If you're an Australian CTO or founder weighing up offshore developers, the first question is always the same: what will it actually cost? Most answers online give you a single hourly rate and stop there. That number is almost useless on its own, because what you pay depends on the role, the country, the engagement model, and the costs that never appear on an invoice.
Below you'll find what developers actually earn in Australia, Sri Lanka, Vietnam and the Philippines, role by role, what you'll really pay once every cost is counted, and how to cut your engineering spend without cutting quality.
The short answer
Offshore developers in Sri Lanka, Vietnam and the Philippines typically earn roughly a fifth or less of what an equivalent Australian developer earns in base salary. A backend developer in Australia averages about $125,000 a year, while comparable developers in the three offshore markets earn roughly $9,000–$25,000 a year in local salary, depending on country and seniority.
But salary is not what you pay. Through a provider, you pay a fee that also covers employment costs, equipment, management and replacement cover. On the Australian side, an employee costs well above salary once you add 12% superannuation, leave and recruitment. The only fair comparison is total cost per productive month, which is what the rest of this guide helps you calculate.
Want real numbers for your team? Tell Black Vault which roles you need and we'll send an all-inclusive monthly cost per developer, so you can compare it line by line with a local hire.
Developer salaries by country and role
The table below compares typical annual base salaries for five common roles, converted to Australian dollars. These are what developers earn locally, not what a provider charges you; we cover the gap between the two in the next section.
| Role | Australia (average) | Sri Lanka (mid-level range) | Vietnam (median) | Philippines (median) |
|---|---|---|---|---|
| Backend developer | $125,000 | $9,300–$16,500 | $25,200 | $17,600 |
| Frontend developer | $110,000 | $5,100–$18,000* | $23,200 | $17,600 |
| Full-stack developer | $121,000 | $9,300–$16,500 | $24,800 | $17,600 |
| QA / test engineer | $95,000 | $4,100–$12,900* | $20,800 | $15,700 |
| DevOps engineer | $122,000 | $12,900–$23,200 | Not reported | $21,700 |
Annual base salary in AUD, rounded. * Sri Lankan web development and QA figures cover all seniority levels. Exchange rates used: 1 AUD ≈ 233 LKR, 18,020 VND and 44.3 PHP (mid-to-late October 2026).
Figures come from recent salary data for Australia, Sri Lanka, Vietnam and the Philippines. Different markets report averages, medians or bands, so use the table to size the gap, not as an exact price list.
Seniority matters more than country
Within each market, experience moves salary more than geography does. In Vietnam, backend developers with under a year's experience earn a median of about VND 12.4 million a month (around $8,300 a year), rising to VND 54.9 million (around $36,600) for those with more than eight years. In Sri Lanka, a senior software engineer earns roughly $16,500–$23,200 a year, about two and a half times a junior.
So a senior offshore engineer is not "cheap" in local terms; they are well paid and in demand. That matters for retention, which is one of the hidden costs we cover below.
What the table means in practice
For a backend developer, the base salary gap between Australia and the three offshore markets is roughly $100,000 a year or more. The gap is widest for backend roles, where Australian salaries are highest. For QA, it is smaller in dollar terms but still large in proportion. Whatever the role, the same rule applies: the salary gap is the ceiling on your saving, not the saving itself.
Sri Lankan engineering talent, with a shared working afternoon. Black Vault's backend, full-stack, QA and DevOps engineers are based in Sri Lanka, 4.5–5.5 hours behind Sydney. Find out what the role you're hiring for would cost through us.
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The true cost of a local developer
An Australian employee costs far more than their salary. Take the average backend developer at about $125,000 a year and add only the legally required superannuation: from 1 July 2025, the superannuation guarantee is 12% of wages. That alone lifts the cost to about $140,000 a year.
Then add the costs that vary by business:
- Paid leave. Full-time employees get four weeks' paid annual leave under the National Employment Standards, plus personal leave and public holidays. You pay for roughly 52 weeks but get closer to 46 weeks of work.
- Payroll tax and workers' compensation, depending on your state and total payroll.
- Recruitment. Agency fees or weeks of internal time, plus the risk of a mis-hire.
- Equipment and space. Laptop, software licences, desk and tooling.
- Ramp-up. Weeks of reduced output while a new hire learns your codebase.
None of this makes local hiring wrong. Local developers bring real advantages: same time zone, easy collaboration and deep context on your market. The point is that any comparison must start from the full cost, not the salary line in a job ad.
What an offshore provider's fee actually covers
When you hire through an offshore development company, you don't pay the developer's salary directly. You pay a monthly fee per developer (or a project price) that typically bundles:
- The developer's salary at local market rates, as in the table above.
- Local employment costs such as statutory contributions, benefits and leave cover.
- Equipment, office and software tools.
- Recruitment, HR and retention, including finding a replacement if someone leaves.
- Technical oversight, such as a team lead, code review or QA, depending on the model.
- The provider's margin.
This is why a provider's fee is always higher than the salaries in the table, and why two providers in the same country can quote very different prices. A lower fee that excludes replacement cover or technical oversight can easily cost you more over a year.
How you engage also changes the cost structure. With staff augmentation you pay per developer and manage the work yourself; a dedicated team costs more per month but takes more management off your plate; project outsourcing is priced by scope and moves more delivery risk to the provider. We compare the three models in detail in our guide to staff augmentation, dedicated teams and project outsourcing.
Compare like with like. Ask Black Vault for an all-inclusive monthly quote with a written list of exactly what it covers, then put it side by side with your other options.
The hidden costs that shrink the saving
The salary gap is large, but several costs eat into it. These are the ones that catch Australian businesses out most often:
- Management time. Someone on your side still sets priorities, answers questions and reviews work. If that's a senior engineer or your CTO, their time is expensive.
- Ramp-up. Any new developer, local or offshore, takes weeks to become productive on your codebase.
- Communication overhead. Sri Lanka is 4.5–5.5 hours behind Sydney and Vietnam 3–4 hours and the Philippines 2–3 hours behind, so decisions can stall without a planned overlap window.
- Turnover. Experienced engineers are in demand everywhere. Losing one means paying for ramp-up again, unless your provider covers replacement.
- Rework. Unclear requirements cost money in any model, but distance makes them more expensive to fix.
Cost isn't the only thing to judge. Most companies plan to keep or increase their outsourcing, yet 70% have brought some outsourced work back in-house over the past five years. Getting the setup right matters as much as the rate.
Test with a small task before you commit
The most reliable way to learn what an offshore team really costs is to watch it work. Before signing a long contract, give a prospective provider a small, well-defined piece of real work: a feature, an integration, or a bug backlog. Then measure it:
- How much of your time did it take to brief and review?
- Was the code quality what you'd expect from a senior local developer?
- Did they ask good questions, flag risks early, and communicate clearly across the time difference?
- Did they deliver what was agreed, when it was agreed?
A two- to four-week trial tells you more about real cost than any rate card, because it reveals the management overhead and rework that quotes leave out.
This is why Black Vault offers to deliver an initial portion of your project free of charge. You see our engineers' code, communication and delivery on your own work before you commit budget, and decide on evidence rather than promises.
Talk to us about a trial project
How to compare quotes properly
To compare providers, or offshore against local, use the same yardstick: total cost per productive month. A simple worksheet:
| Cost line | Local hire | Offshore provider |
|---|---|---|
| Base salary or monthly fee | Salary ÷ 12 | Quoted monthly fee |
| Statutory on-costs | Super (12%), payroll tax, workers' comp | Usually included; confirm |
| Recruitment and replacement | Agency fee or internal time | Ask whether included |
| Equipment and tools | Your cost | Ask whether included |
| Your management time | Hours × manager's hourly cost | Hours × manager's hourly cost |
| Productive months per year | About 10.5 after leave and holidays | Confirm leave cover |
Then ask every provider the same questions: What exactly does the fee include? How many hours overlap with our working day? Who owns the code and IP? How is access to our systems secured? What happens if a developer leaves? What notice do we need to scale down?
If you're still deciding between hiring locally, using freelancers or building an offshore team, our guide on how to decide who builds your software walks through the trade-offs.
Frequently asked questions
Click a question to see the answer.
How much does it cost to hire an offshore developer for an Australian company?
The cost depends mainly on the developer's role and seniority, the country, the engagement model and what the provider includes in its fee. As a guide to local salaries, backend developers earn a median of about $25,200 a year in Vietnam and $17,600 in the Philippines, and mid-level software engineers in Sri Lanka earn about $9,300–$16,500, compared with an Australian average of about $125,000. A provider's monthly fee will be higher than these salaries because it also covers employment costs, equipment, management, replacement cover and margin. To compare fairly, ask each provider for an all-inclusive monthly cost per developer and a written list of what it covers, then compare that with the full cost of a local hire. Black Vault provides this kind of itemised quote for any role on request.
Is hiring an offshore developer cheaper than hiring in Australia?
Usually, yes, in direct cost, but the real saving depends on how well the team is set up and managed. Base salaries in Sri Lanka, Vietnam and the Philippines are roughly a fifth or less of Australian salaries for the same role, and an Australian employee also costs 12% superannuation plus leave, recruitment and equipment. However, savings shrink if the offshore team needs heavy management, ramps up slowly, or loses people often. The most accurate comparison is total cost per productive month, including your own management time. A short paid or free trial on real work is the best way to test the numbers before committing.
Which country is cheapest for offshore developers: Sri Lanka, Vietnam or the Philippines?
On typical published salary data, Sri Lanka and the Philippines tend to have lower developer salaries than Vietnam for comparable roles, but the differences between the three are small compared with the gap to Australia. Seniority has a bigger effect on cost than country: in Vietnam, a backend developer with more than eight years' experience earns roughly four times a developer with under a year's experience. Choose a location on more than price: time-zone overlap with your team, English communication, the depth of senior talent in your tech stack, and the quality of the specific provider matter more to your total cost than a few thousand dollars of salary difference.
What costs do Australian employers pay on top of a developer's salary?
Australian employers pay several on-costs beyond base salary. From 1 July 2025, the superannuation guarantee is 12% of wages. Full-time employees are entitled to four weeks' paid annual leave a year under the National Employment Standards, plus personal leave and public holidays, so you pay for about 52 weeks but receive roughly 46 weeks of work. Depending on your state and total payroll, payroll tax may apply, along with workers' compensation insurance. You also pay to recruit (agency fees or internal time), to equip the developer with a laptop and software, and for the weeks of reduced output while they ramp up.
What hidden costs should I budget for with an offshore development team?
The main hidden costs are management time, ramp-up, communication overhead, turnover and rework. Someone on your side still needs to set priorities, review work and answer questions. New developers take weeks to learn your codebase. Time differences can slow decisions if overlap hours aren't planned: Sri Lanka is 4.5–5.5 hours behind Sydney, Vietnam 3–4 hours and the Philippines 2–3 hours. If a developer leaves, you pay for ramp-up again unless your provider covers replacement. Choosing a provider that includes replacement cover, documents handovers and agrees fixed overlap hours keeps these costs down.
How do I compare quotes from different offshore development companies?
Make every quote comparable by asking each provider the same questions. Request an all-inclusive monthly cost per developer by seniority and a written list of what's included: equipment, leave cover, replacement, technical oversight and tools. Ask how many hours overlap with your working day, who owns the code and IP, how access to your systems is secured, whether any work is subcontracted, and what notice applies if you scale down. Ask for references from clients with similar projects. Finally, test the shortlisted provider on a small, real piece of work before committing: it reveals the management time and quality that a quote cannot.
Ready to see the numbers on your own project? Black Vault will deliver an initial portion of your project free, so you can judge our engineers' code and communication before you commit.