Offshore software development is delegating engineering functions to offshore programmers. Hire offshore developers to optimize web and mobile development costs without compromising quality. For example, an average hourly rate for a senior developer in the US starts from $60 per hour while in Ukraine it's around $35 per hour. In Latin America offshore software development prices range from $30 to $50; in Eastern Europe, an hour of developer’s work will cost $25-50; the average rates of offshore developers in Asia and Africa are $20-40.
- Eastern Europe
- Latin America
- Outsourcing rates in top offshore destinations
- Outsourcing destination rating
- Offshore software development models explained
- Tips on hiring developers overseas
- How to choose country and company
- Why choose Ukraine?
- Offshore developer rates FAQ
Offshore Software Development Rates Comparison
Offshore Development Rates by Region
Outsourcing Rates by Country
|Eastern Europe||$25-$50||Ukraine, Poland, Romania, Hungary, Bulgaria, Belarus, Czech Republic, Austria, Slovakia|
|Latin America||$30-$50||Mexico, Brazil, Colombia, Peru, Chile, Argentina|
|Africa||$20-$40||Morocco, Kenya, Nigeria, Egypt, South Africa|
|Asia||$18-$40||India, China, Philippines, Pakistan, Nepal, Bangladesh, Vietnam, Indonesia, Malaysia, Philippines|
The ranges provided below are a rough guideline as they ignore the differences between various cooperation models. To find out what the real outsourcing rates are, you’ll need to communicate with vendors directly
Yet, on average, offshore software development rates for an entry-level software developer start with $25 per hour and reach up to $50 per hour for a senior software engineer. The outstaffing model lowers the outsourcing software development costs making junior developer cost per hour as low as $18 per hour. The offshore development rates in Eastern Europe vary from country to country. For instance, outsourcing rates in Ukraine are lower than those in Poland.
10 best offshore software development countries in Eastern Europe where you can hire software developers are:
- Czech Republic
Offshore Development Rates in Easter Europe
Eastern Europe is a happy medium where you can hire high-quality software developers with lower rates without compromising the quality of the product. The region is well-known for its density of software developers with an impressive 1.3 developers per 100 people. Currently, the IT industry in the region has about 1 million software developers in Eastern Europe, making it a lucrative software development outsourcing destination.
About 450 technical universities and favorable business conditions stimulate the industry’s prosperity. Ukraine is among the fastest-developing countries in the region. By the end of 2020, Ukrainian tech market is expected to have 200K software specialists.
Ukraine's liberal outsourcing rates and 200,000 programmers make it one of the biggest IT nations in Eastern Europe, second only to Poland with 255K software developers. Outsourcing rates in Ukraine range between $26 and $43, which is considerably lower than in Poland, where you’ll be charged $40–$56 per hour.
Key Facts About Offshore Software Development Countries in Eastern Europe
|Country||Number of Programmers||Average Rates||Popular Languages||Tech Hubs||Famous Startups|
Prezi, LogMeIn, Ustream
PandaDoc, MSQRD (Masquerade)
Software developers in Ukraine, Russia, and Belarus have advanced programming abilities, university degrees, and speak Intermediate and Upper Intermediate English. Because of these factors, the demand for Eastern European developers in the region continues to increase.
Key Facts About Offshore Development Rates in Easter European Countries (source)
Offshore developer rates in Asia begin with $18 for an entry-level offshore developer and $25 for a senior offshore developer. However, offshore development rates in large Asian tech hubs keep increasing and can reach $30–40 per hour. Nevertheless, offshore software development companies in Asia charge lower offshore developer rates than their competitors in Europe.
Offshore Developer Rates in Asia
China and India are the main Asian tech hubs with a large number of software engineers — there are nearly 5 million developers in each country. Other countries in Asia, such as Vietnam, Malaysia and Indonesia, are also gaining ground and offer similar software development services.
Low offshore software development rates in Asian countries often come at the cost of poorer project quality. Adverse work conditions, cultural differences, and disparities in time zones have a negative cumulative effect on the correspondence and result in decreased quality.
