More and more companies are hiring remote software developers from around the world. Popular destinations include Vietnam, the Philippines, and increasingly, Pakistan.
As our world becomes more connected, working with software developers in countries like Pakistan is becoming increasingly attractive. That’s true regardless of where your company happens to be based: from the USA to the UK, companies are actively recruiting Pakistani software developers to be important members of their team.
Pakistan is the fifth most populous country in the world and software development is one of the nation’s fastest-growing industries. The Pakistani government is aiming to double its IT industry in the next two years, and hundreds of millions of dollars are being invested in building technology zones across the country.
One of the factors driving this growth is that the cost of living in Pakistan is much lower than in many Western nations. In fact, salaries for software developers in Pakistan are lower than in other popular remote software developer hiring hubs including India and countries across Southeast Asia. Hiring software developers in Pakistan gives companies access to experienced professionals with the skills and expertise to ship high-quality products – the kind of talent they wouldn’t otherwise be able to afford.
Related: Top 10 Reasons Why to Invest in Pakistan
If your company is considering hiring software developers in Pakistan, there are a few different categories of cost to be aware of. Let’s explore what these are, and how much you should budget for them.
What is the cost of hiring remote software developers?
Remote software developers’ cost, like pretty much any employee, consist of the following:
- Recruitment
- Salary & Benefits
- Equipment
- Taxes
Only by understanding each of these different cost buckets can you build an accurate understanding of the total cost of hiring a software developer in Pakistan. Ready to learn more about what these costs look like? Let’s explore each category in more detail.
Finding Software Developers in Pakistan
If you haven’t hired software developers in Pakistan before, it’s tough to know where to start. It’s easy to hire freelance developers through marketplace platforms, but if you want individuals that are committed to your business for the long term, you really need to hire full-time employees.
There’s also the question of quality. You don’t want to advertise a job post just to receive thousands of applicants. Your time is valuable, and you only want to spend time interviewing the most qualified candidates – but finding them can feel like finding a needle in a haystack.
The best way to recruit software developers in Pakistan is to work with an Employer of Record (EOR) that has access to a vetted pool of talented developers. At Emerhub, we’re proud to provide this service and have successfully recruited high-quality software developers in Pakistan for companies all over the world. Here’s how it works:
- Provide a job description and a list of requirements. Include details about your product, the tech stack developers need to know, and the responsibilities of the job. You can also include a technical test.
- Within 10 days, we’ll share details of 5 – 10 qualified candidates. You can choose which candidates to interview, and ultimately, who to hire. As with any new hire, make sure they’re a good cultural fit with your team, have the required technical skills, and clearly understand the job requirements.
- Once you have agreed to hire a candidate, onboard them to your team.
At Emerhub, we charge 18% of the employee’s annual salary for this service, payable over two installments: half when you make the hire, and a half after the employee has been in the role for three months.
Salary & Benefit Costs for Software Developers in Pakistan
As we already noted, salaries for software developers in Pakistan tend to be significantly lower than those of their European, North American, and even Southeast Asian counterparts. But how much lower?
Salary levels in Pakistan are primarily determined by a software developer’s level of experience. Here are some typical salary ranges at different levels of seniority:
- Junior: $720 USD – $1,000 USD per month
- Mid-Level: $1,175 USD – $1,440 USD per month
- Senior: $1,700 USD – $2,600 USD per month
Compare those figures to the USA, where the median software developer makes over $9,000 USD per month, and it’s easy to see why international companies are outsourcing software developer jobs to Pakistan and other nations across Asia.
As mentioned earlier, directly hiring remote employees in Pakistan and managing their payroll and taxes is quite complex. Therefore, many companies decide to work with an employer of record (EOR).
Your developers are officially hired through the EOR. The EOR manages monthly payroll, withholds taxes, and submits all required reports to government agencies. You will just receive a monthly invoice that includes your payroll breakdown with additional taxes and fees. Not only this, your EOR will also take care of any equipment or gifts that need to be purchased and delivered to your employees.
The typical service charges for an EOR are around 10% of the monthly payroll – an investment that’s well worth it to ensure your software development team is set up for success.
With full-time employees, you will be expected to provide certain allowances and benefits in addition to their monthly pay. These include:
- Overtime: the standard workweek in Pakistan is 48 hours. When employees work overtime above this, you must pay twice their normal rate (three times on national holidays). Employees are only allowed to work a maximum of 56 hours per week.
- Paid Vacation Days: There are 11 paid public holidays in Pakistan. Furthermore, after completing a year of continuous service, employees are entitled to two weeks of consecutive leave.
- Paid Sick Days: employees are guaranteed 16 days of sick leave paid at 50% of their regular pay. A medical certificate is required.
- Maternity/Paternity Leave: Female employees are entitled to 12 weeks of fully paid maternity leave which can be taken six weeks prior to their due date. The employee must be in service for at least four months before childbirth to avail of this benefit. Annual Bonus: some employers provide annual bonuses to attract higher-quality applicants.
- Medical Insurance: companies seeking highly-skilled employees may also offer private medical insurance.
Equipment Costs for Software Developers in Pakistan
Many employers will provide their developers with the equipment they need to perform their job. This could include a company laptop, headset, keyboard mouse, and additional screens. These can all be purchased from our chosen local vendors and delivered to your employee’s home in Pakistan.
Alternatively, you may allow your employees to use their personal computers. In this instance, it’s common to provide a small monthly laptop allowance of roughly $30 USD in addition to the employee’s salary.
If you’re hiring a team of software developers, you may wish to arrange an office space for them in Pakistan so that they can work together. An EOR will help you navigate this process, and some, including Emerhub, can even provide co-working spaces in major cities throughout Pakistan for as low as $85 USD per person per month.
Taxes Associated with Hiring Software Developers in Pakistan
There are a variety of different taxes associated with hiring software developers located in Pakistan. One of the primary taxes employers pay is a contribution to the employee’s pension, known in Pakistan as the Employees Old Age Benefit. Currently, employers must contribute 5% of the employee’s salary to this program, with the employee contributing 1%.
Employers are also required to make contributions to Pakistan’s Social Security program. This benefit is funded solely by the employer and amounts to 7% of the net salary of the employee. However, if the employee makes over 10,000 PKR per month ($55 USD), the employer is not required to make contributions.
Related: Foreign Investor’s Guide to Taxes in Pakistan
Hire Software Developers in Pakistan With Emerhub
If you’re interested in hiring software developers in Pakistan, the team at Emerhub is here to help. We’ve got over a decade of experience helping international companies hire talented software developers in countries all over Asia, and have a pool of highly-qualified Pakistani software developers ready to start making a difference in your company.
Interested in learning more about hiring software developers in Pakistan with Emerhub? Contact us today and one of our consultants will reach out to you to explore how we can help.
