Last updated Nov 11, 2026

How the savings add up

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Amplify Tech Labs is a Chicago-based US company that hires developers in the US and Latin America, and we're always recruiting. We know what comes with a US hire beyond salary, and we talk pay with engineers in both markets all the time, so we know what people really expect to earn. Pick a level and role to compare the full cost of each.

Senior developer, one year

US employee$209,000Contractor−$127,000
You save$82,000a year

Low to high: $61,000 to $102,000 (30% to 48% less)

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Smallest: $202,571 − $141,000 = $61,571, 30% less

Biggest: $215,271 − $112,800 = $102,471, 48% less

US employee, per year

$209,000

Salary plus what you pay on top of it.

  1. Salary$171,980
  2. +Employer taxes$13,676
  3. +401(k) match$6,879
  4. +Workers' comp$840
  5. +Life and disability$1,064
  6. +Health insurancesingle to family plan$8,132 to $20,832
  7. =Total$202,571 to $215,271

We use the halfway point: low plus high, divided by 2.

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Halfway point

($202,571 + $215,271) ÷ 2
= $208,921 → $209,000

Latin American contractor, per year

$127,000

Hours worked times the market rate.

  1. 52 weeks × 40 h2,080 h
  2. −Holidays10 days × 8 h80 h
  3. −Vacation15 days × 8 h120 h
  4. =Hours a contractor works in a year. Change it to update every number.

Contractors aren't paid when they're off.

Market rate (Accelerance survey)

  1. ×At $60 an hour1,880 h × $60 = $112,800
  2. ×At $75 an hour1,880 h × $75 = $141,000

Same halfway point here.

Show the mathHide the math

($112,800 + $141,000) ÷ 2
= $126,900 → $127,000

Per hour worked

A US employee costs you $108 to $115 an hour, all in.

A Latin American contractor runs $60 to $75 an hour at market rate.

All-in yearly cost ÷ 1,880 hours worked:

$202,571 ÷ 1,880 = $108
$215,271 ÷ 1,880 = $115

Halfway points are rounded to the nearest $500 and hourly costs to the nearest dollar. Savings low and high are rounded down to the nearest $1,000.

Sources: US Bureau of Labor Statistics, IRS, KFF, Vanguard, Illinois unemployment tax, 2025 to 2026. Holidays and vacation are Latin American averages.

Questions

Is it cheaper to hire a developer as a contractor or an employee?
Usually a contractor costs less. With our defaults, a senior Latin American contractor costs 30% to 48% less than a senior US employee, compared at the same 1,880 hours worked a year, because you pay no employer taxes or benefits. Recruiting, equipment and management time are not included.
How much does a US developer cost beyond salary?
For a senior developer, about 18% to 25% on top of salary. Employer taxes add about 8%. Health insurance, a 401(k) match and other insurance add the rest. Paid time off is part of the salary, but it means fewer hours worked.
How much does it cost to contract a developer in Latin America?
Software firms charge about $60 to $75 an hour for a senior developer (Accelerance outsourcing rates). At 1,880 hours worked, that is $112,800 to $141,000 a year. Our own Latin America rates are about $35 an hour for junior, $45 for mid, and $60 for senior.
Should I use a contractor or hire through a local employer service?
A local employer service (often called an employer of record) hires the developer as an employee in their country for you. You pay local taxes and benefits plus a fee. A contractor bills you directly and costs less, but is not your employee. Choose based on how long you need them and how much control you want.
Is it better to be a contractor or full-time employee?
It depends on the work. A contractor can cost less and gives you flexibility for a set project or role. A full-time employee is a longer-term commitment, and their cost includes employer taxes and benefits. The law decides who counts as a contractor, not the job title.

For questions about who counts as a contractor, or about taxes, ask a lawyer or accountant.

Talk to us about hiring

Tell us the roles you need. We reply with rates and candidates.

Contact usSee staff augmentation

How we calculate this

US cost is salary, plus employer payroll taxes, plus typical benefits: health insurance, a 401(k) match, workers' comp, and life and disability insurance. Paid time off is part of the salary, so it only lowers hours worked. Contractor cost is hours worked times the market rate. A full year is 2,080 hours, minus 80 hours of holidays and 120 hours of vacation, so the default is 1,880 hours. The low end uses a single health plan and the top market rate. The high end uses a family plan and the bottom rate. "You save" is the halfway point US cost minus the halfway point contractor cost, each rounded to $500. Low and high round down to $1,000. Our hourly rates are on the staff augmentation page.

We update these figures by hand every quarter.