This article breaks down the fully loaded cost of US versus nearshore developers, highlights where companies make mistakes in financial planning, and shows how the nearshore model helps leaders build stronger teams without compromise.
What makes up the “fully loaded” cost of a developer
When calculating the real expense of a hire, salary is only the starting point. US-based developers often require:
- Base salary. The largest direct cost, often $120,000–$160,000 annually for senior roles.
- Benefits and perks. Health insurance, retirement contributions, wellness stipends, and bonuses add significant overhead.
- Payroll taxes and compliance. Federal and state taxes increase costs by 7%–10%.
- Recruiting and onboarding. Agency fees, internal HR time, and training often cost 20% of annual salary.
- Turnover risk. Replacing a single senior engineer can cost as much as 50% of their salary when factoring in downtime and knowledge loss.
Nearshore hiring in LatAm shifts this equation. Developers in markets like Colombia, Brazil, and Mexico command lower salaries while offering aligned time zones and strong technical skill sets.
Cost comparison: US vs Nearshore
US-based hires typically result in a fully loaded cost that is 30%–40% higher than base salary. For example:
- A $140,000 base salary can rise to $190,000 after benefits, taxes, and overhead.
- Replacement costs from turnover add further unpredictability.
Nearshore hires from LatAm offer:
- Annual salaries that are often 50%–60% lower than US equivalents.
- Streamlined benefits packages, typically managed through an Employer of Record.
- Reduced payroll and compliance complexity.
- Lower attrition rates when local support and career pathways are in place.
Where companies miscalculate
Executives frequently underestimate three categories:
- Turnover costs. Failing to account for lost productivity during backfills.
- Compliance overhead. Not factoring in hidden legal and tax obligations.
- Retention investment. Skimping on culture and engagement for remote teams, which leads to churn.
How Howdy.com provides a better model
Cost savings only matter if paired with quality and stability. Howdy.com combines competitive pricing with a complete infrastructure that makes nearshore hiring seamless.
- Elite LatAm talent sourcing. Access to the top 1% of vetted engineers across major LatAm tech hubs.
- Rigorous vetting protocol. Identity verification, live technical assessments, and cultural fit evaluations ensure only top performers join your team.
- Retention support. In-region HR, office hubs, and a Working Style Matrix™ that delivers a 98% retention rate.
- Transparent pricing. A simple monthly invoice, free of hidden costs.
Conclusion
The fully loaded cost of a developer goes far beyond salary. US-based hiring comes with significant overhead in benefits, compliance, and turnover. Nearshore hiring, when managed correctly, delivers cost efficiency while maintaining quality and alignment.
For executives balancing budget pressures with the need for elite engineering talent, nearshore partnerships are the clear solution. With Howdy.com, you gain not just cost savings but a trusted partner who delivers vetted, high-performing engineers ready to integrate seamlessly with your team.