You'll be impressed how greatly offshore software development rates by country differ. Many have already used it to their advantage. By outsourcing their software development, companies regularly save from 40% up to 70% of their budgets. Some even managed to spend 3x less money than expected. Why so? Whereas developer hourly rates are from $70-130 in the US, in some Eastern European countries, say Ukraine, people pay as much as $30-50 for the same job.
So, what are these affordable offshore software development costs? Let's have a look.
Offshore software development rates by country: a detailed overview
In 2021, the IT outsourcing market is expected to generate almost 359 billion dollars. Today, there are hundreds of IT outsourcing hubs all over the world, each one with different development rates, quality, culture, expertise, time differences and much more. So, while hiring a development team, you should keep in mind all these characteristics, analyze them, and choose the most suitable vendor for you.
Overall, we can identify two big pools of outsourcing destinations based on software developer rates:
- Countries with high-quality of life and soaring costs of living
Among them are the US, Australia, Western Europe, Israel, the UAE etc. They are characterized by offering high offshore development rates together due to the high living and working standards. Development costs here range from 50$ up to 150$.
2. Regions with less elaborated life quality and lower development rates
These are Latin America, Africa, Asia and Eastern Europe. They are often characterized by smaller offshore development rates with costs varying between 20 and 50$.
Find in the guide:
- Offshore development rates by country
- Time zone difference
- Development rates by role
It is the regions with less developed economies that have become real players in the arena of global IT outsourcing. They have turned into reliable and productive IT hubs which produce a significant part of mobile and web solutions.
Why? For some rough numbers, a Node.Js developer in Ukraine can earn in general from $20 to $40 per hour, which is 33% of what a developer in the U.S. earns, where it’s on average $60 up to $120, based on a standard 40-hour working week.
Offshore Software Development Rates Comparison: Eastern Europe
When thinking about hiring a team in Eastern Europe, there are plenty of places to pick from with roughly 1 million software engineers. Its main outsourcing hubs include Ukraine, Poland, Romania, Belarus where average offshore development rates range from $20 to $50.
Being rich in technical educational institutions, the eastern part of Europe offers solid software experts that only get better so everyone wants to get their hands on them. Another plus is their proficient English skills which are key for any successful project.
Offshore Software Development - Ukraine
- Rates: $25-45
- Popular tech stack: Python, Java, Ruby
- IT hubs: Kyiv, Lviv, Odesa, Kharkiv, Dnipro
Ukraine has gained a leading position among IT outsourcing destinations not only in Eastern Europe but also worldwide. Right now, Ukraine ranks among the best offshore software development rates by country.
How is it? To summarize in one sentence: Ukraine software development provides high-quality for a reasonable price.
Kyiv, Odessa, Lviv, Kharkiv... These are few of many Ukrainian IT hubs which play an important role on the global arena with 11 of Ukrainian companies being ranked among the best 100 IT outsourcing firms worldwide. Potential of offshore development in Ukraine is really impressive. Thus, last year the Ukrainian IT industry set a new record — it received an astounding $571 million of investments.
The IT environment here has already demonstrated impressive results. Such tech giants like WhatsApp, Viewdle, Grammarly, Preply, Reface were all fully or partially created by Ukrainian engineers.
Still, more to come – Ukraine is a home for more than 200000 developers. The country has around 130 thousand new engineering students every year, and around 16000 IT graduates on a yearly basis. Being proficient at most of the programming languages, Ukrainian developers are in high demand far outside its borders.
Offshore Software Development - Poland
- Rates: $35-55
- Popular tech stack: Java, SQL, Python, C++
- IT hubs: Warsaw, Krakow, Wroclaw, Lodz
In Poland, rates for outsourcing development are little higher than in neighboring Ukraine but it still is as in Eastern Europe — somewhere around $40-56. Yet, higher software development cost per hour can be explained by the great tech education in the country and higher living standards. Being one of the most developed IT industries, Polish outsourcing is also rich in both freelance specialists and established companies.
