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Offshore Software Development Rates: Comparing by Country and Skills
15 min.

Many companies are now turning towards offshore software development to access more affordable talents. The cost of offshoring software development to a remote team is typically much lower than hiring local talent. Some companies can save as much as 80% or more by sending work overseas.

Yet, more than low-cost offshore developer rates per hour is what makes a country optimal.

ProCoders often ask our clients why they considered particular countries to hire developers before coming to us. Having gotten many replies, we have decided to create this short guide for you!

Therefore, this article, though focused on comparing various outsourcing destinations, also looks at different angles, including how companies can find an influential country or vendor to outsource a project. An offshore software development rates comparison but more critical is the value to be gained by outsourcing a project to any of these countries.

Caesar about outsourcing

Offshore Software Development Rates by Country

In this section, ProCoders picked up no banal options for you. We have done everything to make an exciting overview of software development in general and the average costs of offshore development country by country, depending on the experience level. The information here may surprise you!

Europe

Estonia

Estonia has an estimated 30,000 developers, and the country expects to get 7,000 IT professionals more before 2027. Likewise, at least 140 custom software development companies in Estonia are listed on Clutch. However, the actual number would be way more than that: about 6,000 companies are operating in the Estonian ICT sphere. On GitHub, Estonia has, by far, the highest number of user accounts per $35 000 GDP; that’s 5,000, more than even top western Europe countries, but below that of most long-time members such as Spain or Italy, etc.

The highest contributing factor to Estonia’s growing software development landscape is a conscious enhancement of IT skills. We should keep in mind that many Ukrainian developers became self-employed in Estonia due to the situation which appeared in 2022, which increased the Estonian market size (in 2022, it had grown by 0.4%).

Thus, it is not farfetched to refer to Estonia as Europe’s future Silicon Valley. More so, at least five companies originated from Estonia, and roughly three companies with offices in Estonia appear on the list of 2022 Global Outsourcing 100. All these reasons and including, of course, low offshore software development costs, encourage business leaders to seek Estonian software development companies for outsourcing their projects.

A man with a bad tattoo

Estonia developers collaborate with foreign-based companies very often. Hence, a good knowledge of English is a given for most developers. More so, the similarities between Estonia’s culture and the values across the rest of Europe make it one of the top software development hubs on the continent.

Recently ProCoders relocated its main office from Ukraine to Estonia. The move comes in response to the recent political situation in Ukraine that has affected many businesses operating there. ProCoders decided it was time to re-evaluate its presence in the country and evaluate alternative locations that would provide better access to talent and allow our clients to continue its growth plans without interruption or delay.

Average Hourly Offshore Development Rates

Junior – $18-25

Mid – $30-45

Senior -$50

Check our Rates

Poland

Hardly is there any ranking of top destinations for software development outsourcing worldwide (not just in Europe) that does not include Poland. Poland lists tens of thousands of developers, and by estimation, at least one person in every 100 Polish people is a software developer/software engineer. That makes it an abundant hub for seeking software development talents.

In addition, Poland boasts hundreds of software development companies. Poland is geographically and culturally related.

IT outsourcing in Poland

However, Estonia edges it in terms of offshore software development rates because the rates are higher in Poland despite the fact that the country is less tech-equipped than its neighbor.

Average Hourly Offshore Development Rates

Junior – $20-27

Mid – $35-50

Senior – $65+

Albania

Albania, with an estimated > 7300 IT experts, is one of the countries with a bright interest in IT, Computer Science, or related fields. Albanian young people who have chosen to study computer science over the last ten years have significantly increased this number.

Not many Albanian IT companies are listed on Clutch (only 49). However, it would not be a surprise if among the investors of Albanian companies you would find not only their own local companies like Evolve.al Digital Agency, Logical Albania, etc. but also such IT giants as Microsoft. One of the reasons why investors trust Albanian teams is that Albanian web developers deliver what they promise and meet deadlines.

If you want to build your product with real professionals having advanced engineering skills, Albania will be a good choice not only because of the professionals’ mentality but also because of the pleasant rates for development:

Average Hourly Offshore Development Rates

Junior – $15-23

Mid – $30

Senior – $35+

Portugal

WIth 95 Custom Software Development companies listed on Clutch, Portugal is one of the most popular countries for outsourcing software development. It can be claimed that it has excellent technical skills at competitive rates based on the market size: in 2022, the Portuguese Software Development market size reached 914.4 million euros!
The Portuguese developers are also known for their ability to think creatively and come up with innovative solutions.

