Free Tool
Offshore Development TCO Calculator
Salary is only half of what an engineer costs. Enter your market and team size to compare the real annual total cost of ownership of an in-house team against a dedicated offshore or nearshore team.
Your Inputs
Defaults to the 2026 median for the market you picked. Edit to match your offers.
US tech averages 13–20%. Each departure costs roughly six months of productivity.
Fully loaded managed rate for a senior engineer. Replace with any quote you have.
Share of the offshore cost you spend directing the team. 8–15% is typical with a good partner.
Annual Total Cost of Ownership
In-house team of 4
$974,171
Offshore team of 4
$184,800
Annual saving
$789,371
Saving
81%
In-house cost per engineer per year
Base salary
$145,000
Benefits and employer taxes
$43,500
Recruiting (amortised over tenure)
$11,393
Tooling, licences and office
$13,200
Management overhead
$17,400
Attrition and ramp-up
$13,050
Total per engineer
$243,543
Offshore cost per engineer per year
Dedicated developer (12 months)
$39,000
Your coordination time
$3,900
Tooling and licences
$1,800
Onboarding allowance
$1,500
Total per engineer
$46,200
How to Read It
What the numbers mean, and what they leave out
The in-house figure is what a senior engineer actually costs a company once benefits, recruiting, tooling, management time and attrition are counted. Most finance teams see only the salary line. The offshore figure is a dedicated senior developer on a managed model, plus the share of your own team's time spent directing the work, which a good partner keeps low and a poor one makes expensive.
What the calculator cannot show is quality of outcome. A cheap team that ships slowly or leaves you with code nobody can maintain costs more than either column. Use the saving as the reason to look seriously at offshore, then vet the partner on the questions in our guides to nearshore versus offshore and offshore versus in-house.
Our offshore development team and dedicated developer engagements are priced on the monthly model above, with EST, PST, GMT and Gulf hours committed in writing. To estimate a fixed-price project instead of a team, use the software cost estimator.
FAQ
Offshore TCO questions
What does this offshore TCO calculator include?
For the in-house side: base salary, benefits and employer taxes, recruiting cost amortised over expected tenure, tooling and office cost per seat, management overhead, and the cost of attrition and ramp-up. For the offshore side: the monthly dedicated-developer rate, a coordination overhead for your own team's time, tooling, and an onboarding allowance. Both sides are annualised for the team size you enter.
Why is in-house cost so much higher than salary?
Because salary is typically only 55 to 65 percent of what an engineer costs. Benefits and employer taxes add 20 to 30 percent, recruiting a senior engineer costs 18 to 25 percent of first-year salary, tooling and office run several thousand dollars a seat, a manager's time is consumed, and every departure costs months of productivity. The calculator makes these visible.
Is the offshore figure realistic?
The default rates are what dedicated senior developers cost on a managed model from Pakistan, India, Eastern Europe and Latin America in 2026, including the vendor's recruiting, HR, equipment and management. We add a coordination overhead on your side because a good offshore team still needs product direction. Adjust the monthly rate to any quote you have received.
When does offshore not make sense?
When the team is one or two engineers who need to be in the room with founders daily, when the work is undefined enough that direction changes hourly, or when the vendor cannot commit to overlapping hours in writing. The calculator will still show a saving in those cases, but the saving is not the whole story. Our nearshore versus offshore guide covers the trade-offs.
Next Step
Want these numbers for your exact team?
Tell us the roles and seniority you need and we will send a fixed monthly quote with the overlap hours, tooling and management included.
Get a Fixed-Price QuoteContact Us
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