Offshore Software Development - Belarus
- Rates: $35-50
- IT hubs: Minsk, Gomel, Vitebsk, Mogilev
Recently, Belarus has recommended itself as a young & rapidly growing IT market.The country also offers solid tech education, language proficiency, and relevant expertise. Offshore software development rates vary here from $35 to $50 but as the political instability grows by the day, new generations of developers are going abroad.
Offshore Software Development - Romania
- Rates: $25-45
- IT hubs: Bucharest, Cluj-Napoca, Iasi
The rates here are still pretty affordable with software development cost per hour ranging on average from $25 to $50. Yet, the expertise is promising: Romanian developers are proficient in the most complex databases, languages and algorithms.
Offshore software development rates in Latin America
The IT outsourcing market in Latin America should also be considered and reviewed while choosing a destination to hire a remote development team. For, it offers competitive talents, relatively good rates, and a convenient outsourcing location.
How much does it cost? Roughly 40$ for a junior specialist, while a senior developer’s hour could cost around $55 which is a fair price to ask for.
Latin America as an offshore software development hub has been recognized only recently much due to the efforts of the local government in addition to all the economic instability and political insecurity. Countries such as Argentina, Colombia, Brazil needed new ways of financing and providing for their own and IT brought up good results.
Outsourcing Software Developer Rates in Argentina
- Rates: $35-55
- Tech stack: Java, Python, SQL
- IT hubs: Buenos Aires
Argentina is one of the most advanced IT outsourcing markets in Latin America. It offers quite a wide pool of technical-savvy talents who are popular within Western Europe. Growing economically and culturally close to European countries, Argentina has marked a strong presence on the global IT arena. Offshore developer rates here range from $30 for a junior programmer to $50 for a senior one.
Offshore Software Developer Rates in Peru
- Rates: $35-55
- Tech stack: Node.js
- IT hubs: Lima
At Peru Service Summit 2019, it was stated that the country gained $85 millions of global revenue. Expanding presence of the IT outsourcing market enables Peru to build and solidify its economy and better life standards. With average software development rates of $35-55, Peruvian developers are technically educated, fluent in English and well aware of the US business processes.
Outsourcing Software Developer Rates in Brazil
- Rates: $30-50
- Tech stack: Java, Python, SQL
- IT hubs: Rio de Janeiro, Porto Alegre, Curitiba, Blumenau and Londrina
In Brazil, the average developer rate per hour goes around $30-50. The country is one of the leading IT outsourcing hubs in the world. In 2021, Tholons Services Globalization Index included Brazil in the top 50 IT nations, ranking in the 15th position. This region is also renowned for a high number of technical engineers: yearly Brazil has around 15,000 tech graduates and approaches 500 thousand engineering software developers.
Offshore Software Development Rates in Colombia
- Rates: $30-50
- IT hubs: Medellin, Bogota
Offshore software development rates here are the same as for the rest of Latin American countries. While the tech talent pool is not small in Colombia, high criminal situations in the country as well as the lack of English proficiency make it less attractive among other IT outsourcing destinations.
Until recently, Africa hasn’t been among popular offshore development destinations. After Microsoft invested $100 million in continent’s developers in 2019, the African IT outsourcing market started to grow rapidly. Key IT hubs here are Kenya, South Africa, Morocco, Egypt and Nigeria. Rates usually vary from $20 to $45.
Software Development Outsourcing Market in Southern Africa
- Rates: $20-45
- Tech stack: Java, Python
- IT hubs: Western Cape, Gauteng, Durban
South Africa leads the continent's IT industry. In 2021, the country was included in top 50 digital nations, ranking in 20th. The location also contributes to the region's growing IT market — South Africa's time zones overlap with most of the European countries.
