To know how much it really costs to hire a software developer in India, Vietnam, China, Singapore read more details in this post. Let's consider the actual costs of hiring developers.
Most of the budget in software development consists of developer wages. However, if you work using the IT outsourcing model, this factor becomes less critical in forming the development rates.
Software developer salary in the United States differs significantly from those, for example, in Asia. Consequently, hiring a remote team, a customer can reduce costs several times without losing quality.
How to calculate hourly rate
To do this, you need to determine the number of hours worked per day (8 for a full-time employee) and multiply them by the total number of working days per year (250 in 2021 in the United States).
Then, divide the annual salary by that number.
For example, based on Indeed’s annual salary data, the average developer hourly rate in the US is: $110,390 / (8 * 250) = $55 / hour.
The price difference between hiring and contracting
Determining whether a person is an independent contractor or an employee is important because it determines whether payroll taxes are withheld. You must withhold payroll taxes from employee salaries, but you do not withhold taxes from payments to independent contractors (except VAT for contractors located in the same jurisdiction).
VAT varies from country to country, but on average is about 20%.
Let’s consider two options:
In the case of working with independent contractors, it’s simple – you pay them the agreed hourly rate or project amount.
In the case of hiring a full-time employee, besides the hourly rate you also pay additional costs:
- Training costs;
- Infrastructure costs.
Each country has its own legislation, but such costs, according to MIT, can reach on average from 25 to 40% in addition to the hourly rate.
Based on this, the developer’s annual salary turns from $110,390 to $110,390 + $44,156 (35% of 110 000) = $154,546 or $77 per hour.
*You can determine the amount of additional costs by examining the legislation of your country.
Prominent Outsourcing Destinations in Asia
This Asian country rides on its high population to provide inexpensive software development services of $25 and $50 per hour. This low cost however, comes at an expense of lower levels of skilled manpower.
China offers moderate rates (quite similar to Eastern Europe) and a vast talent pool of qualified IT professionals. Despite the quite affordable offshoring rates of $35–$60 per hour, China’s weak IP protection, however, poses a barrier for making the most of offshoring opportunities in this country. The Chinese government supports the IT industry by providing economic incentives and investing in technology parks where software experts are nurtured. The cost to hire app developers in the Philippines ranges from 8 to 40 USD/hour. Average rate – 20 USD/hour.
The cost to hire software developers in Vietnam ranges from 10 to 40 USD/hour. Average rate – 20 USD/hour. Vietnam is a new emerging market and an investment in the country is worthwhile with a 30% to 40% less expenses than China.
In 2017, Vietnam software outsourcing industry is ranked in top 10 of outsourcing destination in the world.
The cost to hire app developers in Singapore ranges from 25 to 60 USD/hour. Average rate – 35 USD/hour.
The cost of hiring app developers in Southeast Asia is the lowest in the world. However, the more economically developed Singapore and Vietnam clearly stands out among other countries.
WHY VIETNAM IS THE BEST PLACE TO HIRING SOFTWARE DEVELOPERS?
In Vietnam, though offering a vast educational opportunities, a prominent part of the IT education is focused on extracurricular junior and advanced training courses. Some companies offer free education with further employment opportunities. In total, more and more IT specialists graduate from the universities and private schools every year
Vietnam software and IT companies follow the global trends and tend to focus on science-based technology advancements exhibiting a lot of interest in Big Data & AI, mobile development, blockchain and cryptocurrency projects. One more peculiarity of the destination is the prevailing number of Senior developers over Middle and Junior software specialists. The expertise level of the specialists allow outsourcing companies to contribute to the success of the projects for leading fintech companies. Vietnam is also considered one of the best countries to outsource web development. Front-end skills along with Java, PHP programming are well-established areas with numerous successful web products
BEST OFFSHORE SOFTWARE DEVELOPMENT OUTSOURCING COMPANY IN VIETNAM
Currently in Vietnam there are thousands of software companies opened, but to choose a suitable and reputable partner is not easy. Therefore, we introduce our company - Aegona Ltd as the leading Offshore Software Development Outsourcing in Vietnam
Aegona is an IT service company based in Ho Chi Minh city, VietNam. At Aegona we provide Software Development, Software Testing, Automation Testing and Software Maintenance services with the power of more than 50 software engineers
Our mission is to deliver the best and most cost-effective software development offshoring and outsourcing solutions to customers in areas such as e-finance, ebusiness, logistic, transportation, healthcare, media, education, and other industries for North America, Japan, Singapore, United Kingdom, Malaysia, Australia and VietNam...
Aegona provide full-scale agile development:
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Building and sustaining an in-house team is expensive. In the long run, the costs of hiring talent, onboarding employers, investing in talent management software, paying office rent and electricity bills are considerably higher than that of working with an outsourcing React.js development company on a project basis.
Outsourcing React development in Vietnam is another efficient way to reduce development costs. A junior React.js developer based in Vietnam earns between $12 and $18/hour, so the project development costs are quite competitive compared to Southeast Asia. On average, Vietnam developers ’hourly rates are twice as low as those of their counterparts
We hope you can find the best partner for your business. Take a look at our portfolio to see the full range of projects our professionals have tackled. To discuss your idea — leave us a message via: