Key Takeaways
- The primary reasons to consider offshore software development include cost savings, access to a global talent pool, scalability, and flexibility.
- Ukraine, India, and Brazil are among the most popular destinations for software development outsourcing, where high-quality service meets affordability.
- In Eastern Europe, Junior Engineers typically cost $900-$2,100 monthly. Middle Engineers range from $2,200-$4,400, while Senior Engineers make around $4,400- $6,100 per month as of 2024.
Let’s be realistic. When you resort to offshore software development, your primary goal is to save costs without sacrificing the quality of the end product. And we support that. That’s why we want to help you figure out how to get the best bang for your buck.
Thanks to Acropolium’s 20+ years of experience in delivering custom solutions to the software development outsourcing market, in this piece, we’ll break down the key factors that constitute the cost of software development.
Read on to learn about the most popular destinations for outsourcing, and find out how much you will have to pay offshore developers and other specialists in different regions.
What is Offshore Software Development?
Offshore software development refers to the practice of outsourcing software development tasks to a company or team located in a different country. Similar to nearshoring, this approach also implies cooperation with developers from countries with lower labor costs, but lower proximity.
It allows businesses to access skilled talent at a reduced cost, focus on core activities, and potentially shorten development timelines. Offshore development teams typically handle a variety of tasks, such as software design, coding, testing, and maintenance, and they collaborate closely with the client’s in-house team to deliver the desired product.
The key benefits include cost savings, access to a global talent pool, and the ability to scale development efforts quickly. Hence, the offshore software development market, valued at USD 122 billion in 2024, is projected to reach USD 283 billion by 2031, growing at a 10.13% CAGR.
Offshore Software Development Rates by Country
Here’s a quick overview of offshore software development rates by country in companies depending on level of seniority, based on the data from Upwork and Indeed.
| Country | Junior Engineer | Middle Engineer | Senior Engineer |
|---|---|---|---|
| USA | $40-60 | $60-100 | $100-150+ |
| Australia | $45-55 | $55-70 | $75-120+ |
| Germany | $37-53 | $55-80 | $80-107+ |
| Brazil | $25-35 | $35-55 | $55-75+ |
| Finland | $32-48 | $48-70 | $70-96+ |
| Denmark | $43-64 | $64-92 | $92-128 |
| Poland | $15-25 | $30-45 | $45-70+ |
| India | $15-25 | $25-40 | $40-60+ |
While development is the bedrock of your project and heavily affects its quality and price, it will only succeed if specialists who can plan, budget, manage, and test your project are on board.
Average salaries of other specialists in different regions On top of software engineers, your development team can include:
- Quality Assurance (QA) Engineers (manual or automated)
- Project Manager (PM)
- Scrum Master
- Business Analyst (BA)
- Software Architect
If you don’t have professionals like these in-house, then be ready to invest in outsourcing talents from abroad. Here are their monthly salaries, according to the Scrum report:
| Region | Quality Assurance | Project Manager / Scrum Master | Business Analyst | Software Architect |
|---|---|---|---|---|
| Eastern Europe | $2,300 – 3,500 | $3,000 – 4,500 | $2,500 – 4,000 | $4,500 – 6,500 |
| Western Europe | $4,800 – 7,700 | $4,500 – 7,900 | $4,500 – 8,000 | $6,900 – 12,100 |
| North America & Australia | $6,500 – 12,000 | $7,700 – 10,200 | $6,500 – 8,500 | $11,000 – 15,000 |
| Latin America | $1,500 – 3,000 | $2,500 – 4,000 | $3,500 – 6,000 | $1,850 – 3,600 |
| Scandinavia | $5,500 – 6,700 | $5,500 – 7,700 | $7,000 – 9,700 | $8,300 – 12,600 |
| Asia Pacific | $580 – 1,000+ | $1,300 – 2,700 | $850 –1,100 | $2,700 – 4,000 |
5 Factors Affecting Offshore Software Development Rates by Country
Numerous factors affect the cost of offshore development. But your project’s estimation will most likely depend on the following five.
#1. Project complexity and size
The scope and complexity of features significantly influence costs. A product with more features or complex elements like AI algorithms will be more expensive than simpler projects.
#2. Necessary technologies and expertise
The choice of tech stack and required expertise — for example, in software migration and multi-tenancy — also affect costs. Popular technologies with many developers are generally cheaper. In contrast, specialized skills, like those of Rust developers, are pricier.