The country is also an ideal location for outsourcing – close to Europe but without the high costs associated with European countries such as Germany and France. Just have a look:

Average Hourly Offshore Development Rates

Junior – $20-30

Mid – $35

Senior – $50+

Asia

India

There are over 5.2 million developers in India, according to Conquercoding. The country generates up to 2.6 million software developers every year. These statistics testify to the growth of software development in the country.

Indeed, there is evidence that India is generally big on tech and engineering. For example, in 2018, India produced the most STEM graduates of any country in the world, about 2.7 million, according to UNESCO.

India is probably the world’s biggest hub of IT talents, including software development professionals. India’s top tech cities include Bangalore, Hyderabad, Mumbai, and Chennai. On clutch.co, over 3,800 software development firms from India are listed.

In fact, according to recent studies by KPMG and McKinsey Global Institute (MGI), India will overtake the United States as the world’s largest IT services market by 2022, accounting for nearly 30% of global revenues from IT services.

You should note, though, that in India, there are two types of software outsourcing professionals you would find. The first category comprises developers who are less qualified but also cheap; obviously, a serious project is more likely to experience pitfalls in this case.

Aragorn meme about cost for offshore developers

In the second category, the talents are very skilled but hard to find. The Indian market is huge, so it’s increasingly difficult to find highly-skilled talents unless they would be very expensive to hire.

Average Hourly Offshore Development Rates

Junior – $15-20

Mid – $25-40

Senior – $50+

Singapore

According to Github’s State of Octoverse Report 2019, Singapore ranked second in the percentage increase of contributors on its platform. In the 2020 edition of that same report, it ranked second in the growth of contributors to open source projects with 376,249 contributors. In 2021 the number was 527,746 (more than 40% growth).

According to Singapore’s Ministry of Manpower, its country’s ICT sector employs almost 200,000 people. On Clutch.co, at least 160 Singaporean software development firms are listed. For a country with a population of under 6 million people, these are impressive figures that testify to the amount of talent being groomed in Singapore.

cat trying to find professional developers to outsource

Although a high percentage of the population is involved in IT, the resources available are limited. This may cause impediments to a project. Not to mention that the differences between the Asian culture and the West’s may be a hassle to overcome.

Average Hourly Offshore Development Rates

Junior – $25-30

Mid – $35-50

Senior – $55+

The Americas

A note about South America in general: there are limited tech resources, for one. In addition, the main languages are Spanish and Portuguese, which may make it difficult for Western clients who speak English because of the abiding possibility of misunderstanding.

bad english mem

Canada

With 909 software development companies listed on Clutch, Canada is proved to be a popular location for outsourcing. There’re a couple of reasons for it:

  • its proximity to the United States;
  • its strong infrastructure;
  • high-quality education system;
  • its relatively low cost of living compared to other western nations.

Canada’s low taxes and strong currency make it a great place to outsource software development. In addition, Canada offers several tax incentives that can help companies save money on their projects.

Want some evidence for it? The Canadian software development revenue in 2022 reached US$17.38bn. It’s going to show only the growing tendency, expected to reach US$24.16bn by 2027 with an annual growth rate of 6.81%

The following rates are for offshore software development services provided by experienced Canadian IT companies specializing in web development, mobile app development, e-commerce solutions, custom software development, and software testing services for small businesses and enterprises across Canada:

Average Hourly Offshore Development Rates

Junior – $15-20

Mid – $25-30

Senior – $45+

Brazil

Brazil has over 200 software development companies listed on Clutch.co. Brazil is, no surprise, the largest technology ecosystem in Latin America. In 2020, for instance, its IT market grew by 12.2%, more than twice a projected growth rate of 4.1%. In 2021, according to the Brazilian Software Market – Panorama and Trends 2022, the sector witnessed a 17% growth, more than twice the world’s 11.2% average in the same period. In 2022 market growth reached a record 23.4%.

In addition, Brazil boasts of over 500,000 software developers. As a result, Brazil boasts 1.8% of the global IT market and 40.7% of the market in Latin America, making it one of the most important technology-focused regions globally. However, as evident below, it also has low offshore developer rates.

focus on your core, outsource the rest
Average Hourly Offshore Development Rates

Junior – $10-20

Mid – $25-30

Senior – $35+

Mexico

More than 100,000 software developers graduate from Mexico’s institutions yearly, and apparently, the Mexican software development market should comprise no less than 1 million developers. On Clutch.co, it lists about 450 software development firms.

