Global Offshore Software Development Rates by Country in 2023

13 January 2023 • 28 min read

CEO and Co-Founder at Softermii

The rapid growth of the technology behind your business is no longer limited to your country of residence, location, or region. Today, you can hire developers worldwide and cover all your company’s needs for a reasonable offshore software development cost.

Software outsourcing opens many business possibilities, like access to a bigger talent pool and cutting expenses. Moreover, offshore software development reduces HR workload, as remote teams regularly have all the team units that you may need.

When you hire an offshore development team, you also get analysts, marketing managers, product and project managers, architects, etc. As a result, the project is fully operated, and you can rely upon the outsourcing team.

Yet, a question appears: how much does it cost to hire offshore development specialists or a team? What are software development rates? It depends on various factors. And the first and most important one is the country of origin of the developers.

In this article we will discuss offshore software development hourly rates, the average cost of software development services, software development rates by country with comparison, selecting the right offshore vendor, and the best countries to outsource software development.

Softermii, a reliable software development vendor with an extensive team and numerous successful projects, will navigate you through the offshore dev costs. We have a proven record of delivering robust software like Radiant, Soundit, and Streamotion, and thus can leverage our expertise to help you choose the best development pricing for your business.

The Average Software Development Rates Worldwide

Software development is one of the most growing industries. In 2018, the number of software developers was 23 million, and it is expected that by the end of 2024, it will grow to 28.7 million.

Therefore, the market itself will also grow. Only the application development market promises to demonstrate a CAGR growth of 25.54% from 2023 to 2030.

The industry is skyrocketing, and software development services are growing in demand. Therefore, the rates also change. Let’s analyze our data for offshore software development rates comparison to understand them better. Below, we will describe the key factors that influence development rates.

What Determines the Offshore Software Development Cost in Each Country?

Each region has important factors that influence its software development price range. These include:

Salary Range

The average and median salaries in the country determine the salary range. When comparing salaries from one region to another, you must convert them into a single international currency.

Cost of Living

In general, if a country’s cost of living and purchasing power is higher than another’s, its software development rates will also be higher. Countries with lower costs of living will have lower development prices.

Taxation System

Each country’s tax legislation is unique. Some countries are more lenient towards the IT industry, while others impose higher taxes. It can add up to higher overall software development costs.

Supply and Demand

As with any industry, high demand and limited supply will increase wages and intense competition for available resources. It is especially noticeable in the United States, which is experiencing a shortage of IT experts.

Programming Languages

Among all the programming languages on the market, some have an extensive community and are well-accepted. Along with them, some technologies are still developing and require particular expertise for implementation. Because of this, the cost for offshore developers will be higher for some coding languages and skills.

Developer Expertise and Experience

It won’t be surprising that the developer’s experience influences the software development cost. For instance, a junior engineer cannot earn as much as a senior specialist with over five-year expertise and a more vast skillset.

Project Complexity

The overall project complexity significantly impacts the final cost of your software. The number of features to implement, the tech stack to use, and timelines can alter your budget. Yet, offshore development pricing is more reasonable, as the payroll process is your vendor’s responsibility.

Average Software Development Hourly Rates by Region

Depending on the points mentioned above, offshore development rates will also differ. However, it does not mean that the service quality will depend only on the prices.

When you hire a team of developers from a region with lower hourly rates, the job quality may still be high. A low rate can be explained by the simplified taxation system or the low cost of living.

Region	Average Hourly Rate
North America	$41 to $71
Western Europe	$20 to $35
Eastern Europe	$13 to $18
Latin America	$4 to $20
Ukraine	$11 to $16

According to Indeed, SalaryExpert, and Talent.com

Software Developer Hourly Rate in the US

The software development hourly rate in the United States is among the highest, ranging from $41 to $71 per hour. The total cost, including taxes and benefits, can range from $85k to $148k per year on an annual salary.

On average, 78% of this pay is the net salary, with the remaining 22% representing taxes and benefits. Tax rates vary from state to state, but it is 21.7% on average.

Although it is more expensive, there are numerous advantages to hiring in the United States.