#3. Maintenance and support
Post-release maintenance, including bug fixing and software updates, adds ongoing costs that should be considered from the outset.
#4. Type of pricing model
The chosen outsourcing pricing or subscription model — fixed-price, time and material, benchmark-based, SdaaS, or dedicated team — impacts team composition, development time, and overall costs. Each model has its own advantages and limitations.
#5. Rates in the selected market
Developer salaries vary widely by location. For example, in 2024, a mid-level software engineer’s monthly salary can be around $1,900 in Bulgaria and $9,200 in the U.S.
Fortunately, custom software development outsourcing allows you to select a destination where the salary rates fit your budget. The difference in rates for development in different markets can be staggering, ranging from $2,600/month in Bulgaria to $13,300/month in the US for a Middle Software Engineer.
With this in mind, let’s see how offshore development prices vary across different regions and levels of expertise.
Software Development Monthly Salary by Region in 2024
Here’s a breakdown of the seven most popular development outsourcing regions and the monthly salaries of software engineers in them, according to Glassdoor.
Eastern Europe (Poland, Ukraine, Lithuania, Czech Republic)
With more than one million software developers, 4,526 highly-rated software development companies, Eastern Europe is popular for its balance of cost and quality. It offers monthly salaries around $900-$2,100 for Junior, $2,500-$4,400 for Middle, and $4,400-$6,100 for Senior Engineers.
Western Europe (Germany, the Netherlands, Austria, Switzerland, Belgium)
High living costs and strong economies make Western Europe one of the most expensive regions. Monthly rates average $4,300 for Junior, $6,200 for Middle, and $7,400 for Senior Engineers.
North America & Australia
The U.S., Canada, and Australia are top tech hubs, but high living costs, strong economies, and expensive education make these regions the most expensive for software development. The average monthly rates are $6,700 for Junior, $9,200 for Middle, and $11,900 for Senior Engineers.
If you are a small startup or have a large project requiring thousands of person-hours, developing software in this region will quickly drain your pockets.
Scandinavia
The Nordic countries are another costly destination due to their strong economies and high living costs. Average monthly salaries are $4,550 for Junior, $6,140 for Middle, and $8,000 for Senior Engineers.
The UK
With its vibrant tech scene, the UK offers salaries averaging $4,800 for Junior, $6,400 for Middle, and $7,900 for Senior Engineers monthly.
Latin America
Countries like Brazil and Argentina have become popular outsourcing destinations due to minimal time zone differences and lower rates. Monthly salaries range from $1,200 to $3,500, depending on location and experience.
Asia Pacific (India, Vietnam, the Philippines)
Despite challenges like time zone differences, this region remains a leading outsourcing destination due to low costs. Monthly salaries are approximately $500 for Junior, $750 for Middle, and $1,100 for Senior Engineers.
Now that you know the monthly salaries of software engineers, it’s a good idea to look into the hourly rates because software outsourcing vendors and freelancers often charge on an hourly basis.
Top Offshore Outsourcing Countries: Pros and Cons
Okay, now that we’re done with the rates and salaries, let’s look into the destinations. We’ve chosen the three most popular software development outsourcing destinations to show you their pros and cons.
Ukraine
The birthplace of WhatsApp, Grammarly, Gitlab, and MacPaw, Ukraine has rightfully become a popular destination for offshore software development in Eastern Europe.
Pros:
- Strong command of English — Ukraine ranks 45th in the EF English Proficiency Index, with the majority of Ukrainian tech professionals having at least a B2 level of English proficiency.
- A large pool of talents to tap into — over 200,000 engineers and 1000+ software development companies
- Top-notch STEM education — over 400 technical universities and 23,000+ tech graduates every year; plus №1 in the Science&Technology index
- Some of the lowest rates in Eastern Europe that start at $15/hour
Cons:
- Time zone difference of over 7 hours with the US
- Political instability
India
As a leading region in the Asian tech market, India is one of the world’s most popular destinations for outstaffing and outsourcing software development services.
Pros:
- Some of the lowest rates in the world
- Great English proficiency — India is among the most English-speaking countries in the world
- A vast pool of tech talents with a staggering 5,8 million developers
- A booming $254-billion technology market with a developed infrastructure
Cons:
- Lack of quality standards control
- Time zone difference of over 9 hours with the US
- Cultural gap and different work ethics that may lead to communication difficulties
Brazil
The booming Brazilian offshore software development market has a lot to offer, being especially popular among startups from North America.
