World map Top Offshore Countries for Development

Offshore Developers — Rates in 2021: Best Countries and Best Platforms to Hire a Remote Development Team

The Average Cost of Software Development Services

With modern technologies, you can outsource software development to an overseas programmer team and thus save costs. Offshoring also opens the doors to global talent pools. However, the average cost of software development services still greatly varies from country to country. Additionally, product development costs may change depending on a tech stack, seniority of a developer, hiring model, and a platform that you use to hire offshore developers.

In this article, we will analyze the offshore software development rates by country, seniority, and give some tips on how to hire offshore developers reasonably well. We’ll be using data from reliable sources such as PayScale, SalaryExpert, Indeed, Upwork, TopTal, and us — YouTeam, a marketplace for on-demand engineering staff augmentation.

RegionAverage software development hourly rateEase of doing business*
Political stability**
North America$55840.3
Western Europe$6680.30.7
Eastern Europe$3773.70.4
Latin America$5065.7-0.1
Asia Pacific$2865.5-0.7
Africa$3166.1-0.9

Regions Overview, 2021

*According to The World Bank, the max score is 100
** According to The World Bank, scale from -2.5 to 2.5

    Please, always remember that average rates can differ a lot from the actual price for software development services and this is why:

  • average rate combines rates for different technologies; some of them are the mainstream and less paid, other — more unique and will cost way more;
  • average cost combines rates of junior and senior developers, and the first ones are the majority of the market;
  • developers with good English, communication skills, and a proactive approach are always in demand therefore they are paid more than average.

Along with that, in this article, we tried to give the most realistic estimation of the hourly rate you need to pay for an experienced developer ready to work on international projects. We hope you will find it useful.

And now let’s try to understand what market processes lead the global software development market to the current situation.

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Current Situation on IT Hiring Market in 2021

According to our recent study, US-based startups prefer to hire senior software engineers. You rarely find a job opening for a junior or even middle position. Many reasons can be behind this such as the necessity for startups to perform fast to be able to survive in a changing environment, the need for strong leaders in each role, limited resources that make it impossible to hire and manage a big dev team, or even the opposite receiving funding rounds that open new horizons. A similar situation is also observed in Western Europe (especially Germany and Netherlands) where many European startups are concentrated.

Huge demand and a limited supply of senior engineers in these regions lead to the raise of salaries and intense rivalry for available resources. And if big enterprises can afford to pay the highest prices and win this competition, most of the startups have to look for talent in countries with lower living costs. This is how Eastern Europe, Latin America, Asia, and Africa became known as regions for offshore software development.

But last year the whole world dove into a new, pandemic-related, digital era with accelerated tech transformation. Together with the constantly growing over the last years tech trend, it caused a tremendous increase in demand for software development services. Even the offshore outsourcing regions experienced a talent shortage. Finding an engineer with a relevant tech stack and 5-8 years of work is getting harder. Therefore, offshore software developer’s salaries have reached totally new levels. Let’s learn more about it.

How Did Offshore Software Development Rates Change Over the Last Year?

The first time this article was published on our blog was at the beginning of 2020. But since market conditions are changing constantly, we update this piece of content every now and then. In June 2021, we decided to compare the rates that we published in this article at the very beginning with the current market prices on software development. 

With no surprise, compensation for development services has increased for almost all technologies by more than 7%. In the case of senior developers, this number is even bigger 10%.

Technologies, where the raise was the most significant, were Python, React Native, ReactJS, Ruby on Rails, NodeJS, Java, and PHP. These developers got an increase in payment up to 15% compared to the previous year.

Software Development Hourly Rates by Region in 2021

Now we’ll give an overview of regions and offshore software development rates by country to help you make a more informed decision when hiring from overseas. We’ll be reviewing Eastern Europe, Latin America, Asia, and Africa. But first, let’s take a look at rates in the United States and Western Europe – countries with the highest demand for offshore software development – and then compare the rates with those in offshore countries.

