What does an offshore hire cost beyond the salary?

Two quotes land on your desk. One lists a monthly salary. The other lists a single all-in fee that bundles several services together. At a glance, it's hard to tell whether you're comparing two prices for the same thing, or two very different packages that happen to be written as a number.

Salary is only one part of what you'll pay for an offshore team member. The total depends on the employment arrangement behind the role, which services are included in that arrangement, and which responsibilities your business keeps for itself. Two quotes are often simply structured differently, and it's worth knowing how to read either one.

Once you've worked out which part of a role could be supported offshore, as covered in "What should stay onshore, and what could be supported offshore?", this is the next practical question: what will it actually cost to support that person properly.

The cost categories worth checking

Not every arrangement includes every item below, and not every item will apply to every role. It's still worth checking each one against any quote you're reviewing.

Salary. The base pay for the role, usually the figure quoted first and most visible.

Employer contributions, benefits and other employment costs. Depending on the employment arrangement and the overseas jurisdiction, there may be statutory contributions, leave entitlements or other employment costs sitting alongside salary. The specific rules vary by country and can change, so these should be confirmed against current local requirements rather than assumed.

Recruitment or setup fees. Some arrangements charge separately for sourcing and placing the right person. Others fold this into an ongoing fee.

Employment administration and ongoing support or service fees. This covers the practical work of managing the employment relationship and any ongoing support service, which may be charged as a percentage, a flat fee, or bundled into a single rate.

Equipment, software and workspace. A laptop, software licences, and in some cases a desk in a shared facility, can be included in a quote or billed separately.

Onboarding, training and internal management time. Some suppliers include a structured onboarding or training period as part of their service. Separately, the time your own team spends preparing materials, briefing the new hire and managing them day to day is a real, ongoing cost, even when no supplier bills for it directly.

Currency conversion, payment charges and taxes. Paying in a different currency can involve conversion costs or fees depending on how payments are structured, and there may be tax implications on either side worth checking with a qualified adviser.

Contract terms that affect the budget. Minimum engagement periods, replacement provisions if a placement doesn't work out, and termination charges can all affect the real cost of an arrangement, even though they don't show up in the headline figure at all.

One-off, recurring, included or separate

Every cost line can be checked against two separate questions: is it a one-off charge or a recurring one, and is it included in the quoted fee or charged separately? A recruitment fee is typically one-off. Salary and ongoing support fees are typically recurring. Equipment might be a one-off purchase or a recurring lease, depending on the arrangement. Asking both questions for every line is what stops something being assumed as included when it isn't, or counted twice because it appears in two places.

A hypothetical comparison

The following is a simplified, hypothetical illustration, not a real quote or pricing structure.

Imagine one quote presented as a monthly rate for the person's time, with recruitment, equipment and ongoing support billed as separate line items. Another quote is presented as a single bundled monthly fee, with its specific inclusions not yet spelled out. Compared side by side as headline figures, it's not possible to say which one actually costs more until the bundled figure's scope has been confirmed against the same categories as the itemised quote. A fair comparison depends on checking what each total covers, not on assuming either supplier has left something out.

A quick way to check a quote

Five questions worth asking any prospective partner

1. What exactly does the quoted total include, line by line?
2. What stays the business's responsibility, and what's the expected cost of that?
3. Which charges can change over time, and on what basis?
4. Who legally employs the person, and who handles the employment obligations that come with that?
5. What happens if the role changes, the placement doesn't work out, or a replacement is needed?

Where this leaves you

A useful comparison shows the total cost, what it covers and what your business remains responsible for. That's a more reliable basis for a decision than a single headline figure either way.

Working out the real cost of a role is easier once you've already clarified what the role involves and what should be supported offshore. If you haven't worked through that yet, "Before you hire offshore: what to get ready first" is a useful starting point.

Want to work through what a role would actually cost to support properly? Talk it through with Alisto.