The cost of offshoring software development or IT services depends on the location, team size, skill requirements, and the model you use (freelancer, staffing, or managed service). On average, companies that offshore to regions like South Asia (India, Philippines) or Eastern Europe see a 40-70% cost reduction compared to US-based teams. However, those savings can come with hidden costs—time zone misalignment, communication delays, and cultural barriers2024 Crack the Nearshor….

Typical hourly rates

India, Philippines: 15–35 USD/hour (for mid-level developers)

Eastern Europe: 25–55 USD/hour

LATAM: 35–85 USD/hour

LATAM nearshoring is often priced a bit higher than Asia, but you gain English fluency, cultural alignment, and timezone overlap, which can save you money long-term by speeding up delivery and reducing rework.

Hidden costs to consider

Project management: If you need heavy oversight, you may spend more on PMs or travel.

Communication: Delays due to timezone gaps can slow projects, requiring more resources.

Turnover: Offshore regions with low retention may lead to more ramp-up and knowledge transfer costs.

Security and compliance: Protecting IP and meeting US data standards may add costs.

Engagement models

Freelance/contract: Lowest upfront costs, but you manage quality and risk.

Staffing firm: Higher rates, but access to pre-vetted talent and basic HR support.

Managed service (like Torc.dev): Premium pricing, but you get end-to-end team management, oversight, compliance, and ongoing support.

Total cost of ownership
Calculate not just the hourly rates, but also the productivity, risk, and project outcomes. LATAM teams often deliver more value per dollar by staying in sync with US time zones and business culture, reducing project overruns.

Summary
Offshoring can save you 40–70% over US-based development, but total costs vary based on region, retention, and management level. LATAM nearshoring is increasingly popular for companies who want cost savings plus collaboration benefits, with pricing that’s still far below US rates and faster time to value.