Software Development Market in East Africa
- Rates: $20-45
- IT hubs: Mombasa, Kisumu, Eldoret
The biggest IT outsourcing hub in the Eastern part of Africa is Kenya. One of the advantages for this country is high English proficiency among developers. That’s thanks to the country’s policies which made English an official language in Kenya.
Software Outsourcing Rates in North Africa
- Rates: $20-45
- Tech stack: PHP, Python
- IT hubs: Morocco, Egypt
As well as South Africa, the Northern part of the continent also shares time zones with most European countries. Offshore developer rates here don’t differ from the rest of the continent. Key IT outsourcing countries are Morocco and Egypt. Some of the biggest global telecommunication providers even placed their R&D centers in Egypt (Vodafone, Intel etc.).
Software Outsourcing in Western Africa
- Rates: $20-45
- Tech stack: SQL, Java, Python
- IT hubs: Lagos
For West Africa, the top region for offshore development would be Nigeria. Country’s IT market is only evolving but has a great potential and talent pool. Understanding the benefits of an advanced local IT industry, the Nigerian government actively invests in developing the market and educating developers. Due to the discrepancy in the time zones, it might become hard to schedule meetings and provide support to their clients.
Key IT Outsourcing Hubs in Asia
The biggest competitive advantage of this region is its low offshore software development rates which sometimes range from $20 to $45. With its 10 million tech specialists, Asia has lots to offer.
Yet, affordable offshore rates for software development and a wide talent pool are sometimes achieved at the expense of proper product quality, great cultural and time differences. The biggest IT outsourcing hubs in Asia are China, India, Vietnam, Malaysia, Indonesia, the Philippines and Bangladesh.
Offshore Software Development in India
- Rates: $25-$50
- Tech stack: Java, C++, Python
- IT hubs: Bangalore, Chennai, Mumbai, Kolkata
India is recognized as one of the most affordable offshore software development countries. Its offshore developer rates usually range from $20 to $40. English is widely spoken around the country which is a big advantage while choosing a destination to outsource software development.
Yet, the final product quality can be an issue. There is no legal system to control quality standards in the country, so it totally depends on whether you’re lucky enough to find responsible and reliable developers.
Outsourcing Software Development to China
- Rates: $30-60
- Tech stack: Python, Algorithm and Functional Development
- IT hubs: Beijing, Shanghai, Shenzhen
The region boasts a rich talent pool of skilled developers, obviously. Chinese software development cost per hour is a little higher than in other Asian countries — $30-50. This price is caused by a more advanced local economy and expertised specialists being subject to custom software development rates.
Language barrier is among main concerns for the companies looking for outsourcing in China. So, having recognized poor English proficiency throughout the country, the Chinese government started to invest in numerous initiatives to educate the local population.
Offshore Software Development in The Philippines
- Rates: $25-50
- Tech stack: PHP, ASP.NET, Ruby on Rails, ASP.NET Core
- IT hubs: Manila
The country’s developers have a pretty good level of English, strong tech foundation and an elaborated IT infrastructure. Besides, the stable political and economical situation in the country adds up to its popularity among IT outsourcing seekers.
Still, a great time difference can cause a range of problems in communication with US clients and become a serious issue not only for the developers from the Philippines but also from other Asian countries.
Offshore Software Development in Vietnam
- Rates: $20-40
- Tech stack: Java, PHP, and .NET
- IT hubs: Hanoi, Ho Chi Minh City
For Vietnam, average offshore software development costs are $20-50. The country has been regularly ranked among top global outsourcing destinations. Vietnam can be characterized by good expertise, numerous technical specialists and enough language proficiency.
Destinations with high offshore development rates: the US, Western Europe, Australia, Israel
The thing which unites these at first completely different countries are their relatively high rates for outsourcing development. Average offshore software development rates by country here reach up to $50-150. These numbers result from elaborated economies, high life quality standards and well-developed internal markets in the chosen destinations.
