Nearshore Software Development Rates: A Comprehensive Guide

Nearshoring is one of tech leaders’ most powerful cost-saving tools. It lets you source skilled talent at competitive rates while working with teams from a manageable time zone. Unlike offshoring, where misaligned working hours can hinder collaboration, nearshoring ensures flawless real-time synchronization.

Regarding nearshore software development rates, this approach offers a sweet spot between cost savings and access to skilled IT talent. Nearshore development costs typically start at $20 per hour, offering a lucrative alternative to onshore hiring in the US and EU, where rates often begin at $80 per hour for talent with comparable expertise.

This post will guide you in your search for nearshore development cost savings, as we compared pricing across key regions, and broke down the factors and hidden costs that shape the total price. We’ve analyzed data from reputable sources such as Accelerance, Clutch, PayScale, Glassdoor, Indeed, CodersLink, LinkedIn, and Plane.com to provide a well-rounded perspective.

We’ve also drawn on our 17+ years of experience building nearshore teams to help you understand how to optimize your budget by tapping into the IT talent hubs of LATAM and CEE.

Factors that affect nearshore software development rates

Nearshore software development rates won’t necessarily be the same in each case. The cost formation depends on several factors, including developer experience, location, skill sets, complexity of your tech stack, and engagement model. That’s why it’s essential to look beyond hourly rates and understand what drives the overall cost.

Here are 5 key factors that shape the cost of nearshore teams:

1. Local labor costs: Nearshoring countries offer more competitive software development rates than onshore markets, but pricing still depends on the economic conditions in the region of your choosing.

2. Market demand: In-demand skills like AI/ML, Data, Embedded/IoT, Blockchain, and Cloud don’t come cheap, as limited talent supply tends to drive up rates.

3. Developer seniority: Hiring junior-level developers for non-critical tasks can save you costs, but if your project requires seasoned engineers, software architects, and tech leads, the price of nearshoring will be higher.

4. Technology stack: Standard tech stacks like JavaScript or PHP are more affordable, while specialized expertise in emerging or complex technologies like Cloud development or Blockchain raises the price.

5. Engagement model: Whether you hire through a staff augmentation model, Dedicated Team, or other type of contract, each model impacts pricing differently.

Nearshore vs. onshore software development rates

When comparing onshore and nearshore software development pricing, the difference is significant. Nearshoring offers businesses a cost-effective alternative to staffing locally, with potential savings of up to 50% of development costs.

Using $80 as the average US rate, consider the table below, showing your potential nearshore development cost savings.

Besides significant cost savings, nearshoring comes with several benefits that make it a compelling alternative to onshore staffing:

• Access to high-quality IT talent: Nearshore hubs harbor highly skilled developers with diverse backgrounds and experience.
• Better time zone overlap: Unlike offshoring, working hours align perfectly with the US and EU, prompting real-time collaboration.
• Stronger cultural alignment: Shared work ethics, business values, and communication styles contribute to a high level of synergy between the teams.
• On-demand scalability: Teams can be expanded or downsized as needed, without the long-term commitments of in-house hiring.
• Faster team formation: Nearshore vendors like nCube have a regional presence in Latin America and Europe and a network of candidates, which reduces time-to-fill a role down to a few weeks.
• No overhead costs: In addition to building a skilled team, you also avoid expenses tied to office space, IT infrastructure, and talent retention, as they are typically covered by a provider.

Nearshore Software Development Rate Ranges by Country and Experience Level

Latin America

In terms of popularity, LATAM is a formidable competitor of traditional offshoring hotspots like India and the Philippines. What sets it apart as the ultimate destination for many North American businesses? Let’s look at the region’s competitive advantages:

• An expansively growing pool of skilled technologists;
• A full workday overlap with North American companies;
• Significant cost savings compared to other regions;
• Geographical advantage for more convenient travel;
• Cultural compatibility with Western approaches;
• Access to bilingual tech specialists.

The average pricing for nearshore development in LATAM, according to the 2024 Accelerance Global Software Outsourcing Rates and Trends Guide, falls between $34 to $92 per hour.

