Offshore Software Development Cost and Rates Breakdown for 2024

Offshore software development involves outsourcing tasks to teams in other countries, offering access to skilled talent at lower costs, though with less proximity compared to nearshoring. These teams typically handle tasks like software design, coding, testing, and maintenance, collaborating closely with the client’s in-house team to deliver quality products.

By leveraging offshore development, businesses can reduce expenses, focus on core objectives, and accelerate project timelines. Today, drawing from Acropolium’s 20+ years of experience in custom software solutions, we’ll break down offshore developer rates and what affects the cost in different countries.

Factors Influencing the Cost of Offshore Software Development

High costs drive many businesses to offshore their software development projects, as developing on-site can be up to 60% more expensive. In 2024, the offshore software development market is valued at $122 billion and is expected to grow to $283 billion by 2031 due to its impressive cost-effectiveness.

Offshore development pricing, however, varies by country and are influenced by several factors:

• Project complexity and size. More features and advanced elements, like AI, increase costs.
• Required technologies and expertise. Specialized skills or less common tech stacks raise expenses, while widely used technologies are more affordable.
• Maintenance and support. Ongoing costs for updates and bug fixes should be factored into the budget.
• Pricing model – The choice of a fixed-price, time and material, or dedicated team model affects overall costs.
• Rates in the selected market. Developer salaries differ by region, ranging from $1,900/month in Bulgaria to $9,200/month in the U.S., allowing flexibility in budget planning.

Now, let’s take a look at the seven most popular outsourcing regions and the average monthly salaries of software engineers in each, based on Glassdoor data.

Eastern Europe (Poland, Ukraine, Lithuania, Czech Republic)

Known for balancing cost with quality, Eastern Europe boasts over a million software developers and 4,500+ top-rated companies. Monthly salaries range from $900 to $2,100 for Junior engineers, $2,500 to $4,400 for Middle, and $4,400 to $6,100 for Senior engineers.

Western Europe (Germany, the Netherlands, Austria, Switzerland, Belgium)

It’s one of the priciest regions due to high living costs and strong economies. Junior engineers earn around $4,300, Middle engineers $6,200, and Senior engineers $7,400 per month.

North America & Australia

The U.S., Canada, and Australia lead in tech but come with the steepest prices. Monthly salaries average $6,700 for Junior, $9,200 for Middle, and $11,900 for Senior engineers. Small startups may find these costs prohibitive.

Scandinavia

With strong economies and high living standards, the Nordic region is another expensive choice. Salaries are around $4,550 for Junior, $6,140 for Middle, and $8,000 for Senior engineers per month.

The UK

The UK’s booming tech industry offers competitive salaries, averaging $4,800 for Junior, $6,400 for Middle, and $7,900 for Senior engineers per month.

Latin America

Countries like Brazil and Argentina are popular due to their proximity to the US and more affordable rates. Salaries range from $1,200 to $3,500, depending on experience and location.

Asia Pacific (India, Vietnam, the Philippines)

Despite time zone differences, Asia remains a top outsourcing destination due to its low costs. Monthly salaries are about $500 for Junior, $750 for Middle, and $1,100 for Senior engineers, making it one of the most cost-effective regions.

Comparison of Top Offshore Software Outsourcing Countries

Ukraine

Home to tech giants like WhatsApp, Grammarly, GitLab, and MacPaw, Ukraine has emerged as a leading offshore software development hub in Eastern Europe. Over 1,000 international companies outsource development to Ukraine, drawn by its competitive rates and high-quality services.

Pros:

• Strong English proficiency – Ranked 45th in the EF English Proficiency Index, with most developers at a B2 level or higher, ensuring seamless communication.
• Vast talent pool – Over 200,000 engineers and 1,000+ development companies, backed by strong STEM education from over 400 technical universities and 23,000+ tech graduates annually.
• Innovative tech ecosystem – Ukraine boasts a growing number of successful startups, offering expertise in modern architecture and innovation.
• Cost-effective rates – Some of the lowest in Eastern Europe, starting at $15/hour, providing a cost advantage without compromising quality.

Cons:

• Time zone difference – A 7+ hour gap with the US can create scheduling challenges.
• Political instability – Ongoing war started by Russia may pose risks.

Ukraine’s thriving tech sector, strong English skills, and budget-friendly rates make it a wise choice for companies seeking reliable offshore development partners.

India

India stands as a dominant player in the global tech outsourcing market, known for its vast talent pool and competitive pricing. It is one of the most popular destinations for software development outsourcing, particularly for businesses looking to scale affordably.

Pros:

• Extremely low costs – Among the lowest rates worldwide, making it highly attractive for budget-conscious projects.
• Strong English proficiency – As one of the largest English-speaking nations, communication is rarely a barrier.
• Huge talent pool – With 5.8 million developers, India offers a range of skilled talent with robust expertise.
• Established tech market – An impressive $254-billion technology landscape, supported by robust infrastructure.

Cons:

• Inconsistent quality control – Standards can vary across providers, leading to potential quality concerns.
• Significant time zone gap – A 9+ hour difference with the US can complicate collaboration.
• Cultural and work ethic differences – Communication challenges may arise due to differing work styles and expectations.

Brazil

Brazil’s offshore software development market is rapidly growing, especially appealing to North American startups due to its geographic proximity and cultural alignment.

Pros:

• Affordable rates – Some of the most competitive prices in the global market.
• Strong tech infrastructure – Brazil boasts over 13,000 startups and a well-established tech ecosystem.
• Convenient time zone overlap – Particularly beneficial for US-based clients, allowing smoother collaboration.

• Skilled workforce – With over 750,000 active developers and high-quality STEM education, Brazil is a reliable source of tech talent.
• Cultural similarities with the US – Makes for easier communication and alignment on projects.

Cons:

• Language barriers – English proficiency remains low, with only 5% of the population speaking the language fluently.
• Time zone differences with Europe – A 5+ hour gap can hinder real-time collaboration with European clients.

Brazil’s combination of affordability, talent, and convenient time zones makes it a prime option for North American companies looking for offshore development partners.

Offshore Software Development Rates by Country, Region & Expertise

Here’s a brief summary of offshore software development rates by country, varying by seniority level, according to data from Upwork and Indeed.

If you don’t have in-house professionals, outsourcing talent is a viable option, with several ways to find the right developers. For freelancers, platforms like Upwork and Fiverr offer a wide selection of specialists, allowing you to filter by technology, ratings, and hourly rates. To hire agencies, review sites like Clutch or GoodFirms provide ratings, project costs, and feedback for top service providers. Alternatively, consulting and recruitment agencies can handle the entire hiring process for you, leveraging their networks and expertise.

Below is a table showing development prices by region and expertise.

Offshoring Software Development with Acropolium

When considering software outsourcing, understanding regional developer rates is key. Still, it’s also important to choose the right pricing model and type of vendor. With over 20 years of global experience, Acropolium has succeeded in 450+ projects, building scalable solutions that align with client business goals. Our expertise covers integrating advanced technologies like AI, IoT, blockchain, and cloud solutions.

For instance, we developed an AI-powered pharma app that improved efficiency by 30%, enhanced patient engagement, and reduced data breach risks by 25%. We also created a blockchain-based supply chain platform for an oil and gas company, optimizing transparency, automating processes, and reducing costs through IoT and smart contracts.

When considering software outsourcing, understanding regional developer rates is key, but it’s also important to choose the right pricing model and type of vendor. Acropolium’s subscription-based service offers a cost-effective approach, covering popular software development needs with no hidden costs.?

Contact our team to explore how this innovative model can save costs and boost product quality!