The United States
The US annually ranks among top digitally competitive countries in the world. Yet, the specifics of its national market, economy and taxation system make the region one of the most expensive IT outsourcing destinations. Average rates for offshore software development in the US may range from $60 to $130.
This region’s high rates can be explained by the stable economy, advanced taxation system and high standards of living European countries provide. In Germany, France, the Netherlands, offshore developer rates may range from $50 to $100, while in Switzerland or Scandinavia the same services may cost you up to $100-200.
The Australian IT market is growing rapidly right now. Yet, there are some barriers which hold it from becoming one of the top offshore development hubs: high rates, remote location and significant time difference. Average rates for software development can be as high as $100-150 in Australia.
Software development rates in Israel are pretty high. Let’s just compare: the average salary of offshore software development team members in Ukraine is about $3,000, while in Israel a specialist junior will get $5,500 for the same work. Such striking differences result from the lack of tech expertise in the country and, of course, a more stable economic situation in Israel.
Why outsource software development?
There should be clear reasons why more and more businesses are turning to outsource. Surely, there are. Offshore software development is beneficial in lots of ways. Some of the crucial ones are:
Outsourcing saves your money, since it provides more affordable options for businesses. That’s probably the prime reason why so many companies start to prefer this cooperation model. Why lower rates? As a rule, the average rates of software development in a region or a country depend on the stability of its economy, currency, and local market situation.
Apparently, some states such as the US, Singapore, Australia, Western Europe have much more secure economic situations and, consequently, higher rates. At the same time, most of the developing countries (let's take Ukraine, Brazil, India, Algeria, Russia) with low income per person offer more affordable prices due to their less elaborated economy.
Yet, being cheaper in this case doesn’t mean worse quality. In some countries, such as Ukraine or Poland, the quality of offshore software development is pretty high and supported by an extensive educational background.
Outsourcing is not always about just hiring developers, it’s also about obtaining proper & deeper tech expertise. As experienced as it can be, your in-house team would never provide such a wide perspective as developers who work offshore.
Their key advantage is their diversified portfolio.
While working in outsource, developers deal with numerous databases, dozens of languages and tackle hundreds of totally different business problems. That’s what makes the offshore team so precious. Having worked on projects similar to yours, an offshore software development company can refine your idea while avoiding mistakes you could have made.
Offshore development is also time-saving. Hiring a remote development team frees you from wasting time and money on resource-consuming HR and admin processes: candidates interviews, recruiting procedures, onboarding, risks of quitting, pages of internal documentation and on and on. Your outsourcing partner is now responsible for all these ‘headaches’, while you can go directly to development.
Additional professional perspective
Having a business idea or a project in mind, it’s super important to discuss and analyze it with a professional team who will give you fair and qualitative feedback. That’s where outsourcing may come in handy, too.
Offshore software development means to pass your project to a whole team of professionals including business analysts, marketing specialists, UI/UX designers and project managers. They can give you a fresh perspective on your business idea, outline some ways to optimize it if necessary, and find your strong and weak points.
The time difference is generally considered as a negative factor in the development process. Yet, sometimes it can play in your favor. Consider time shift as a bonus which allows you to see the results of your late evening comments early in the morning. While you’re sleeping, your outsourcing partner is working to make your app slick.
How much time and money will you save with an offshore development crew?
It’s hard to give you any figures out of nothing, Your project costs will depend on numerous factors, some of them are:
- Type of the project
- Vendor and his location
- Platforms to use
- Set of features
- Design complexity
Time Zone Difference
Time differences can be crucial for a project's success. Let’s take, for instance, the US and Eastern Europe. For these countries, the time difference can go from 7 up to 12 hours which might bring some constraints, but it’s not always the case.
Even in our experience we had cases when such a time difference turned out to be a big advantage for our American clients. They recognized our time zones as absolutely perfect for combining personal life & their business.
When the American workday reaches its end, Ukrainian or say Polish people are just beginning theirs. Mix that time hardships with a 24-hour development cycle and you get a positive outcome with continuous work on a project and tech support for whatever problem there is.