In a report of top destinations for software development based on assessment tests, Mexico was the only non-European country in the top 20, with a score index of 98.29%.

Average Hourly Offshore Development Rates

Junior – $10-20

Mid – $23-30

Senior – $35+

Offshore Software Development Rates Comparison

For ease of reference, we have compiled this table of offshore software development rates by country as well as according to the level of experience of the professionals:

CountriesJuniorMiddleSenior
Estonia$18-25$30-45$50
Poland$20-27$35-50$65+
Albania$15-23$30$35+
India$15-20$25-40$50+
Singapore$25-30$35-50$55
Portugal$20-30$35$50+
Canada$15-20$25-30$45+
Brazil$10-20$25-30$35+
Mexico$10-20$23-30$35+

What Should You Know?

Following an examination of offshore software development rates by country, business leaders must know what to expect when sending a project offshore and how much does it cost to outsource software development. This section covers factors affecting the cost of a project, tips for cost saving and cost-effective project implementation, and how to choose the right country and vendor.

Factors Affecting Development Costs

An offshore software development rates comparison is important in deciding which region to outsource to. Yet, software development prices vary widely based on different factors, like the price for every other thing. So we’ll look at factors that cause varying prices, from the more apparent to the less apparent.

Developer expertise and experience

This is surely the most obvious factor affecting the price of hiring software developers. Certainly, a junior developer cannot expect to be paid at the offshore developer rates of a senior developer. Likewise, a senior developer will not settle for being paid at a mid-level developer’s rate.

Developers' experience meme

Note that this is context-specific as, in some locations, the offshore developer rates of a mid-level professional might be equal to or even less than that of a junior developer elsewhere. For example, the middle-level Central European developer’s hourly rate could be equal to or even less than the junior US developer’s. However, the point is that within similar contexts, software developers earn according to their levels of knowledge and experience, like all other professionals.

Programming Languages

There are many programming languages, each with varying degrees of acceptance. As a result, the software development market has an obvious skills gap, even though the gap is closing. However, some languages are still growing; as such, there aren’t many programmers who can code in that language yet.

Moreover, some specific skills like business intelligence developer roles and responsibilities, can cost more than you expect. These factors affect offshore software development rates comparison, but we can expect some improvement in the coming years.

Project complexity

This particularly applies to contract projects. The more complexity is required to complete a project, the higher you will get charged. Many people prefer to outsource the entire project to software development agencies when a project is complex.

time to outsource

With the offshore outstaffing model, the client is charged by the agency, and all responsibility for paying individual developers falls to the latter. Therefore, you can save more money on particularly complex projects.

Location and cost of living

The location of the outsource company play an important role in determining its service cost. For example, if you choose a provider based in India or China, you can expect lower rates than if you choose a provider based in Australia or the United States. In general, some people think offshore developer rates are cheaper in certain areas simply because the developers from there are of lower quality. That’s not true. This is because labor costs in India and China are significantly lower than in other countries due to lower levels of living standards and salaries.

However, you should remember that although the amount of offers is huge on the market, it still needs time and money to find a good developer who will help you create a product of high quality.

For instance, Eastern Europe has some of the cheapest offshore developer rates; yet, it still appears among one of the best countries to outsource software development projects. The reason for this variation is usually the cost of living. In places such as Albania, Croatia, etc., when the cost of living is low, developers charge less because they can still satisfy their needs.

This is one of the reasons why many ProCoders clients consider collaboration with us: we employ developers from Central and Eastern Europe, putting the cost and quality on the same level. Our clients are looking for reliability and the balance between quality and cost, so choosing developers from Estonia, Croatia, etc., is the best option.

Tips to Save Budget

One way companies spend more on hiring software developers is their hiring options. If you are recruiting directly, you will spend more on finding the right developers. Instead, you can save the budget by outsourcing software development to an agency via the outstaffing model.

For instance, by outsourcing your project to ProCoders, we will help you set up a world-class team to handle the project and provide the necessary infrastructure/tech stack to complete it. Offshoring is a great option because you are taking advantage of the low offshore software development cost in another country (in this case, countries of Central Europe) while getting even better value for a project.

Before you begin the project, have all the estimated requirements at hand already. This is another area where you need an outsourcing agency. Many software development projects are often plagued by hidden costs (covered in the next section) that hamper the project’s progress. Finally, define the major features of the project and clarify the necessary KPIs to build a scalable team.

Also, in defining the project’s scope, pay attention to unexpected costs, taxes, fees, and other hidden offshore software development costs that may take a chunk out of the budgeted amount.