Asia boasts a vast tech talent pool — more than 10 million developers. The offshore developer rates in Asia are shaped by various aspects and can differ a lot from country to country.
An hour’s work of a junior offshore software developer from a Latin American country like Brazil, Argentina and Mexico would cost you around $30. Offshore developer rates for senior software developers get as high as $50 per hour. Hiring the same dedicated software developer through an outstaffing vendor would cut the offshore developer rates by up to 20%. This means that you can hire a junior software developer for $24 per hour. The same goes for a senior software developer whose offshore developer rate can be decreased to $40 per hour.
Offshore Outsourcing Rates in Latin America
Latin America is the most popular offshore software development destination for North American tech companies. US companies primarily outsource software development due to considerably lower software developer rates that cut the cost of product development.
Negligible time difference is another good reason why American businesses seek cooperation with Latin American software development companies.
Also, Latin American countries are the most geographically close to American clients, which makes Puerto Rico, Brazil, Argentina, and Mexico very convenient outsourcing destinations.
Hiring a junior offshore software developer in Africa can cost you about $20 or less per hour. Offshore developer in rates in Egypt, Morocco, and Kenya range between $20 and $40 per hour. The are caused by a small talent pool of software engineers in African countries. An hourly offshore developer rate of a senior software developer in Egypt, Morocco, and Kenya fluctuates around $40 on average.
Software Development Hourly Rates in Africa
Highest outsourcing rates $85-$110 per hour are paid to architects, lead architects, and DevOps, and Automated QA engineers in all top offshore destinations. About $65-$85 range is more common among graphic designers, project manager, and middle-level developers. Junior development specialist outsourcing rates in top offshore destinations range between $52-$80 per hour.
|North America||Central Europe||Easter Europe||Latin America||South Asia||Southeast Asia|
|Architect||$110 - $125||$60 - $100||$45 - $67||$45 - $75||$35 - $80||$30 - $50|
|Lead Architect||$85 - $125||$50 - $100||$35 - $65||$28 - $70||$32 - $65||$24 - $35|
|Senior Developer||$78 - $125||$45 - $80||$30 - $59||$32 - $65||$25 - $50||$24 - $33|
|Intermediate Developer||$65 - $90||$36 - $70||$27 - $40||$27 - $60||$22 - $35||$25 - $30|
|Junior Developer||$55 - $80||$32 - $50||$22 - $31||$28 - $55||$21 - $30||$20 - $25|
|Business Analyst||$72 - $85||$50 - $80||$30 - $67||$23 - $40||$20 - $45||$25 - $35|
|DevOps||$70 - $90||$55 - $70||$40 - $61||$38 - $65||$20 - $40||$24 - $35|
|Graphic Designer||$65 - $85||$55 - $70||$25 - $57||$44 - $70||$20 - $45||$24 - $50|
|Project Manager||$88 - $95||$50 - $70||$25 - $62||$41 - $68||$30 - $50||$24 - $50|
|Scrum Master||$50 - $85||$40 - $70||$25 - $60||$30 - $70||$25 - $65||$24 - $40|
|Junior QA (manual)||$52 - $70||$24 - $60||$17 - $30||$33 - $45||$15 - $21||$18 - $24|
|Intermediate QA (manual)||$60 - $81||$35 - $65||$19 - $42||$38 - $50||$18 - $31||$22 - $26|
|Senior QA (manual)||$68 - $90||$40 - $80||$19 - $57||$41 - $60||$22 - $39||$22 - $29|
|Junior QA (automated)||$60 - $80||$26 - $70||$18 - $30||$35 - $45||$15 - $30||$20 - $26|
|Intermediate QA (automated)||$72 - $90||$32 - $80||$25 - $40||$38 - $50||$18 - $36||$25 - $30|
|Senior QA (automated)||$85 - $125||$40 - $80||$34 - $55||$41 - $60||$22 - $44||$24 - $33|
1. Extended Team
Also referred to as outstaffing and staff augmentation, this cooperation model implies that the extended team an outstaffing vendor assembles works for you on a full-time basis. Each team member is hired exclusively for you with your specific requirements in mind.