Software Development Rates in North America and Western Europe in 2021

According to Indeed.com, the average base hourly rate of a software engineer in the United States makes up $46.32 per hour as of 2021. This number may vary depending not only on the experience and technology but also on location. Here are some examples of rates in various states:

StateAverage Salary, $ per hourJunior Engineer Salary, $ per hour
Senior Engineer Salary, $ per hour
California$56.46$52.76$71.03
New York$54.54$50.96$68.61
Texas$44.78$39.34$52.96
Washington$58.01$46.12$62.10

Region Overview: the United States, 2021

Similarly, in Western Europe, the rates can vary by country, for example:

CountryAverage Salary, $ per hourEase of doing business, out of 100Political stability, from -2.5 to +2.5
France$5476.80.3
Germany$6179.70.6
Netherlands$6976.10.9
Sweden$52821.1
United Kingdom$9383.50.5
Region’s average$6679.620.68

Region Overview: Western Europe, 2021

Now let’s proceed with the rates in offshore countries.

Offshore Software Development in Eastern Europe in 2021

Map Eastern Europe

According to a report issued by AVentures Capital, Aventis Capital, and Capital Times at the beginning of 2019, Eastern European countries such as Ukraine, Belarus, Poland, and Romania are now among the top 5 global software development centers. The total volume of IT exports from these countries was about $13 billion.

Other noticeable players in this region are Czech Republic, Hungary, Bulgaria, Croatia, Serbia, and even Moldova.

Here are some other numbers regarding the state of the IT industry in the Eastern European region:

  • $5 billion: the profit of the 477 IT companies that participated in the research.
  • 700,000: the number of IT specialists in the region (since this report, the number of IT talent has reached 900,000 professionals and is constantly growing).
  • 60,000: the annual number of graduates from tech universities.
  • 20-25%: annual revenue growth in the region.

According to Coursera’s Global Skills Index 2020, Belarus, Ukraine, Czech Republic, Poland, and Hungary made it to the world’s top in the Technology category which includes Software Engineering, Databases, Security Engineering, Operating Systems, Computer Networking, and Human-Computer Interactions. And Belarus, Hungary, and the Czech Republic are Eastern European countries that got to the world’s top in Data Science that includes such trending skills as Python, SQL, R, and others.

More about outsourcing destinations in Eastern Europe

Offshore Software Development in Ukraine in 2021

Conveniently located in the center of Europe, Ukraine has been attracting foreign investors since the late 1990s and early 2000s, when the first software outsourcing companies started appearing in the country. Here are some numbers and facts regarding the state of the IT industry in the country:

  • According to the State Statistics Service of Ukraine, in 2019, IT service exports from the country grew by 15%. Now it makes up 16% of the export of all services, which in total brought the country $15.23 billion. In 2020, Ukrainian IT exports exceeded $5 billion in a year.
  • According to HackerRank test results, Ukrainian developers are 11th in the world in terms of tech skills. About 85% of tech professionals have at least an intermediate level of English.
  • As of 2019, there were about 160,000 IT professionals in Ukraine employed at nearly 4,000 IT companies. In 2021, this number is over 200,000 tech specialists.
  • The country’s IT industry grows by about 26% a year.

Clearly, there are many pros of outsourcing software development to Ukraine and it fairly earns its place in the rating of offshore software development rates by country.

More about software developers from Ukraine

Poland as an Offshore Development Destination

Poland is one of the most expensive countries for software development outsourcing in the Eastern European region. At the same time, it’s one of the safest and stable economies in the region. The government is constantly supporting the Polish IT industry. Thanks to this Poland became the home of R&D offices to many international corporations including Google, Intel, and Siemens.

One of the biggest benefits of this country is that it is a member of the European Union. That makes it extremely attractive to Western European companies sharing the legal and geographical space with it.

Fun fact: apart from its own IT graduates, Poland is constantly growing its talent pool by headhunting the best engineers from Ukraine. As many software outsourcing companies operate on both polish and Ukrainian markets, they can easily relocate engineers to the country with the higher living and software development cost.