Here’s is a breakdown of nearshore software development rates in Latin America based on developer seniority:

Country	Junior developer ($ per hour)	Middle developer ($ per hour)	Senior developer ($ per hour)
Mexico	25-40	40-60	60-85
Brazil	20-35	35-55	55-80
Argentina	18-30	30-50	50-75
Colombia	20-32	32-50	50-70

Below is a breakdown of hourly rates for key developer roles, so you can estimate your hiring budget more precisely.

Role	Mexico ($ per hour)	Brazil ($ per hour)	Argentina ($ per hour)	Colombia ($ per hour)
AI/ML	15-40	20-50	20-40	20-35
Java	25-50	30-40	35-45	20-30
JavaScript	20-45	25-45	30-40	15-35
Python	25-40	30-50	30-45	20-45
PHP	25-35	25-40	25-35	20-35
C#	35-55	20-40	25-40	20-45
.NET	40-55	30-50	25-50	25-40
Android	35-50	25-40	25-35	25-40
iOS	35-50	30-45	30-40	25-45
Quality Assurance (Automation)	10-30	15-30	15-25	10-25

Mexico offers the best cost-skill ratio in LATAM, especially for .NET and AI roles. Colombia is ideal for budget-conscious projects, while Brazil gives you access to the largest overall talent pool.

Central and Eastern Europe (CEE) 

CEE is recognized as a second-to-none nearshore outsourcing destination on a global scale. The region provides flawless nearshoring opportunities for multiple reasons:

• A strong reputation for solid quality-to-price ratio;
• Regulatory, political, and cultural ties with the EU;
• A robust innovation-focused center;
• Alignment with Western business ethics;
• Full workday overlap with the EU;
• High English proficiency.

The average cost for hiring software developers in CEE, according to the 2024 Accelerance Global Software Outsourcing Rates and Trends Guide, is $37–$101, yet it varies from country to country and, as we’ve mentioned before, depends on developer seniority, vendor fees, project complexity, and other factors.

For quicker access, we’ve put together a table with average nearshore development costs in Central and Eastern Europe.

Country	Junior developer ($ per hour)	Middle developer ($ per hour)	Senior developer ($ per hour)
Poland	30-45	45-70	70-95
Ukraine	25-40	40-60	60-90
Czech Republic	35-45	45-75	75-100
Romania	25-38	38-58	58-85
Bulgaria	22-35	35-55	55-80

Now let’s compare the average nearshore software development rates across various countries in this region to help you pick the most cost-effective location:

Role	Poland ($ per hour)	Ukraine ($ per hour)	Czech Republic ($ per hour)	Romania ($ per hour)	Bulgaria ($ per hour)
AI/ML	25-55	20-50	24-50	25-45	20-35
Java	30-40	25-35	25-35	20-25	20-25
JavaScript	20-35	20-30	20-25	15-20	15-25
Python	25-35	30-35	20-35	20-25	15-25
PHP	15-30	20-25	20-35	20-25	15-20
C#	25-40	25-35	20-30	20-45	20-35
.NET	25-35	25-30	25-40	20-30	20-35
Android	25-40	20-35	20-40	20-30	25-20
iOS	25-40	20-35	20-40	20-30	20-35
Quality Assurance (Automation)	20-25	15-20	20-35	15-25	15-20

Regional rate comparisons

When it comes to nearshoring, both LATAM and CEE stand out as top choices, offering businesses access to skilled engineers and significant nearshore development cost savings. However, while CEE is valued for its maturity and high development skills, LATAM offers a unique time zone edge for North American businesses.

Latin America

A prime nearshore destination for US businesses, the region offers affordable, high-quality tech talent, full workday overlap, geographical proximity, and cultural compatibility. LATAM countries like Brazil and Mexico produced over 50,000 ICT graduates in 2023 alone, fueling the region’s rapid rise in senior engineering talent.

Central & Eastern Europe

CEE is a mature powerhouse of innovative technical expertise, backed by a long-standing reputation for the quality of its local workforce. While its nearshore software outsourcing costs are slightly higher than LATAM, businesses get what they pay for: Engineers with world-class STEM education, a deep-rooted tech culture, EU-friendly regulations, and seamless cultural integration with Western companies.

Cost-quality balance

If you’re building enterprise-grade systems in Java, developing AI/ML pipelines, or launching compliant fintech platforms, regions like Poland and Ukraine offer engineers with 5-10 years’ experience in those verticals. In these cases, cost alone isn’t the deciding factor – you need a solution that brings lasting value.

