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What Does It Cost to Build an Offshore Tech Team in Bengaluru?
Updated: Jul 24
A 10 person offshore engineering team in Bengaluru, made up of an engineering manager, a few senior engineers, several mid level developers, and a couple of QA engineers, typically runs between ₹1.4 crore and ₹1.9 crore a year in fully loaded cost. That includes salary, statutory employer contributions, and either an EOR fee or a recruitment fee. In dollar terms, that works out to roughly 17,000 to 23,000 dollars per person per year, all in.
If you're trying to work out the real cost to build an offshore tech team in Bengaluru, the number you need isn't the salary line on a job portal. It's salary plus EPF, gratuity accrual, and whichever hiring route you use to get people onboarded and paid legally. This article breaks every piece of that down in real rupees, so you can build your own budget before your first call with a recruiter.
How Much Does It Cost to Build an Offshore Tech Team in Bengaluru?
For most founders and HR teams, this question has three answers depending on team size. A single senior hire lands around ₹25 to ₹30 lakh a year fully loaded. A 5 to 6 person starter team, one lead plus a mix of mid and senior engineers, usually costs ₹80 lakh to ₹1.1 crore a year. A 10 to 12 person team, the size most GCCs start with today, lands in the ₹1.4 crore to ₹2 crore range once you add EOR or agency fees on top of salary and statutory costs.
What changes this answer more than anything else is whether you're hiring on contract or full time, which we'll walk through below, because it changes both your monthly cost and your legal exposure.
Why Bengaluru Still Leads India's Offshore Hiring Market
Bengaluru continues to hold the deepest bench of cloud native and product engineering talent in India, spread across Whitefield, Outer Ring Road, and Electronic City. Salary growth here has been sharpest for engineers with 4 to 7 years of experience in AWS, Kubernetes, and modern backend stacks, since companies compete hardest for people who can ship independently without heavy hand holding.
The shape of who's building here has also shifted. It's no longer only large global enterprises setting up 200 person captive centres. A growing share of our mandates now come from mid size companies, fintech and healthtech scaleups, and B2B SaaS firms building their first offshore team of 8 to 15 people. AI adoption inside engineering teams has changed hiring criteria too. Clients increasingly ask for engineers comfortable working alongside AI coding assistants and automated testing pipelines, not just engineers who can code from a blank file.
Attrition is the other piece nobody prices in early. Voluntary attrition for mid level engineers in well run Bengaluru offshore teams usually sits at 10 to 15 percent a year, tighter when people are given real ownership and a career path, looser when a team is treated purely as a delivery queue. A churn heavy team quietly pushes up the real cost to build an offshore tech team in Bengaluru far more than any single salary line does.
Contract or Full Time: Which Hiring Model Actually Fits Your Team?
This is the decision that changes your cost structure the most. Full time hiring, through your own entity or through an employer of record, means you carry EPF, gratuity accrual, and paid leave obligations, but you get continuity, IP ownership clarity, and lower attrition since engineers see it as a real job, not a project.
Contract hiring works differently. You pay a higher hourly or monthly rate, you skip EPF and gratuity, and you get flexibility to scale a team up or down quickly. It suits short, well scoped projects or specialist skills you only need for a few months. It doesn't suit core product engineering roles you expect to keep for years, because the classification risk grows if a "contractor" is working fixed hours under your direct supervision, which starts to look like disguised employment under Indian law.
Most teams we build end up as a mix, a full time core team for product ownership and long term delivery, supplemented by contract hires for short bursts of specialist work like a migration project or a compliance audit sprint. Getting this mix right is usually the single biggest lever in lowering the cost to build an offshore tech team in Bengaluru without cutting corners on compliance.
What Indian Employment Law Means for Your Hiring Cost
Every offshore engineer working out of Bengaluru falls under the Karnataka Shops and Commercial Establishments Act, 1961, which governs working hours, weekly offs, and leave entitlements for office based employment in the city. This applies whether the person is on your own entity's payroll or on an EOR's payroll.
Two other laws determine your real non salary cost. The Employees' Provident Fund and Miscellaneous Provisions Act, 1952 requires a 12 percent employer contribution on basic salary, matched by the employee. The Payment of Gratuity Act, 1972 accrues at roughly 4.81 percent of basic salary a year, payable once someone completes 5 years of continuous service. Founders often skip budgeting gratuity in year one since it's not a monthly cash outflow, then get caught off guard once their first hires cross the 5 year mark.
This is exactly why the full time versus contract question matters so much for compliance, not just cost. A properly structured full time hire under an EOR carries clear statutory obligations that are budgeted for. A contract engagement that behaves like full time employment in practice carries real reclassification risk if it's used purely to dodge these costs.
Getting this wrong is one of the fastest ways to inflate the real cost to build an offshore tech team in Bengaluru through penalties and back payments, which is why AnjuSmriti Global structures every engagement around whichever model actually matches how the role will be worked, not just which one looks cheaper on paper.
