You have made the decision to hire a software development team in Central Asia. It is an emerging market with a deep and talented pool of young tech professionals that are ready to hit the ground running and take your next software project across the finish line — but how do you accomplish these goals and how much will it cost?
Hiring in a foreign country is uncharted waters for many U.S.-based tech companies, and leaves many companies with a laundry list of questions. Questions like — what are the costs of hiring in an emerging market like Central Asia? Truss provides tech companies with an end-to-end global employment platform, and we are here to help answer these questions and many more.
Tech startups that are focused on the bottom line can learn more about the real costs of global hiring — payroll, benefits, and local taxes — and how an employer of record can reduce these costs in this breakdown created by Truss that will help answer your questions.
Contact Truss today for more information on our global hiring platform and employer of record services!
READ MORE: How an EOR Reduces Hiring Costs for Tech Startups
How an EOR Simplifies and Reduces Global Hiring Costs
When U.S.-based tech companies make the decision to hire remote talent from around the globe, the costs and fees of finding, recruiting, hiring, and managing that talent are put into sharp relief. Many employer of record providers, like Truss, employ a monthly management fee that is calculated per employee — but that monthly fee may not include additional costs tied to global hiring. These hidden costs can include employer taxes, required employee benefits in the hiring country, and potential administrative fees.
Here is a closer look at the additional costs tied to global hiring and how an employer of record can help you keep employment costs low for U.S. tech companies:
Payroll Taxes and Employer Contributions
Tech companies that hire in Central Asia and other emerging markets around the world are responsible for following the tax laws in the employee’s country of origin — not U.S. taxes. These taxes and employer contributions can include social security, healthcare, unemployment benefits, and much more, and they go beyond the gross salary of your remote employees and can add up over time.
These hidden costs will vary based on where you choose to hire, making it even more important to find a country with a deep talent pool and lower employer costs — and an employer of record can help.
| Country | Average Employer Tax Burden | Key Employer Contributions |
|---|---|---|
| United States | 7.65% – 11% | FICA (Social Security & Medicare), FUTA (Federal Unemployment), and state-specific taxes. |
| Armenia | ~ 0% | 0% Standard Payroll Tax. Most Taxes are Withheld from the Employee’s Gross Salary. |
| Uzbekistan | 12% | Flat 12% Social Tax on Gross Payroll. |
| Kazakhstan | 11% – 14.5% | Includes 6% Social Tax, 5% Social Insurance, and 3% Medical Insurance. |
| Turkmenistan | 20% | Standard 20% Unified Social Insurance Contribution Paid to a State Pension Fund. |
| Georgia | 2% | Minimal 2% Mandatory Pension Fund Contribution Matched by the Employee’s 2% and the State’s 2%. |
| Poland | 19.21% – 22.41% | Total Contributions Include Pension & Disability, Accident Insurance, the Labor Fund, and the Guaranteed Employee Benefits Fund. |
| Azerbaijan | ~ 17.5% | Paid into the DSMF (Social Insurance) System. |
| Kyrgyzstan | 17.25% | Driven by the State Social Fund and Requires Employers to Pay a 15% Pension Contribution. |
How an EOR Reduces Payroll Costs
Global tax law can be complicated for hiring companies — but an employer of record can simplify global payroll and taxes. An employer of record provider takes on the legal responsibility of payroll taxes and employer contributions when you do payroll, and with intimate knowledge of local tax laws, will ensure that your company and employees remain compliant with the local labor laws, reducing the risk of compliance fines and penalties.
Mandatory Employee Benefits and Salary Structure
Mandatory employee benefits can represent a hidden cost that goes beyond employee salaries. These employee benefits can include discretionary bonuses that may include a 13-month payment in select countries, employee severance benefits that can include payment in lieu of notice, employee paid time off, and additional social mandates that are included in the local labor laws.
How an EOR Reduces Employee Benefit Costs
It can be a challenge to remember and account for the added costs associated with employee benefits — but an employer of record can help you reduce costs tied to employee benefits by simplifying the legal process. An employer of record provides legal oversight for employee benefits, ensuring you remain compliant without having to pay additional legal or HR employees.
Administrative and Transactional Fees
U.S.-based tech companies that hire remote global employees without an employer of record partner will find that there are many administrative and transactional fees that need to be accounted for. These hidden administrative fees can include salaries for a local human resources team, tax and payroll specialists, a legal team to ensure you remain compliant with the local labor laws, bank fees, and fees for multi-currency transactions. These administrative fees are a hidden cost that an employer of record can help with.
How an EOR Reduces Administrative Costs
Tech companies hiring in emerging markets like Central Asia can reduce administrative fees by partnering with an employer of record. Most employer of record providers implement a flat per employee fee that accounts for many of these administrative fees, allowing you to focus on your next project without incurring extra costs.
Legal Entity Setup and Overhead Costs
Establishing a legal entity in the hiring country is a viable employment strategy to help you find and hire the remote tech talent you need on your team — but the initial setup costs can be thousands of dollars. A legal entity adds costs to your budget that include office space, legal fees, charter capital, agency fees, and accounting fees.
How an EOR Reduces Legal Entity Setup Costs
When you choose to partner with an employer of record, there is no need to establish a legal entity in the hiring country and you are no longer responsible for these setup costs. These entity setup costs can range from a few hundred dollars to several thousands of dollars, and a global EOR can save you money.
READ MORE: How To Choose the Right EOR for Your Tech Company
Minimize the True Costs of Global Hiring with Truss
A better understanding of the real costs of global hiring across payroll, benefits, and local taxes makes one thing clear — navigating the global hiring process on your own can be an expensive challenge. Instead of spending thousands of dollars to establish a legal entity or being blindsided by hidden fees and currency markups, partnering with Truss as your employer of record provides you with financial transparency.
With transparent flat-rate pricing starting at $499 per month per employee, and a direct, owned-entity in emerging tech hubs like Central Asia and the Caucasus Region, we will handle every aspect of the process from local labor law compliance to gross-to-net calculations without any administrative costs. Don’t let these hidden costs get in the way of finding and hiring the talent you need from around the world.
Contact Truss today to grow your tech company with remote global talent!