How software development rates are formed
Offshore software development rates surely differ. But why? Obviously, you are aware of some basic price-constituting factors, but still, let’s quickly overview them.
- Technology stack: the rarer and more complex stack you need for your project, the higher developer skills you require. Consequently, the developer’s rate per hour will go up.
- Outsourcing destination: as we have mentioned before, the region’s specifics define the development costs. Countries with higher living standards set bigger rates respectively.
- Experience & reputation: the more experienced team you choose, the higher fares they charge. The same goes with the reputation. Basically, you pay more for security and reliability of your project’s results.
- Team size: you pay for every specialist engaged in your project. The bigger scope of works and roles — the higher cost.
- Cooperation model: in general, outsourcing can be split into two basic options — IT outsourcing as it is or IT outstaffing.
Outstaffing presupposes that every member of your team is hired specifically for your project. So, all HR and administration processes are done by the vendor, while you have to manage a development process. With this model, you primarily save money by doing project management yourself.
With IT outsourcing, you hire the in-house team of another company. In this case, project management is on the side of the outsourcing partner. While such a model may cost more, it puts the responsibility for achieving your project goals on the partner and enables you to concentrate on some strategic activities. Besides, outsourcing also offers various payment models: dedicated teams, time & material and fixed price.
Wrapping Up: Offshore Software Development
So, you’ve already settled with a destination you’ll outsource your development . What’s next? It would be right to reach out to top local outsourcing companies and see what they offer. Let us tell what to expect at that stage.
At Fulcrum, when a company reaches out to us with their product development idea, we have a set of processes that we immediately start doing. To be precise, based on the product information & requirements we got, we create:
- Suitable tech stack & functionality
- Project Roadmap
- Timeline & Cost
We do it for every customer we work with. In case, you want to have all this done for you – make sure to reach out and tell about your wow idea.
FAQ: Offshore Software Development Rates by Country
How to hire offshore software developers?
To hire an offshore development team, you should keep in mind rates, development quality, culture, expertise, time differences, and other factors. When it comes to rates, there are two big pools of outsourcing destinations:
- Countries/regions with high-quality life standards and stable economies - the US, Australia, Western Europe, Israel, UAE, etc. The rates vary from $50 to $150.
- Regions with less developed local markets - Latin America, Afrika, Asia and Eastern Europe. They have lower offshore development rates.
Why do offshore software developers rates differ?
Software rates differ from region to region based on the following factors:
- Technology stack - the rarer and more complex stack you need for your project, the higher developer skills you require.
- Outsourcing destination- countries with higher living standards set bigger rates.
- Experience and reputation - the more experienced team you choose, the higher fares they charge. You also pay more for the security and reliability of your project’s results.
- Team size - the bigger scope of works and roles the higher cost.
What are the outsourcing rates in Ukraine?
Average offshore software development rates in Ukraine are around $25-50 per hour. Everything depends on a person's expertise and experience.
What are the benefits of offshore software development?
Offshore software development is beneficial in many ways:
- Most developing countries with low income per person (e.g. Ukraine, Brazil, India, Algeria, Russia) offer more affordable outsourcing rates due to their less elaborated economy.
- Outsourcing also means getting proper and more profound tech expertise. Developers deal with numerous databases, dozens of languages and tackle hundreds of totally different business problems. Having worked on projects similar to yours, an offshore software development team can refine your idea while avoiding mistakes you could have made.
- By hiring a remote development team, you free yourself from wasting time and money on resource-consuming HR and admin processes.
- Offshore software development means passing your project to a team of professionals in their field, including business analysts, marketing specialists, UI/UX designers, and project managers. They can give you a fresh perspective on your business idea, outline some ways to optimize it if necessary, find your strong and weak points.
- While you are out of the office or stay with your family after a long working day, your outsourcing partner is working to make your app slick.