Type of Contract: Cost+
Cost+ includes monthly salaries of your developers and a fixed fee for the services provided by the vendor. The fee usually includes expenses on office infrastructure, taxes, payroll, workstations, and support staff.
A Cost+ contract is one of the most flexible, cost-efficient, and transparent models in outsourcing. The cost structure in outstaffing has the client cover the developer’s salary and vendor fee. Meanwhile, project outsourcing, which is discussed below, also includes additional expenses associated with risk management, which inflate the total product development cost by almost 30%.
2. Project Outsourcing
Within the project outsourcing cooperation model, you fully delegate all aspects of software development to the outsourcing vendor. Your project is completed by tech specialists working for the vendor.
Type of Contract: Time and Materials
Within the time and materials cooperation model, you only pay for the hours that developers spend working on your project.
Type of Contract: Fixed Price
Within fixed-price contracts, vendors take full responsibility for completing product development within the agreed timeframe and budget. If no scope adjustments are needed, you only pay a single sum.
3. Dedicated Team
Dedicated team is a perfect cooperation model for businesses that have a significant volume of development work and, therefore, search for long-term collaboration. Within this model, the vendor provides a development team dedicated to a client’s project on a full-time basis.
Type of Contract: Rate Card
When you sign a rate card contract, you receive a list of monthly rates of the developers working on your project and get charged monthly.
When choosing an offshore development country for outsourcing software development, pay attention to these key factors: average developer rates, the maturity of the tech industry, time difference, and cultural fit.
Compare the Average Offshore Software Development Rates
- About 59% of tech company owners choose outsourcing to reduce software development costs. The rest are chasing the talent they lack at home. Nonetheless, you should remember that quality is always your first priority, and great software developers are costly everywhere.
- The first thing we recommend that you do while looking for a perfect outsourcing company is research the average offshore developer rates.
- Luckily, we’ve already done most of the work for you, so if you’d like to learn about the top outsourcing destinations, the average developer rates in the world and many other topics, please hit our blog.
Pay Attention to the Outsourcing Destination Ratings
Eastern European countries such as Ukraine and the Baltic States are moving up the index according to the Digital Transformation Report by A.T. Kearney. Ukraine attracts small and middle-sized tech companies from North America, Germany, and the Netherlands with a great quality-cost combination and geographic proximity. Hungary, the Czech Republic, and Poland, on the other hand, have lost a few points predominantly due to the increase in development costs.
Index of Outsourcing Countries in Eastern Europe, Latin America, Africa, and Asia source Eastern Europe Latin America Africa Asia Bulgaria - 17 Brazil - 9 Morocco - 36 India - 1 Ukraine - 20 Mexico - 11 Kenya - 43 China - 2 Poland - 24 Columbia - 13 South Africa - 49 Malaysia - 3 Romania - 28 Peru -19 Indonesia - 4 Hungary- 31 Chile - 22 Vietnam - 5 Czech Republic - 33 Argentina - 29 Philippines - 10 Slovakia - 35 Bangladesh - 32 Pakistan - 37
According to the Digital Transformation Report, the outsourcing destinations of the Asian region retain the status quo as the most popular and fast-developing outsourcing locations for the third year in a row. India, China, and Malaysia are the seasoned leaders of the world's outsourcing index. The region is being actively populated by global businesses that hire large numbers of tech talent.
Latin America holds firm positions in the world’s outsourcing index with Brazil, Mexico, and Colombia taking 9th, 11th, and 13th place, respectively.
Pay Attention to Time Difference
- Despite the predominant opinion, an 8-hour time difference might actually bring more efficiency to your daily work than a 1–2 gap. An 8-hour time difference can cut the time to market by involving a “follow the sun” development model.