While LATAM stands out for its lower nearshore software development pricing and convenient time zones, CEE gives you the edge in technical excellence, problem-solving, and innovation.

The choice between these regions boils down to your priorities: Cost savings and proximity to LATAM, or cutting-edge solutions and tech excellence with CEE? Answering this question, you should define what will add more value to your project.

Potential savings from nearshore development

In this part, we’ll dive into the specifics of nearshore development cost savings compared to onshore staffing.

Regardless of the location you choose, nearshoring significantly reduces operational costs, especially when working with a reliable vendor like nCube. By building your own nearshore development center, including office space, IT infrastructure, team administration, and retention services, you eliminate the overhead that comes with local hiring. This leads to a higher overall ROI, as you trim expenses that have no direct impact on your top line.

Potential savings achievable by nearshoring in Central & Eastern Europe (CEE)

		Savings compared to in-house in the EU	Time zone	Talent pool
Poland	~$45	up to 35%	GMT+1-GMT+2	400,000+
Ukraine	~$30	up to 60%	GMT+2-GMT+3	300,000+
Romania	~$35	up to 50%	GMT+2-GMT+3	130,000+
Czech Republic	~$50	up to 30%	GMT+1-GMT+2	140,000+

Potential savings achievable by nearshoring in LATAM  

		Savings compared to in-house in the US	Time zone	Talent pool
Mexico	~$30	up to 65%	GMT-5-GMT-7	220,000
Argentina	~$40	up to 50%	GMT-3	115,000+
Brazil	~$35	up to 60%	GMT-2-GMT-5	500,000+
Colombia	~$25	up to 70%	GMT-5	65,000+

Hidden costs and factors affecting rates

Nearshore software development pricing, in many cases, goes beyond the salaries of software engineers. Market situation, developer background and skillsets, project complexity, infrastructure costs, and several other factors play a key role in the ultimate price. Let’s review these factors so you can take them into account when strategizing:

Geographic location and market rates

Where do you plan to set up your external team? Choosing a location, note that factors like economic conditions, IT market trends, and the demand for tech talent define nearshore development costs in both LATAM and CEE.

For instance, countries with a higher cost of living, like Poland, Mexico, and the Czech Republic, tend to have higher hourly rates. Destinations like Colombia and Ukraine offer more competitive pricing due to lower living expenses.

Developer expertise, seniority, and skill sets

Specialization plays a major role in nearshore software development pricing: The rarer the skill set, the higher the cost of nearshore talent. A narrower talent pool often increases rates, so if your project requires senior developers, architects, or experts in AI/ML, Data, Blockchain, Cloud, or DevOps, expect to pay more than you would for professionals working with widely used technologies like JavaScript or PHP.

Project complexity and scope

Another point defining your potential nearshore development cost savings is your project’s complexity and scope. For example, you can lower development costs when developing a simple application with a smaller team of more affordable software developers. Complex software with high performance requirements, on the other hand, demands more experienced staff, which lends itself to higher costs.

As your project evolves, you may face unexpected costs due to continued support, software updates, bug fixing, and integration with other systems. Thus, hidden costs may surface after the launch of the product.

Engagement model (and when to apply them)

The cost of nearshore teams also depends on the chosen engagement type. Staff Augmentation, Dedicated Team, and Project-Based outsourcing offer different cost structures.

• Staff Augmentation: Best for fast-scaling internal teams for a short term (e.g., need 2 React developers for 6 months);
• Dedicated Team: Great for long-term collaboration (e.g., a full-stack team working on an MVP or SaaS product);
• Project-Based: Ideal for fixed-scope, short-term builds (e.g., 3-month proof of concept with defined deliverables).

The size and maturity of the vendor company also impact costs. Large providers tend to charge above market value. They typically focus on large-scale clients, which makes them less flexible for smaller or highly customized requests.

In contrast, smaller but reputable vendors like nCube offer lower software development costs while providing greater adaptability to client needs as well as a personalized approach and focused attention.

Level of flexibility and talent availability

If you need to scale your team quickly, expect higher nearshore software development rates, as vendors must invest extra effort to secure talent within a tight timeframe and prevent candidates from considering competing offers. This urgency requires them to invest in continuous recruitment and maintain a pool of pre-screened talent, which drives up costs.