Use the agile approach throughout the process. The strategy for implementing a project’s requirements is also highly important to the project’s overall cost. In addition, the agile approach helps you to work faster and smarter and to avoid the common pitfalls experienced in most projects.

Agile scheme

ProCoders doesn’t use the waterfall approach where we only show our results to clients to avoid mismatching results to expectations. Instead, we use the agile strategy and work closely with our clients to ensure the project’s smooth running.

Before starting a project, we offer to make a discovery phase to precisely estimate the steps and budget needed for the development of a particular product. Not only developers are included in the process, but also UI/UX designers, QA specialists, etc. We make everything to boost our clients’ projects as much as it’s possible.

Hidden Costs

Maintenance covers the most hidden offshore software development cost because sometimes, you can’t anticipate the exact type of problems needing to be fixed. Even though a project might have a ‘timeline, software development is an unending venture. Therefore, maintenance might not even be due to some error.

At times, there may be a change in compliance requirements that you need to adapt your program to. At ProCoders, we continue to support clients whose products we have developed to improve the software from time to time, address compliance requirements, and clean out bugs.

Get our Clients’ Contacts to Discuss their Experience with Us!

Personnel turnover: some projects take several months and even years. Long enough for a member to leave for somewhere else. Even if that’s not the case, there may be a need to bring in a specific professional for an assignment at some point in the project. Recruitment and onboarding costs can be extraneous on the budget. However, if you use an outstaffing agency such as ProCoders, you should have less difficulty dealing with this.

With ProCoders, you can reduce hiring time by delegating your project to our development professionals. No matter what you need – we have React, React Native, Laravel, Angular, DeFi, and other developers for any of your needs.

Outstaffing to ProCoders will not only decrease your hiring time but also will help you avoid hidden costs connected with hiring new employees, such as taxes, insurance, etc.

Change requests: agile development prides itself on continuous iteration. However, change requests may be so many that they become overbearing and bite into the budget set for the project. This is part of why the discovery phase needs to be defined from the start, so such needs and iterations can be iterated before the project begins.

How to Choose the Right Region and Vendor?

By now, it is clear that while offshore software development rates vary by country, the cheapness of a vendor or region is not enough reason to select it for your project. So, what other factors matter in choosing an area and vendor?

Assess the Developers Themselves

Even after meeting the management of the vendor/agency. That means knowing and meeting with the people who will directly handle your project. At ProCoders, our clients have direct access to the teams we build, and as such, communication is smoother, and they can trust our work to be nothing short of excellence and follow their expectations.

Check our Developers Availability

Review the Vendor’s Past Clients and Analyze Industry Experience

ProCoders has an advantage because we have worked with clients from diverse industries: SaaS, logistics, healthcare, IoT, and B2B. That puts us in a pole position to handle various projects. Therefore, hiring offshore developers with experience working in your industry is crucial.

Consider the work conditions

This includes the time zones. Offshoring is complicated for many companies because of the time zone difference, which might create communication gaps. However, ProCoders has successfully worked with clients from various countries. Understanding your team and organizing the process around the time zone differences ensures round-the-clock development and greater efficiency.

F. A. Q.
What is the average hourly rate for offshore software development?

The average hourly rate for offshore software development ranges between $10-25 per hour for low-skilled workers and $40-50 per hour for high-skilled workers. The general costs can go up if you need a team of more than 10 developers working on your project at once.

What is the cost difference between Asia and USA?

The answer depends on several factors, including project complexity and skill set required for the job. However, you can expect a cost difference of up to 30% between Asia (for example, India) and the USA.

Which countries can guarantee high quality and low prices?

Countries such as Estonia, Poland, Portugal, and Brazil, mentioned in our article, can ensure that you will get reasonable-cost developers while having first-class quality. However, the cost also depends on the vendor you will negotiate with. 

At the same time, you should always remember to check the feedback about the vendor you want to work with. There may be such situations when a particular vendor may provide you with a junior developer when you requested a middle one to get more money this way. Because of that, ProCoders advises you to do thorough research before signing a contract with anyone.

Conclusion

This article on offshore software development rates comparison is essential because this model is untried for many companies. However, many other companies that have tried using it continue to recount its benefits, particularly in saving offshore software development costs and accessing a global talent pool, thereby expanding their hiring options and quality.

ProCoders is located in a region with one of the most affordable offshore software development rates by countries: Central Europe. We help clients build scalable teams to develop world-class software products. So, whenever you need a high-class development service from the best Central European specialists – you’re welcome!

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