For starters, you will be dealing with developers who speak fluent English, so risks, such as cross-cultural miscommunications or language barriers, are unlikely.

Furthermore, you will have better control and coordination because you will be in the same or very similar time zones in the United States. You will also have the opportunity to meet people on-site and become personal acquaintances.

The following are the offshore software development costs in some of the largest US tech cities:

City	Software Engineer	Web Developer
San Francisco	$49.57	$33.91
Los Angeles	$44.43	$30.39
New York	$46.94	$32.11
Boston	$46.54	$31.83
Chicago	$43.91	$30.04
Seattle	$45.50	$31.12

Average hourly rates in the United States, Indeed

Software Developer Hourly Rate in Latin America

Latin American countries can be a good choice for companies looking to nearshore their software development because of their geographic proximity and overlap in working hours. It enables businesses to manage teams more efficiently and communicate more quickly. Besides, national governments have begun to invest in technology education and IT infrastructures to grow the industry.

The average offshore developer rates can range between $4 and $20 per hour, a reasonable rate in exchange for competitive talent and convenient outsourcing locations. Because there is no single dominant country in the region’s IT industry, the rates are comparable across the board.

Even Brazil, regarded as one of the top 50 most advanced digital nations, has relatively average rates compared to other countries. It provides a significant cost advantage over other regions, but outsourcing software development costs should be one of many considerations.

The top outsourcing countries in this region, as well as their average hourly rates, are as follows:

Countries	Software Engineer	Web Developer
Brazil	$7.35	$3.54
Argentina	$10.72	$8.79
Mexico	$14.21	$11.63
Colombia	$8.59	$6.81
Chile	$19.85	$15.6
Peru	$10.95	$8.43

According to Talent.com and SalaryExpert

Here is a brief overview of the most significant IT countries in Latin America:

Brazil

Despite being one of the most digitally advanced countries, Brazil offers reasonable software developer hourly rates: $4–7 on average. This region is an attractive offshoring destination, with about 2.8% of all workforce being STEM (science, technology, engineering, and mathematics) specialists.

Argentina

Like Brazil, Argentina offers an extensive tech talent pool with the $9–$11 hourly rate outsourcing developers. Here you will find the best Java, Python, and SQL specialists at affordable prices.

Offshore Software Development Hourly Rates in Asia

Asia is now growing as a region with a professional approach to software development. The market has the two biggest tech hubs in India and China.

However, considering the size of the whole region and the total number of developers, the whole market should be divided into three major directions:

East (China as the most prominent representative in development)
South (Bangladesh, India, and Sri Lanka as the most prominent representatives in development)
Central Asia (Kazakhstan and Uzbekistan as the most prominent representatives in development)

Only in China, the overall revenue in the software development industry is expected to grow by 6.7% in the upcoming five years, reaching $1.3 trillion.

Countries	Average hourly rate
China	$24.76
Bangladesh	$4.73
India	$5.32
Nepal	$2.14
Sri Lanka	$4.61
Kazakhstan	$8.35
Uzbekistan	$6.5

According to Payscale, SalaryExpert, and Talent.com

Look at the most prominent tech hubs in this region:

China

As you can see, the cost of software development services in China is slightly higher than in other Asian countries. But the price is justified since the country offers numerous highly qualified specialists. The only concern that may arise is the language barrier.

India

India probably offers the lowest rates for offshore software development. Yet, you can find many qualified experts here. The most common technologies in this country are Java, C++, and Python.

Offshore Software Development Hourly Rates in Africa

Software development is growing more popular in all regions. Africa is one of them. Recently, Africa was not included in the regions with the highest number of software developers, but the situation has changed.

The e-Conomy Africa 2020 report shows that Africa’s IT business promises to reach $180 billion by 2025. It will show 5.2% of GDP. By the end of 2050, the industry will be expected to demonstrate $712 billion in revenue, with 8.5% of the continent’s GDP.

As the African region is only entering the software development market, the price range for development is quite low compared to the US and European rates. But with the industry’s rapid rise, the range will also change.

