Offshore Team Savings Calculator
"Hire in Pakistan, save 80%" is a pitch, not a plan. The real savings from offshore hiring are still substantial — but smaller than the salary gap suggests, once you account for management overhead, time zones, and setup costs. This calculator gives you the honest number.
Calculate your real savings
How this is calculated
The naive calculation is: onshore salary minus offshore salary. That's wrong, because it ignores benefits load, recruiting costs, and the management hours you'll spend that you wouldn't spend with a local hire.
The management overhead is the honest part most calculators skip. An offshore hire isn't just cheaper labor — it's labor that needs more guidance on context, communication, and cultural norms. Expect 2–5 hours/week of extra management time per hire, especially in the first 6 months. At $60/hour management rate, that's $6,240–$15,600/year per hire in added cost. It's still worth it, but the savings aren't as clean as the salary math suggests.
The onboarding load (typically 20–30% in the US/UK) covers health insurance, payroll taxes, retirement contributions, and workers' comp. Offshore contractors typically handle these themselves, so the onshore figure balloons while the offshore figure doesn't.
Worked example: 3 mid-level developers
A US-based startup pays $120,000/year per developer (before benefits). With a 25% benefits load, each developer's true cost is $150,000. They're considering replacing them with 3 Pakistan-based mid-level developers. Their management team's time is worth $60/hour, and they estimate 3 hours/week of extra management per hire. Recruiting cost is $2,000 per hire.
- Onshore loaded: $120,000 × 1.25 = $150,000/hire
- Offshore salary: $12,000 × 1.8 = $21,600/hire
- Management overhead: 3 × 52 × $60 = $9,360/hire
- Offshore total per hire: $21,600 + $9,360 = $30,960
- Onshore team cost: 3 × $150,000 = $450,000
- Offshore team cost: 3 × $30,960 + 3 × $2,000 = $98,880
- Year 1 savings: $351,120 (~78% reduction)
Even with the management overhead included, this is a massive saving. The point isn't that offshore hiring isn't worth it — it's that the "80% off" headline becomes more like "78% off after all real costs." Close enough to make the decision obvious, but now you know the actual number, not the pitch.
Hidden costs to budget for
The salary comparison isn't the whole picture. Here are the costs that surprise first-time offshore hirers:
| Cost | Typical range | When it hits |
|---|---|---|
| Recruiting / vetting fees | $500–$3,000 per hire | Upfront |
| Equipment & setup | $500–$2,000 per hire | First month |
| Time zone coordination tools | $50–$200/month total | Ongoing |
| Management & training time | 2–5 hrs/week per hire | Ongoing, especially first 6 months |
| Payment processing fees | 1–3% of payroll | Ongoing |
| Attrition & re-hiring | ~20% turnover year 1 | Year 1 |
Even with all of these, offshore hiring typically saves 60–80% versus an equivalent onshore team. But the range is wide — a bad hire or a rocky first year can erode most of the savings.