Bengaluru Offshore Team Cost Breakdown Table
Role | Experience | Annual CTC (INR) | Annual CTC (approx. USD) | Statutory Employer Cost | EOR Fee |
Mid level Engineer | 3 to 5 years | ₹12 to 16 LPA | 14,500 to 19,000 | ₹1.6 to 2.1 lakh | ₹1.0 to 1.6 lakh |
Senior Engineer | 6 to 9 years | ₹22 to 30 LPA | 26,000 to 36,000 | ₹2.9 to 3.9 lakh | ₹1.8 to 3.0 lakh |
Lead or Engineering Manager | 10+ years | ₹38 to 55 LPA | 45,000 to 66,000 | ₹4.9 to 7.1 lakh | ₹3.0 to 5.5 lakh |
For context, a senior engineer at ₹22 to 30 LPA in Bengaluru costs a US company about a third of what the same role costs onshore, and less than half of what it costs in the UK or the Netherlands. That gap is the entire reason offshore teams exist, but it only holds up once you're pricing the full loaded cost above, not just the salary figure. Use the table above as your starting worksheet whenever someone asks what the actual cost to build an offshore tech team in Bengaluru looks like for your specific role mix.
How Teams Actually Get Built: Process, Timelines, and Trends
Our standard timeline for a first offshore hire in Bengaluru runs 8 to 12 weeks end to end: role scoping in a few days, first shortlist within 7 to 10 days, interviews and offer within another 2 weeks, and then the candidate's notice period, usually 60 to 90 days at their current employer, which is the single biggest timeline surprise for first time offshore hirers.
At AnjuSmriti Global, our technical assessment for product engineering roles runs in two stages: a coding round scoped to the client's actual stack rather than generic problems, and a system design round with deliberately under specified requirements, so we can see how a candidate handles real ambiguity rather than a clean brief.
One pattern we're seeing consistently right now is clients asking for AI fluency as a baseline skill, not a bonus, meaning engineers who can work productively alongside AI coding tools and understand where those tools fall short. We're also seeing more clients plan their EOR to entity transition upfront, even for teams under 10 people, because they're building for three years out rather than treating the first hire as an experiment.
Conclusion
Salary growth at the mid level band should ease slightly as more companies publish standard offer bands, but senior and lead level compensation will likely keep climbing, since demand for engineers who can operate independently continues to outpace supply. That gap will keep pushing the cost to build an offshore tech team in Bengaluru higher at the senior end even as entry level costs stay flatter.
If you're ready to price this out for your own team shape, the fastest way to get an accurate number is to walk through your specific role mix with us directly.
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FAQs
1.How much does it cost to hire one software engineer in Bengaluru?
A mid level engineer with 3 to 5 years of experience typically costs ₹12 to 16 lakh a year in salary, plus roughly ₹1.6 to 2.1 lakh in statutory employer contributions and an EOR fee if you're not incorporated locally. All in, expect ₹15 to 20 lakh a year for one hire at this level.
2.Is it cheaper to hire in Bengaluru through an EOR or by setting up our own entity?
For teams under 15 to 20 people, an EOR is almost always cheaper, since entity setup adds fixed costs like registration, a registered office, and compliance filing that don't scale down. Entity setup only becomes cost effective once your Bengaluru headcount is large enough to spread those fixed costs across more employees.
3.What is the difference between contract and full time hiring cost in Bengaluru?
Contract hiring skips EPF and gratuity but usually costs more per hour or month, and suits short, well defined projects. Full time hiring costs more in statutory contributions but offers continuity, lower attrition, and clearer IP ownership, which matters more for core product roles you plan to keep for years.
4.Does gratuity apply to offshore employees hired through an EOR in Bengaluru?
Yes. Gratuity under the Payment of Gratuity Act, 1972 applies regardless of whether the employee is on your own entity's payroll or an EOR's payroll, as long as they complete 5 years of continuous service. It accrues at about 4.81 percent of basic salary a year and is often missed in early budgeting.
5.How long does it take to build a 10 person offshore tech team in Bengaluru?
Most 10 person teams take 3 to 5 months to fully staff, since each hire runs 8 to 12 weeks end to end including the candidate's notice period at their current employer, which is typically 60 to 90 days for experienced Bengaluru tech talent.
6.Is Bengaluru more expensive than Hyderabad or Pune for offshore hiring?
Yes, generally by 8 to 15 percent for equivalent roles, mainly due to stronger competition from global GCCs and product companies. Bengaluru's larger talent pool often makes up for the premium through faster hiring, which matters when timeline is a bigger constraint than absolute cost.
7.Do offshore engineers in Bengaluru expect equity or ESOPs?
Rarely at the mid level, where fixed salary and bonus predictability matter more. Senior engineers and leads increasingly ask about it, especially those coming from Indian product companies where ESOPs are now common. Since equity is harder to administer through an EOR, many clients offer a cash based long term incentive instead.
8.What's included in an EOR fee for hiring in Bengaluru?
An EOR fee typically covers payroll processing, statutory compliance filing, contract administration, and acting as the legal employer of record so you don't need a local entity. It's usually charged as 8 to 10 percent of the employee's annual CTC, separate from any one time recruitment fee for sourcing the hire.
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