More about software development outsourcing to Poland

Average Software Engineer Hourly Rate by Country in Eastern Europe in 2021

The cost of development is very important when a company’s looking for a long-term partnership. At the same time, the ability to build safe relationships with your offshore developers is an even more essential parameter for choosing an outsourcing region. For your convenience, we combined the average hourly rate for software developer talent in other Eastern European countries with an Index of Political Stability and Ease of Doing Business according to The World Bank.

CountryAverage software development hourly rateEase of doing business, out of 100
Political stability, from -2.5 to +2.5
Belarus$3174.30.3
Bulgaria$38720.5
Croatia$2873.60.8
Czech Republic$3876.31
Hungary$4373.40.7
Poland$4476.40.5
Romania$2973.30.5
Ukraine$4170.2-1.5
Region’s average$3773.70.4

Region Overview: Eastern Europe, 2021

More about risks of working with European developers

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Offshore Software Development in Latin America in 2021

Latin America Region Map

According to IDC, the Latin American IT industry will be growing in 2021 despite political uncertainty and low economic growth. As predicted by Ricardo Villate, vice president of the consultancy for the region, the IT market reached 4.8% in 2020. IDC reports an increase in business spending on technologies related to AR/VR, AI, IoT, 3D printing, cloud, security, and robotics.

Argentina and Chile made it to the world’s top 30 in Data Science (Machine Learning, Data Management, Data Visualization, Statistical Programming) according to Coursera.

More about offshore software development in Latin America

Offshore Software Development in Brazil in 2021

Brazil is one of the leading software outsourcing countries in Latin America and South America. According to an earlier study by Agile Engine, Brazil is the country with the greatest number of software engineers in the region – over 400,000. Additionally, Brazil is in second place among the top 50 digital nations in the Tholons Services Globalization Index 2019. The average software developer hourly rate in Brazil in 2021 is $44.

More about software development in Brazil

Top Performing Outsourcing Destinations in Latin America

Despite the fact that Brazil is the biggest country in South America, and consequently has the biggest talent pool, more often companies prefer to refer to other Latin American countries in their search for engineers. The simple reason behind this is that Brazil is the only country with a population speaking in Portuguese. While the rest of the continent uses Spanish. So it’s easier for companies to expand hiring to several different countries, knowing that their overseas developers will perfectly understand each other.

One of the most popular countries for nearshore software development is Mexico which is close to the United States, has developers that are used to working with US clients, and perfectly understand their business culture.

The second and third offshore development countries of the region that we want to mention here are Argentina and Panama.

  • As per the same study by Agile Engine, Argentina is ranked 14th among the best software outsourcing countries and is number 2 in the region. It is also the world’s 10th digital nation in the Tholons Services Globalization Index 2019.
  • According to the World Bank Group, Panama is one of the fastest-growing major economies during the last couple of years, with an incredible technological advance in the IT market.

More about nearshore software development in Argentina

Average Developer Hourly Rate by Country in Latin America in 2021

The latest data shows that the average software developer hourly rate in Latin American countries is higher than in Eastern Europe, while stability scores are lower.

CountryAverage software development hourly rateEase of doing business, out of 100
Political stability, from -2.5 to +2.5
Argentina$6159-0.1
Bolivia$3351.7-0.6
Brazil$4459.1-0.5
Columbia$5170.10.5
Costa Rica$4469.20.2
Chile$5572.6-0.7
Mexico$6172.4-0.1
Peru$3968.71
Uruguay$6161.5-0.9
Region’s average$5064.9-0.1

Region Overview: Latin America, 2021

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Offshore Software Development in Asia in 2021

Map of Asia Region

A pioneer of software outsourcing, Asia boasts the biggest number of offshore software developers as compared with other regions. In 2018, only in India, this number amounted to almost 3 million.

China is also an attractive offshore development destination. Chinese developers are the first across all HackerRank challenges. The Chinese government supports the tech sector by offering economic incentives. For example, now there are more than 50 science and technology industry parks across the country.