- Within the “follow the sun” model, two teams in different time zones take turns developing a product, taking twice less time than would be possible if the time difference was only 1–2 hours.
- A 1–2 hour difference, however, is very convenient in a different scenario as it allows you to maintain live communication with your remote developers. It’s traditionally used for long-term projects where developers from two teams need to do planning and knowledge sharing more often.
How Many Developers in the Country Know Your Tech Stack?
- Countries with high availability of developers who specialize in your particular tech stack unlock two benefits at once. First of all, you’re able to hire them quicker, second, the offshore developer rates are perceptibly lower.
- Hiring a specialist with knowledge of lesser known technologies requires more exploration. For instance, developers with good knowledge of functional languages such as Scala, F# or Elang are in short supply even in the greatest tech hubs of the world.
- Speaking of Scala developers, if you’re searching for rare birds fluent in this technology, you’re more likely to find them in the UK, Ukraine, and Poland.
How Close Is the Country Culture-Wise?
- Many people think that cultural proximity and mentality is hard to measure, but we believe that it’s important to trust your personal opinion.
- You can arrive at your opinion on the cultural fit of a certain country by asking fellow business owners or CTOs with similar collaboration experiences to share their feedback.
- Reach out to business owners in the outsourcing country of choice and ask them about the legislative system, their approach to task management, and any other aspect that is important for you.
- Cultural proximity is the one key aspect that defines whether you and your remote team will be able to create a mutually comfortable work environment and directly influences the end-result
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Finding an appropriate software development vendor is crucial for your final product and business success in general.
We recommend starting with profiling the vendor and getting to know the cooperation model the company uses and whether it matches your business model.
Pay Attention to the Cooperation Model the Vendor Uses
- For instance, if you already have tech expertise on your side, you can easily go with the outstaffing model. Within outstaffing, you can hire an entire remote development team, the only requirement is that you have someone to manage it.
- In case growing a development team isn’t on your list, you can outsource the entire project to your vendor. The company working within the outsourcing model will take full responsibility for managing and developing your product.
Focus on Value Instead of Cost
- We’ve all heard those outsourcing horror stories that resulted in an end-result that wasn’t even worth the investment. That’s why we recommend you to pay special attention to the quality of services your vendor provides.
- Paying more for better quality code will bring about long-term benefits for your business. Consequently, investing in a reliable remote team can lead to a more financially appealing product in the long run.
What’s the Vendor’s Price Formation Algorithm?
- The outsourcing and the outstaffing model have different price formation principles. That’s why you should make sure the rates don’t include any hidden costs.
- As we’ve discussed before, within the outsourcing model developer rates include additional expenses on project managers, business analysts, and cover for the time the developers had spent on the vendor’s bench before they joined your project.
- The outstaffing model has a transparent cost structure and has no hidden costs. The vendor charges for the hours the developers work directly for you.
- There will also be a single fee the vendor will charge for maintaining your team, but since this fee is fixed, you’ll always know how much you have to pay at the end of the month.
Is Your Budget Predictable and Flexible?
- Fixed-price payment contracts were created to guarantee the stability and predictability of monthly expenses and work results. Yet, the devil is in the details: should you change any of the requirements during development, you’ll be charged for extra hours. On top of that, you’ll be the one responsible for changes in deadlines.
- The outstaffing model gives you more flexibility. Since you pay for the time your developers spend working on your project, you’ll be able to change requirements on the go.
- That said, you’re still able to plan your budget well as you always know exactly how much you’ll have to pay the vendor at the end of each month.
Who Will Manage Your Offshore Developers?
- If your company already has technical expertise on its side, and you want to continue using all the methods and tools you know and love, the outstaffing model is your best pick. Within the outstaffing model, you have absolute control over your team of offshore developers. But remember that the responsibility for managing the team and therefore the results will be yours.
- Companies with no established development process and technical expertise will more likely prefer the outsourcing model. Within the outsourcing model, the vendor gathers all the requirements, assembles a team and assigns a project manager.
