Why do rates tremendously vary across the globe?

If you’ve checked the calculator results for different countries, you’ve surely noticed it. Reasons? See below!

Market peculiarities

Not all countries major in the IT business. Where there’s no competition, there’s also no stimulus to pay more. If the IT freelance isn’t so typical, sources of high rates are practically absent. In-house devs with lower rates form the freelancers’ clients’ average expectations in the long-term perspective. Knowing the local market benchmarks, such clients won’t be eager to pay more.

Different tax systems

All freelance developers shouldn’t forget to include obligatory income taxes in their rates. For some countries, they may not exceed 10%, for other ones can reach 30-50%. It’s only logical that the average IT rates in a particular country are heavily influenced by its fiscal policy.

Different hiring models

Where do people hire IT specialists in a particular country — and how do they do it? IT rates will reflect the domestic economy condition if the in-house segment prevails. If, on the other hand, most coders work remotely, there can be a significant discrepancy between the median IT salary and the median salary in the country in general.

Country reputation on the world market

The average rate is the outcome of the long-term fiscal policy. Entrepreneurs seeking programmers know its basics. They know where affordable developers live — because they’ve been helping the market to make them affordable by complying with global rate trends. A bit sad but true.

The general level of life and cost of living

For countries with a high cost of living (Western Europe, the USA, or Canada), the salaries of IT professionals (one of the financially privileged categories) will also be exorbitant.

TL; DR

Quite a lot of offshore specialists suppose that the freelance market erases cross-country borders. However, it isn’t quite so. You can work from anywhere in the world — but for the global IT business, you will still remain the ambassador of your local market — with its own competition, cost of living, and taxes. That’s a downside of the «think locally, act globally» effect.

Global clients stick to «local» thinking. They know the peculiarities of local specialists and are pretty well aware of the average proficiency/education level. Besides, the in-house and local freelance price benchmarks in a particular country are no mystery — and, unfortunately, they often downgrade your rates in the freelance world.

However, as you already know from the widget, at Lemon.io we always evaluate skills, not passports. For us, it doesn’t matter where the dev comes from. What matters is their skills and our ability to find clients ready to pay their rates.