In the Philippines, Cebu City is the country’s fastest-growing IT industry with over 200 offshore companies and 95,000 tech positions to fill. The Philippines ranks 5th among the top 50 digital nations in the Tholons Services Globalization Index 2019, with the capital Manila being the world’s second super city.

Offshore Software Development in India in 2021

India is the leading software outsourcing country in Asia, also being a top digital nation in the Tholons Services Globalization Index 2019. Indian software development companies are known for delivering one of the most cost-efficient outsourcing of web development processes. Every year, more than 120K IT specialists graduate from the country’s tech universities. In 2016, India was nominated as the second country in the world with the greatest number of STEM graduates – 2.6 million. The average developer hourly rate in India is $30.

More about software developers from India

Offshore Developers Hourly Rate by Country in Asia in 2021

The index that reflects the ease of doing business in the Asia Pacific region is similar to the one that has LATAM countries. At the same time, the situation with the political stability of this region is way worse than the previous region has.

The 2021 offshore hire rates in other Asian countries are as follows:

CountryAverage software development hourly rateEase of doing business, out of 100
Political stability, from -2.5 to +2.5
Bangladesh$2845-0.9
China$2877.9-0.2
India$29710.1
Malaysia$3381.5-0.5
Nepal$2863.2-0.9
Pakistan$2561-0.2
Philippines$2862.8-0.7
Sri Lanka$2861.8-2.2
Region’s average$2865.5-0.7

Region Overview: the Asia Pacific, 2021

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Offshore Software Development in Africa in 2021

Map of Africa Region

Africa’s IT outsourcing market is only emerging, but it has already demonstrated rapid growth and is now attracting overseas clients. It is predicted that the increasing number of the region’s young population will drive demand for high-quality service sector jobs and the country will soon enter the list of the best countries to outsource software development. 

  • North Africa, specifically Egypt, Morocco, and Tunisia, has quickly become a key outsourcing destination thanks to the time zone compatibility with Europe and a small time-zone gap with New York. Besides, Morocco and Tunisia attract clients from France because of the same language. North African programmers have expertise in technologies such as Python, Ruby, and SQL.
  • South Africa is another preferable destination thanks to insignificant time zone differences and high proficiency in languages such as English, German, and Dutch. Besides, the region is featured in the Tholons Digital Nations and Super Cities rankings. South African developers are skilled in C++, PHP, and SQL.
  •  East African Kenya has a particularly high concentration of programmers. The capital Nairobi is home to thousands of Kenyan businesses, and the city’s infrastructure encourages technical innovation among young businesses and startups. East African developers are well-versed in Java, SQL, and mobile development.

Still, African countries show the worst results in international skill rankings.

Offshore Software Development Rates by Country in Africa in 2021

The recent data shows that the software engineer hourly rate in African countries is significantly lower than in any other outsourcing region. But for this, you will pay with the higher risks as this region has the worst stability index.

CountryAverage software development hourly rateEase of doing business, out of 100
Political stability, from -2.5 to +2.5
Egypt$2260.1-1.1
Kenya$2273.2-1.1
Morocco$2273.4-0.4
Nigeria$4456.9-1.9
South Africa$4467-0.2
Region’s average$3166.12-0.94

Region Overview: Africa, 2021

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Software Development Hourly Rates by Region in 2021: Conclusion

As you may see, the average cost of software development in offshore countries is far lower than in the United States or Western Europe. It can happen that even a senior software engineer’s hourly rate in an offshore country may be lower than the one of a junior or middle developer in the USA. Therefore, hiring offshore developers is the most cost-effective decision, because the cost of living in offshore countries is lower than in the US or Western Europe.

However, you must be careful when choosing a country to outsource software development services. Unfortunately, not all offshore countries offer a good price/quality ratio. A promising contract may end in paying twice because you’ll have to look for another offshore development team to correct the mistakes of the previous one. This often happens in Asian and African countries that offer the lowest software development rates.

Limiting your search to the best countries to outsource software development is only the first step to fruitful cooperation. You also need to keep in mind that working with remote employees requires establishing a clear system for communication and collaboration. Besides, it may be difficult for American and Western European clients to work with Asian developers because of significant cultural differences and an inconvenient time zone gap.