- As a client, you’ll help clarify the details and provide feedback. Thus, the outsourcing model is suitable for short-term projects.
Visit the Outsourcing Vendor
- Schedule a one-on-one meeting with the prospective vendor — even if the company is based on a different continent. Meeting decision-makers in the company is beneficial especially when you’re aiming for long-term cooperation.
- During your stay, you can see the working conditions of your potential developers and feel the work ethic of the company first-hand.
- Make the most of your trip — have a look around the local tech community and meet recruiters to see if local developers meet your criteria.
Ukraine is a great country to hire an offshore developer for several reasons. The main benefit of hiring offshore developers in Ukraine is that you’ll have access to the second biggest tech talent pool in Eastern Europe. Among other benefits are the speed of hiring and the lower cost of developer attraction. Sink your teeth in our guide to outsourcing to Ukraine to get even more useful insights.
The Largest Pool of Tech Specialists [200,000 people]
- At Daxx, we have the pleasure of working with the second-biggest tech talent pool in Eastern Europe. By the end of 2020, Ukrainian tech talent market is estimated to reach 200K tech specialists.
- Ukraine takes 11th place on the list of top software development outsourcing countries in the world. The tech industry is the most rapidly growing industry in Ukraine with $4.5B in investments in 2018.
- About 35K tech specialists graduate Ukrainian tech universities every year. The majority of software developers in Ukraine have bachelor’s degrees and speak English on Intermediate and Upper-Intermediate levels.
Low Corporate Tax and Expenses
- Ukraine offers comfortable corporate taxes. In Kyiv, the corporate tax ranges between $2.5K and $50K a year. To compare, the corporate tax in Berlin varies between $11K and $50K a year, and in New York, it fluctuates between $7K and $50K a year.
- The cost of living in Ukraine is lower than in the rest of European countries. For instance, the rental of a one-room apartment would cost $500 a month. It would cost you slightly less if you want to rent an apartment outside the city center — around $300 a month.
Ease of Doing Business
- Ukraine made a leap to join the top 70 countries in the “Ease of Doing Business” chart issued by the World Bank in 2019.
- It’s a justified concern that leading business operations overseas is complicated, yet Ukraine has proven to be a positive environment for developing and growing large international projects.
- Active Software Development Community
- Kyiv, Dnipro, Kharkiv, Odesa, and Lviv are the most rapidly developing software tech hubs in Ukraine. About 40% of all Ukrainian software developers reside in Ukraine’s capital, Kyiv. Lviv, another large tech city, annually hosts the biggest technology conference in Eastern Europe, IT Arena.
- Technical universities are the most active incubators of new generations of software developers. However, private software development companies also invest in educating more entry level tech specialists.
- Ukrainian tech community has rapidly adopted widely popular knowledge sharing events such as hackathons, tech conferences and educational courses funded by software development companies.
Growing Startup Environment in Ukraine
- About 2K IT startups, among which Petcube, iBlazr, Grammarly, Jooble, CleanMyMac, Mobalytics and Looksery, originate from Ukraine. The latter has been acquired by Snapchat.
- More and more of the 4K of software development companies in Ukraine spare their internal talent resources to build their own products.
- Moderate Offshore Development Rates for IT Services
- On average, software developers in Ukraine charge lower rates as compared to Western European software engineers. Take a three-minute read of our Guide to Nearshore Software Development in Eastern Europe to see for yourself.
- Lower rates are caused by a number of reasons. Quick growth of the tech industry and a powerful influx of fresh talent decrease the average talent demand on the internal Ukrainian market. This brings down the average development costs for the clients, too.
How Much Does It Cost to Outsource Software Development?
Offshore software development can reduce the cost of product development by 20–25% or more. In Eastern European countries, the monthly cost of a middle offshore software development can range from $3 000 to $5 500 including salary and vendor fee. Engaging an American middle engineer would come at an approximate cost of $12 000 per month.
What Are the Average Hourly Rates of Offshore Software Developers?