Countries	Average hourly rate
South Africa	$19.85
Morocco	$9.52
Zimbabwe	$7.15
Kenya	$15.94
Nigeria	$8.96

According to Payscale, SalaryExpert, and Talent.com

South Africa

South Africa, like Brazil, is also among the 50 most digitally advanced nations. This country is the top IT hub in Africa. Here you will find experienced specialists and benefit from excellent communication in English.

Offshore Software Development Hourly Rates in Australia and New Zealand

Australia is another software development destination that has raised popularity but can hardly overcome the popularity of the US, Europe, and even Asia. The matter is that Australian time zones are very specific for European and American countries.

Despite this fact, the Australian software development industry still demonstrates impressive results. According to IBIS World research, the industry grows by 3.1% yearly.

Software development rates in Australia and New Zealand are rather high.

Countries	Average hourly rate
Australia	$61.36
New Zealand	$55

According to Talent.com

Software Development Rates in Western Europe

Western Europe is also one of the most expensive software development markets and, at the same time, the best offshore software development countries. This region is nearly as expensive as the United States due to its high cost of living, taxation system, and developer qualifications.

Software development rates per hour can range from $20 to $35, with an average annual salary of $60k. Taxes, insurances, and other legal costs amount to 35% of the overall pay, so you will be paying a significant amount for allowances that aren’t part of the actual net salary.

Western Europe’s primary offshoring locations are France, Germany, the Netherlands, Switzerland, and the United Kingdom. For each location, you should expect to pay the following hourly rates for outsourcing developers:

Countries	Software Engineer	Web Developer
France	$32.23	$27.84
Germany	$35.55	$27.44
The United Kingdom	$30.12	$23.18
Denmark	$31.17	$20.91
The Netherlands	$26.26	$24.62

Average hourly rates in the European Union, Talent.com and Payscale

The United Kingdom

Compared to other Western European countries, the UK is one of the top software development destinations in terms of value for money. Development services are quite affordable here: the average software engineer’s salary is $58,726 annually.

Offshore Software Development Hourly Rates in Eastern Europe

Eastern Europe is well-known for its technological expertise and support of the startup culture. Eastern European developers are often well-versed in C/C++, Java, Javascript, .NET, Python, and other full-stack specialties that attract many foreign clients.

The hourly rates for software engineering services can range between $13 and $18 per hour. The average annual salary ranges from $14k to $25k. This average has a wide range because Poland is one of the most expensive countries in Eastern Europe for software development outsourcing, which can slightly skew the results.

Belarus, the Czech Republic, Hungary, and Ukraine were named the world’s top technology countries in Coursera’s Global Skills Index 2020. Ukraine, in particular, has some of the world’s best developers, ranking 11th in the world according to HackerRank.

Ukrainian developer hourly rate is considered one of the most attractive from the point of view of price and quality. Its IT industry is expanding rapidly and steadily, and it is the leader in IT outsourcing in Eastern Europe.

The following are some of the most common outsourcing countries in the region, along with their average hourly rate for software development:

Location	Average Hourly Rate
Bulgaria	$14.86
Romania	$14.29
Croatia	$13.67
Latvia	$13.85
Estonia	$13.62
Slovakia	$18.03

According to Payscale and SalaryExpert

You may want to know more about:

Poland

Poland is one of the best destinations for software development in Eastern Europe. The cost of offshore software development here is an average of $10.56 per hour. If your tech stack includes Java, SQL, Python, or C++, you’ll definitely find the required expert in Poland.

The overall rates of your development team will depend on the size of the company you’re hiring. All in all, the development vendors can be classified as follows:

Global Software Development Companies

Global software development companies are focused on big enterprises and corporations. Thus, their price tag may impress. However, hiring a global company with local development centers is possible. In this way, the development costs will be lower.

For example, global companies with delivery centers in Ukraine offer $35–$50 per hour.

Large Software Development Companies

The development price is also high here. On average, the hourly rate reaches $150–$300. However, large software development companies also add extra services to this price, making them attractive to many big businesses.

Mid-Size Software Development Companies

Depending on the country of origin, the prices may vary from $20–70 per hour. Of course, some mid-size companies have even higher prices, but you will hardly find one asking for less than $20 per hour.