Benefits of Hiring Offshore Developers in 2021

In addition to affordable prices, you will get the following advantages if you hire offshore developers:

  • Access to a wide tech talent pool. The Wall Street Journal reports that in 2019, employers in the US had about 918,000 unfilled IT jobs. If your company belongs to these employers, outsourcing may be a solution.
  • No overhead costs. As offshore software development occurs remotely, you pay only for the services. In most cases, you do not have to bother about insurance, office space rent, perks, etc. – either developers themselves or an intermediary agency take over these costs.
  • More time dedicated to your project. If your remote employees work from home, they don’t spend time commuting and thus can devote the saved time to the project.

How to Hire Offshore Developers in 2021

There are several ways to hire offshore developers:

Freelance Portals

Hiring remote developers at freelance portals seems to be quite an attractive option and here’s why:

  • Vast tech talent pool – for example, Upwork features more than tens of thousands of profiles of offshore developers.
  • Quick hiring – it may take you less than a week to build an offshore development team of freelancers and sign contracts with them.
  • Remote cooperation – you pay only for the development services and do not incur any overhead costs.
  • Direct communication – you can talk or video chat with your team at the safe space provided by your freelance portal.
  • Low rates – to earn a reputation on a freelance portal, a freelancer needs to fill their portfolio with projects. To do that, they often agree to low-budget projects, though their rates “in real life” are typically higher.

At the same time, the cons are as follows:

  • Unreliability – freelancers can leave your project at any time because they are not bound by any official agreements.
  • Time zone differences – location in different time zones can be inconvenient for both you and your team because you have to catch up with each other.
  • Commission fee – you have to pay a processing fee for every payment you make through freelance portals.
  • Lack of commitment – freelancers can work on other projects except yours, so you cannot be sure that they will dedicate all of their time to your project only.

Outsourcing Companies

Collaboration with outsourcing companies is the most traditional way of forming an offshore development team. Such companies work with overseas clients and deliver software development services according to the clients’ project requirements. If you choose this hiring option, you will get the following benefits:

  • Reliability – the employment will be legal, with official agreements, so the developers cannot leave the project spontaneously, as freelancers would do.
  • No overhead costs – the outsourcing agency will overtake all of the expenses.
  • 100% commitment – the developers will be working only on your project until it is finished.

The drawbacks of outsourcing companies are:

  • Slow hiring process – due to bureaucracy, it may take months to form a team for your project.
  • Lack of communication – in most cases, a local project manager takes over the communication so you can rarely talk to your developers in person.

YouTeam Platform

YouTeam, a platform for hiring remote dev teams, combines the advantages of a freelance portal and an outsourcing agency. As a result, you get the following benefits:

  • Reliability. Each developer featured on YouTeam undergoes a multi-level vetting process, which includes the verification of skills through HackerRank for Work.
  • Quick hiring. With YouTeam, it will take you minutes to shortlist the candidates, one day to sign the contract, and a couple of weeks to kick off the project.
  • Direct hiring. You personally interview developers for your project and then, after they are hired, continue direct communication and management throughout the project. At the same time, in the case of any disagreement, a dedicated customer success manager from YouTeam will be there for you, coordinating the communication between the two parties.
  • No worries about financial and legal aspects. You pay only for the development services by using a secure payment system.
  • Dedicated teams. The team of your choice will appear as booked to other clients because it will be dedicated only to your project. Developers featured on YouTeam are not freelancers and thus cannot work on several projects simultaneously.
  • Scalable teams. Need to extend your team? No problem – you’ll get a re-scaled team within two weeks.
  • Flexible pricing. We have an individual approach to each client and are open to discussions regarding payment and offer discounts for long-term projects.