The highest offshore software development rates in Latin America range from $30 to $50 per hour. Asia is generally known as the destination with the lowest offshore software development rates — $18–$40. Africa is close with $20–$40. The Eastern European countries are a happy medium, offering offshore software development rates of $25$–$50 per hour for a superior quality of work.
What Are the Outsourcing Rates by Country in Eastern Europe?
Software development rates in Eastern Europe range between $25–$50 per hour. Ukraine is a country with moderate outsourcing rates, but the quality of development it offers is exceptionally high. Ukrainian tech vendors charge $26 per hour for a junior developer and $43 per hour for a senior programmer. Price-wise, Ukraine is followed by Belarus, the Czech Republic, and Poland. Here are the outsourcing rates by country in Eastern Europe:
- Ukraine $26–$43
- Belarus $28–$43
- Poland $40–$56
- Czech Republic $34–$53
- Romania $26–$45
- Hungary $39–$52
- Bulgaria $34–$51
How Much Does It Cost to Hire a Programmer in India?
Hiring a programmer in India will cost you around $18–$40 per hour. An average salary of a programmer in India ranges between $6 500 and $7 000 per year. India is a popular outsourcing destination for big enterprises and international corporations. And just like with any outsourcing destination, the cost of hiring Indian developers will vary depending on the level of expertise you’re seeking.
What Are the Outsourcing Rates in Ukraine?
On average, a Ukrainian outsourcing company will charge you $24 per hour for a junior developer and about $43 for a senior development expert. Hiring a Ukrainian developer would save you $1–$14 an hour. In contrast, in neighboring Poland, companies charge $40 for an hour of a junior programmer and $56 for a senior tech specialist.
What Are the Best Offshore Software Development Countries?
The best offshore software development countries by region are:
- Eastern Europe: Ukraine, Poland
- Latin America: Brazil, Argentina, Mexico
- Asia: India, China, Malaysia
- Africa: Egypt, South Africa
How Can I Hire the Best Offshore Developers?
- Partner with companies that specialize in hiring offshore developers. One of the easiest ways to hire the best offshore developers is to delegate the job to companies that specialize in building dedicated teams and exclusively hire offshore developers for clients. These companies take away the headache related to the administrative side of collaboration.
- Interview thoroughly. Make sure the candidate can deliver crisp and clear code and has more experience and ideas than you do. Give preference to specialists who can tackle business issues regardless of the technology used.
- Pay attention to soft skills. Check if the candidate matches your team dynamic and possesses good communication skills.
How Much Does It Cost to Hire a Freelance Programmer?
Freelance developer rates can be as low as $15 and as high as $160 per hour. Naturally, they depend on the level of expertise, technology, location, and project details. According to Upwork, the median average freelance developer rate in Eastern Europe is $37 per hour.
Countries of the Asian region attract big corporations, offering an average median freelance developer rate of $27. In India, China, Malaysia, the Philippines, and other large Asian countries freelance programmer rates begin at $10 and can go up to $250 per hour, which further proves the fact that rates can differ greatly regardless of the specific location and should be clarified individually.
In Latin American countries, freelance developers on average charge around $40 per hour. The region remains on the top positions in the IT outsourcing index, however, it’s starting to gradually lose popularity, giving way to Eastern European countries.
The median average freelance programmer rates in Africa are around $35 per hour. In recent years, the tech industry of the region has been going through stagnation, with South Africa and Egypt being the only major tech hubs.
The freelancing market is extremely competitive and unruly in terms of hourly rates specialists charge, but you should definitely check with popular freelance platforms to shape your expectations:
Daxx Can Help You Hire Offshore Software Developers in Ukraine
We’re a multinational company that specializes in hiring software developers for clients from all around the world. With us, you can hire one developer or build an entire dedicated team.
We have offices in Kyiv, Dnipro, Kharkiv, and Lviv — Ukraine’s four largest tech hubs. Each developer you hire with us works exclusively on your project. You’re the one managing the team, which means you’ll be able to use all the management tools and methods you already know and love.