Small Software Development Companies

The rates of small development companies mainly depend on their location. Even though these companies may work worldwide, their rates still will be average for their country of origin.

Boutique Agencies

The situation is the same as with small development companies. The rate will be higher for projects requiring the highest levels of professionals.

How exactly does the size of the company influence the rates? The bigger the company is, the more people are working there. Global and large software development companies regularly offer better salaries and work conditions. Therefore, they have higher rates as they need to cover these expenses.

However, small software development companies and boutique agencies also have high rates in many cases. They say that the reasons for that are developing a personal approach to each client and needing more time for development than big companies.

It’s always up to you to decide whether to work with a small boutique agency or a global company. Still, make sure you’ve discussed the rates and price project in advance.

Sometimes, you may want to hire a freelancer, not a development company. What are these cases? For example, you need to develop or update some easy projects.

However, cooperation with freelancers is full of risks. Among the most popular ones are the following:

Unclear conditions of cooperation. Always sign a contract or agreement with all details on the IT cooperation model, including the scope of work, rates, and deadlines. Also, indicate that the code and the project are your company’s property.

The quality of work. Before you start working with a freelance developer, you better check their portfolio.

NDA. Always sign an NDA contract with developers if you want to protect your sensitive data.

Hiring a Freelancer vs. Hiring a Company: Pros and Cons

	Freelancer	Companies
Rates	Lower rates	Higher rates
Quality	Depends on the specialist. It’s important to check the work and the results of previous projects.	Depends on the team. As a rule, companies have profiles on Clutch and other websites to check the reviews.
Agreements	Always indicate clear agreements on cooperation. If a freelancer refuses to sign an agreement, it’s better to skip this candidate.	As a rule, companies ask to sign agreements to protect their rights.
Number of employees	For big projects, you need to hire several freelancers. Therefore, you need to find each of them.	Working with a company, you get a team of developers.
Relationship management	You need to manage how the freelancer cooperates with other team members.	Management within a team is the responsibility of the company you hire.
Project management	You need to hire a project manager to control all processes.	Companies usually have a dedicated PM for each team.

Yet, the freelance software development rates are more than attractive. An hourly rate for a freelance software developer will vary depending on different factors, but you can always communicate the price depending on the tasks you need to solve.

How to Choose the Right Offshore Software Development Vendor

As previously stated, you should not hire solely on price when choosing a country to outsource software development. When considering outsourcing costs, the quality of service and developer skills should come first. The phrase “you get what you pay for” is sometimes accurate, as a cheap option does not always equate to finding a dependable and high-quality development team.

Quality-to-Price Ratio

It is sometimes preferable to pay more than less. Often, paying a higher price gets you more experienced and talented developers who know what they’re worth.

Business Environment

Study the country’s taxation and economic systems. You must understand whether working with a company will be easier or more difficult depending on the region in which it is located.

Availability of Qualified Developers

The average rate in the IT industry is heavily influenced by supply and demand. Because there are so few specialists in the United States, companies will have to pay exorbitant fees to hire or retain those individuals.

English and Communication Skills

Communication is crucial, especially if you plan to outsource your development project. Because you cannot meet face to face, you must ensure that every detail is covered and that your team understands exactly what you want. As a result, you should look for a team with at least an intermediate level of English.

Ratings and Previous Projects

Conduct some research and evaluate your prospective team’s completed projects and ratings. Read reviews from previous customers and try to find those that aren’t on their website, as they may delete negative ones. Check out LinkedIn, Glassdoor, and UpWork, where they cannot change or remove any reviews.

How to Save Budget in Offshore Software Development

Сhoosing the lowest rates is not always a good idea: you risk encountering low-quality services and unethical vendors. On the other hand, in some countries, offshore rates for software development are relatively low by default since they are tied to the cost of living in the region.

But how to choose the best rates in terms of price and quality? And how to save your budget at the same time? Here are some tips:

Weight Your Project Requirements

Before hiring a software development company, establish precise requirements for your project. Maybe you just need a few freelancers to tackle the task. Or do you need an extensive dev team? Once you clearly understand what you want to accomplish, you may look for specialists in the region with the skills and experience you require.