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Average Developer Hourly Rate on Hiring Platforms in 2021

Now let’s compare the software development hourly rates on three hiring portals: Upwork, TopTal, and YouTeam. These rates depend on several factors, such as language, platform, project scope, and geography. Based on these factors, the average rates as of 2021 are:

Upwork*,
$ per hour
TopTal*,
$ per hour
YouTeam**,
$ per hour
Web development15-13617-10525-80
Mobile development25-15021-11323-150
Front-end web development15-10032-10025-150
Back-end web development15-15036-10536-150

Developer’ average hourly rates on different hiring platforms, 2021

*Net developer’s salary — doesn’t include Toptal’s and Upwork’s commission.
**Final price for software development services, YouTeam doesn’t charge clients any commission.

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Developer Hourly Rate in 2021 Based on Technology and Experience

We at YouTeam have collected statistics on the average cost of software development per hour based on technology (e.g. .NET, JavaScript, Python, etc.) and experience (junior, middle, and senior). The information in the table below gives quite a good representation of the prices for software development because it’s aggregated from more than 270 outsourcing companies and thousands of developer profiles from across the world. The table below presents the minimum, maximum, average, and median rates for developers featured on our platform.

General YouTeam rates based on technology, 2021

YouTeam rates based on seniority, 2021

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Offshore software development: FAQ

What are the benefits of offshore software development?

The number one reason to consider offshoring is cost-efficiency. With offshore developers, you will not need to spend your funds on overhead costs such as office rent, payroll, insurance benefits, vacations, recruitment fees, etc. Additionally, offshore destinations provide access to talent that you would not find onsite. For example, most of the skilled software engineers in California are already employed by tech giants. On the contrary, offshore countries in Latin America and Eastern Europe are full of skilled developers that would gladly join your startup.

What is the top offshore destination for outsourcing US projects?

Today, many North American companies entrust top tech professionals from Latin America with their IT routine. The main assets include high-quality development services, real-time collaboration, cultural similarity, which are all beneficial for a business. Among Latin American companies, Brazil is the number one software outsourcing destination followed by Argentina and Panama.

What is nearshore software development?

Nearshore software in all ways similar to offshore development except for the fact that the locations you outsource are located nearby, thereby minimizing the time zone differences. Find out more in our ultimate guide to nearshoring.

The Bottom Line

Hiring a team of software developers for your project can be a daunting task. This is especially true if you’re based in the United States or Western Europe and are looking for tech talent in your region. It may take you quite a lot of time to spot perfect candidates at reasonable prices. However, to speed up the process and avoid unexpected expenses, you can hire an offshore programming team. If you are new to hiring remotely, it is important to familiarize yourself with the best countries to outsource software development and offshore software development rates by country so you can focus your search in an effective way.

For example, the average base hourly rate of a software engineer in California is $57.07 per hour as of 2021. For comparison, this is how much you would pay a mid-level developer in offshore regions:

  • Eastern Europe: $30-$40 per hour
  • Latin America: $30-$47 per hour
  • Asia: $24-$35
  • Africa: $22-$30

Such a difference is caused by the lower cost of living in offshore countries. In many cases, you would get the same quality as from local developers, but still, you must be careful when choosing a region to outsource software development services.

If you hire offshore developers for your project, you will get the following advantages:

  • Access to a wide tech talent pool
  • No overhead costs
  • More time dedicated to your project

There are several ways to hire an offshore software development team. 

Freelance portals will open up a vast tech talent pool for you. The hiring process will be very quick, and you’ll be able to directly communicate with your team. Besides, the prices can be quite low even for highly-qualified freelancers. This is because they are new to the portal and first need to earn a reputation. At the same time, freelance portals are unreliable, and freelancers can work on several projects simultaneously, while you need 100% commitment to your project.

An outsourcing company is a more reliable option. However, it may take them months to build a team for you. And in many cases, you will get neither direct communication with your team nor the opportunity to scale the team. The good news is — we have solved this issue at YouTeam.

Contact us today, and we’ll be happy to provide you more insights into the management of outsourced development.

Offshore development partner

Written by
Galina Divakova

Former Head of Marketing at YouTeam, a Y Combinator-backed marketplace for building remote dev teams.

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