your characters than what you put in the text you still have to have a sheet of info even on the most minor of characters.

I like to give every character an ambition and a goal, even the cab driver that only transports the main character from point A to B. That way I can figure out if s/he's an angry cab driver, a happy cab driver or if s/he's daydreaming about a completely different place.

From there you could "draw a line" to the most fleshed out characters you have (the protagonist and the antagonist?) and put all the other characters somewhere in between.

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