Choose the Right Hiring Model

The hiring approach is another thing that will help you save significantly. For example, software development skyrockets in price if you engage in-house employees. On the other hand, if you opt for outsourcing, you can save on hiring and retaining a team.

Leave Room for Unforeseen Expenses

Finally, always hire a software development company, setting aside an extra budget for contingencies. If you spend all the money on your vendor’s services, such things as taxes, commissions, etc., will be beyond your financial capabilities.

Why Is Ukraine the Best Offshore Development Country?

After learning outsourcing rates by country, you probably noticed that Ukraine offers favorable prices for development services. But that’s not the only benefit you can get by offshoring here. There are many more:

Extensive Talent Pool

Ukraine is rich in technical talents. You can choose from around 285,000 IT professionals with various skill sets, levels of expertise, and years of experience. Thus, you can effortlessly find a perfect fit for your project.

Skills Diversity

No matter what technologies you choose for your project, there will be specialists in Ukraine who are well-versed in them. Experiment with blockchain and AI, or stick to the classics like Python and JavaScript with Ukrainian developers.

Time Zone and Cultural Proximity

One of the most important reasons for offshoring software development to Ukraine is cultural proximity and an insignificant difference in time zones. You can be sure of efficient communication and a streamlined development process by outsourcing here.

Softermii: A Reliable Place to Hire Developers for Your Project

It can be challenging to decide in which region or country to hire developers. Rates can vary for several reasons, and some are not always obvious. However, we highlighted a few of them throughout this article.

The cost of living in a region, tax legislation, supply and demand, and average salary range contribute to an hourly rate. Quality and experience can also sometimes be equal in price.

At Softermii, we can provide you with precisely that. Based in Ukraine and operating for over seven years, our team comprises highly educated professionals committed to their projects. Every team member has at least a B2 English level and a bachelor’s or master’s degree in IT, computer science, or a related technical field.

We have extensive experience in popular and specialized technologies that can propel your project to new highs. Also, we offer the best Ukrainian software developer rates so that any company can order our services.

Our vast portfolio includes numerous successful projects in different industries. Some of them are:

Radiant

Radiant is an NFT marketplace our team developed for our client from the US. We integrated minting and catalog features, point cloud, 3D world tours, and audio-conferencing functionalities. Currently, over 12k users enabled their NFT sales within our app.

Soundit

Soundit is an audio-first social network we created for our client from the UAE. It’s also a decentralized platform that includes audio content creation and editing, streaming, live chat, and news feed features. We also enabled users to promote their accounts through advanced algorithms.

Streamotion

Streamotion is an app for Livestream eCommerce. Our team facilitated the selling process by integrating the broadcasting feature, messaging, feed, payments, and product landings. Among our significant achievements is over 20,000 app installs in just two weeks after launch.

IT outsourcing is more than just finding labor; it is also about finding a dependable technical team and bolstering your project with professional expertise. Contact us to learn how to hire experienced software developers and become a part of Ukraine’s ever-growing startup culture.

What are offshore software development rates by country?

Bulgaria, Romania, Croatia, Latvia, Estonia, Slovakia, Ukraine, and Poland on average expect an hourly rate of $32-$74. Offshore software development companies from Brazil, Argentina, Mexico, Colombia, Chile, and Peru expect an hourly rate of $20-$50. African countries expect about $20-$45. Asian offshore software developers expect about $15-$25.

What is the Ukrainian software developer’s hourly rate?

The hourly rate of Ukrainian software developers is about $35–$50. This is a kind of golden mean between cost and quality. That is why Ukrainian developers are so popular for offshore development

Is offshore software development a good thing for business?

In the world, more than 50% of the companies hire offshore programmers to reduce software development costs. Cost savings when hiring offshore developers can reach 30 to 70% depending on the choice of the country where the developers are located.

Which countries for offshore project development do US companies prefer?

Many companies from the United States entrust their IT projects to leading offshore developers from Eastern Europe, in particular Ukraine and Poland. Ukrainian outsourcing companies provide high-quality development services, real-time work, and affordable hourly rates.

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Written by:

Slava Vaniukov