Free tool · Rules as of October 20, 2026
A senior software engineer on a $170k US salary costs about $202,687 a year once payroll taxes and benefits are added. The same role in Latin America costs $84,342 to $118,281 as a full employee through an Employer of Record, and $72,588 to $84,108 as a contractor. That is 42% to 58% less than the US hire on the employee model.
W-2 employee, United States
$202,687
$16,891 / month
BaselineThrough an Employer of Record
$107,007
$8,917 / month
47% less than USIndependent contractor, invoices monthly
$79,788
$6,649 / month · ~$41/hr
61% less than USDefault assumptions: EOR fee $599 per month, contractor premium 20%, severance reserve included, US benefits $12,000 plus a 4% 401(k) match. US total for comparison: mid $163,540, senior $202,687, staff $245,846.
| Country | Seniority | Gross / month | Employee via EOR / year | Contractor / year | EOR vs US |
|---|---|---|---|---|---|
| Argentina | Mid | $4,000 | $80,176 | $58,188 (~$30/hr) | −51% |
| Argentina | Senior | $5,500 | $107,007 | $79,788 (~$41/hr) | −47% |
| Argentina | Staff / Lead | $7,000 | $133,837 | $101,388 (~$53/hr) | −46% |
| Brazil | Mid | $4,200 | $88,628 | $61,068 (~$32/hr) | −46% |
| Brazil | Senior | $5,800 | $118,281 | $84,108 (~$44/hr) | −42% |
| Brazil | Staff / Lead | $7,500 | $149,788 | $108,588 (~$56/hr) | −39% |
| Mexico | Mid | $4,000 | $76,667 | $58,188 (~$30/hr) | −53% |
| Mexico | Senior | $5,500 | $97,744 | $79,788 (~$41/hr) | −52% |
| Mexico | Staff / Lead | $7,000 | $118,185 | $101,388 (~$53/hr) | −52% |
| Colombia | Mid | $3,500 | $72,719 | $50,988 (~$26/hr) | −56% |
| Colombia | Senior | $5,000 | $100,289 | $72,588 (~$38/hr) | −51% |
| Colombia | Staff / Lead | $6,500 | $127,859 | $94,188 (~$49/hr) | −48% |
| Chile | Mid | $4,000 | $66,342 | $58,188 (~$30/hr) | −59% |
| Chile | Senior | $5,500 | $84,342 | $79,788 (~$41/hr) | −58% |
| Chile | Staff / Lead | $7,000 | $102,342 | $101,388 (~$53/hr) | −58% |
About $84,342 to $118,281 a year as a full employee through an Employer of Record, depending on the country, versus about $202,687 for a comparable US hire. As a contractor the range is $72,588 to $84,108, roughly $38 to $44 an hour.
Yes, on paper. A senior employee through an EOR costs $27,219 more per year than a contractor in Argentina and $34,173 more in Brazil in this model, because it adds statutory bonuses, employer contributions, severance exposure and the EOR fee. The contractor model carries misclassification risk when the person works full time like an employee, and labor courts in Argentina, Brazil, Mexico and Colombia can reclassify the relationship.
A $170,000 base salary becomes about $202,687 a year, 19% more, after Social Security (6.2% up to $184,500), Medicare (1.45%), unemployment taxes, workers' comp, health benefits and a 401(k) match.
With an entity that costs about $30,000 a year to run and an EOR fee of $599 per employee per month, the entity breaks even at around 5 employees. Below that, an EOR is usually cheaper and faster to start.
Ley 27.802 created the RIFL, which cuts employer contributions to 5% for 48 months for eligible new hires registered between May 1, 2026 and April 30, 2027, and the Labor Assistance Fund (FAL), an employer contribution of 1% of payroll for large companies and 2.5% for SMEs.
In this model Chile has the lowest statutory on-cost for a senior engineer, about 9% on top of gross salary, mainly because contributions are capped. Brazil has the highest, about 51%. Salary levels and talent depth matter more than on-costs when choosing a market.
The model applies each country's statutory employer rules to a gross monthly salary in USD. Caps in local currency are converted at approximate October 2026 exchange rates. Customary benefits (private health plans, meal cards) are typical market values, not legal requirements. Profit sharing in Mexico (PTU) is excluded because it depends on the employer's taxable profit. These are budgeting estimates, not legal, tax or payroll advice.
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Estimates for planning only. Labor costs depend on the employer's activity, collective agreements and each employee's situation.