Talent availability also varies by region. In some nearshore markets, like Colombia and Argentina, the pool of experts in niche technologies, such as AI, blockchain, or DevOps, is more limited, leading to longer hiring cycles and higher rates. In contrast, talent-rich destinations like Ukraine, Poland and Romania offer broader access to niche skill sets, helping you shorten time-to-hire and optimize costs.

Hidden operational and management costs

Beyond developer salaries, nearshore software outsourcing costs include additional operational expenses that can impact your total budget:

• Office space;
• Team administration;
• IT infrastructure;
• Legal compliance costs;
• Travel expenses;
• Talent retention services.

These elements can significantly affect your total budget and should be clearly discussed with a vendor upfront. When partnering with nCube, you can significantly reduce development costs, as we handle these operational components on your behalf, letting you solely focus on software development.

Project management and communication overhead

Even with a small time zone difference, nearshoring still requires hands-on involvement in your project to keep your home-based and nearshore software development team aligned. Hidden costs can arise from delays, miscommunication, or inefficiencies, especially if you lack experience in running teams remotely. We at nCube always help our clients establish clear communications and choose the right tools to ensure their nearshore teams stay fully aligned with in-house operations.

Legal & compliance fees

Higher nearshore development costs can also be chalked up to complex labor laws, tax regulations, and data security requirements. Ensuring your contracts, NDAs, and compliance policies are correctly structured often requires support from the legal team, which can add costs to your overall nearshoring budget. At nCube, we always help our clients set up a team with full compliance with local regulations, from labor laws to taxes.

Infrastructure costs

Your project may require software licenses, development tools, and cloud-based environments. These additional costs tend to snowball over time, so be sure to clarify them before partnering with a provider.

Employee turnover risks

High attrition rates can lead to unexpected costs tied to hiring, onboarding, and knowledge transfer. Over time, employee turnover can add significantly to your long-term development expenses.

At nCube, our developers work with clients for an average of over two years, which aligns with a typical SDLC. In fact, last year, we achieved a 98% unforced retention rate, thanks to our comprehensive talent retention services.

nCube is your trusted partner for nearshore and offshore development

We acknowledge that the nearshore software development pricing mentioned in the article is a rough estimate based on current market trends. The final pricing is determined individually for each project, depending on the client’s specific preferences when it comes to seniority, skillset, location, etc. That said, feel free to reach out, and we’ll be happy to provide a detailed price breakdown of nearshore IT staff augmentation.

nCube provides nearshore outsourcing solutions through our delivery offices in Eastern Europe (Poland, Ukraine) and Latin America (Brazil). With experience helping 122 EU and North American businesses build skilled nearshore development teams in top tech hubs, we handle everything from assembling a skilled team to providing office space, IT infrastructure, and ensuring employee comfort. We provide nearshore developers based on the following models:

Staff Augmentation: Seamless integration of nearshore development specialists into your organization — aligned with your processes, culture, and management. 

Dedicated Team: A full-cycle nearshore software development team to accelerate the development process or handle separate projects under your management. 

R&D: A nearshore software outsourcing team housed under one roof, with full operational management handled by us. You focus solely on your product. 

Our main benefits as a provider of software development services in CEE and LATAM are:

We hire from the top 1% of talent: We ensure you work with the best engineers by testing their tech skills, soft skills, and English proficiency. We only select reliable and highly skilled professionals, eliminating any risk of hiring inconsistent individuals.

Talent retention focus: We don’t just build teams – we take care of them. Due to the comfortable office/remote environment, competitive compensation, and employee bonus packages, we’ve achieved a 98% retention rate.

100% team integration: We’ll embed our engineers seamlessly into your workflows, culture, and management structure to ensure deeper commitment to your goals. This level of integration allows our teams to operate as an extension of your own.

Travel options: We are focused on strengthening relationships between the client and their team. Thus, we encourage our engineers to visit clients for kick-offs and Boot Camps, fostering better bonding and alignment. Our dedicated manager handles all logistics, so everything runs without a hitch.

Get in touch with nCube, and we’ll help you launch a skilled, fully integrated team tailored to your needs, backed by transparent pricing, high retention, and seamless collaboration. Let’s talk about your goals!