Pros:
- Some of the lowest rates in the world
- Robust technological infrastructure with over 13,000 startups
- Time zone overlap with the US
- High quality of STEM education with over 750,000 active software developers
- Cultural similarities with the US
Cons:
- Potential communication challenges due to the cultural gap with Europe and a possible language barrier (only 5% of the population speaks English)
- Time zone differences of over 5 hours with Europe
Which country is the best fit for your project? That depends on your location, goals, and preferences. All three destinations offer excellent cost savings paired with high-quality development services. If you choose the right vendor, that is.
Is Ukraine a Good Location to Hire Offshore Developers?
Over 1,000 international companies choose to outsource software development to Ukraine. In fact, the company offers competitive rates compared to Western Europe and North America, making it cost-effective without sacrificing quality.
Additionally, Ukrainian developers are known for their strong English proficiency, with the majority possessing at least a B2 level, which ensures smooth communication with international clients.
Finally, Ukraine’s vibrant tech ecosystem, with a strong focus on innovation, modern architectures, and a growing number of successful startups, makes it a reliable and forward-thinking partner for software development projects.
Ukrainian development agencies have a strong record of comprehensive solutions, as well as mentions on Clutch, TechBehemoths, and other IT reviewing platforms. From legacy systems modernization to enterprise solution development, you can find a reliable Ukrainian vendor for projects of any complexity.
How to Hire Offshore Software Developers
To build a stellar offshore team that will deliver excellent results, you need to select the right platform and type of cooperation.
When it comes to hiring offshore tech specialists, you have four options.
Freelance platforms
Using freelance platforms like Upwork or Fiverr, you can hire independent specialists of any seniority level from all over the world. You can filter specialists by the technology type, rating, hourly rate, or the number of accomplished projects. You can also read reviews left by their previous clients to get a better picture of what to expect from the cooperation.
Review platforms
If you plan to hire an agency, the best place to explore your options and find the highest-rated contractors would be review platforms like Clutch or GoodFirms. They provide you with reviews and ratings of top service companies, their minimum project price tag, hourly rate, and the number of employees.
Consulting and recruitment agencies
If you don’t have the time or skills to source the best candidates, you can always hire a consulting specialist or a recruitment agency to do this for you. Thanks to an extensive network, a large pool of candidates, and a well-established recruitment process, they will do all the heavy lifting of the hiring process.
Direct references
If you know businesses that have successfully outsourced their product development to offshore contractors, you can always reach out to them for a recommendation. Direct references are most valuable when they come from reliable sources with similar goals and expectations from offshore software development.
Now you’re probably thinking that working with freelancers might not be a bad idea: they’re easy to find, and working with them is cheaper than contracting an outsourcing vendor. Technically, yes. But those savings will come back to bite you.
Why choose Acropolium?
Serving industries from all over the world for over two decades, Acropolium dedicated teams have realized 450+ projects and solutions. With client’s business objectives in mind, we build scalable applications, helping companies adopt the latest AI, IoT, blockchain, and cloud-based tech practices. And here are some of the numerous success stories from our partners:
One of our clients chose Acropolium as an offshore software development vendor to develop an AI-based pharma app, aiming to improve prescriptions accuracy and boost patient engagement. Utilizing AI/ML for automation and cloud computing for accessibility, we delivered a solution that increased operational efficiency by 30%. Simultaneously, the client improved customer retention by 15% while reducing the risk of data breaches by 25%.
With the aim to adopt blockchain technology, an oil and gas company tasked us with a secure supply chain platform to ensure operational transparency and strengthen compliance. Implementing blockchain technology enabled seamless tracking of goods from extraction to delivery, enhancing transparency and traceability across the supply chain. By automating processes with smart contracts and IoT integration, operations were optimized, reducing manual errors and cutting costs. Additionally, blockchain helped prevent fraud, counterfeit products, and unauthorized access to sensitive data.
Final Thoughts
When you decide to outsource software development, the rates of engineers in different regions are the first factor that will affect the cost. But it’s not the only one. You should also consider the pricing model, the country you’ll be outsourcing from, and even if you need to be looking for a vendor or a bunch of freelancers.
True, software development isn’t easy. But we know what can make the process easier. You could try Acropolium’s subscription-based service that covers the most popular requests for software development projects at an affordable monthly fee. No headaches. No hidden costs. All values.
Contact our team to discover how this revolutionary pricing model can save you money and ensure better product quality.
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