The True Cost of Hiring LATAM Employees: Complete Budget Planning Guide

Most business owners think they understand the cost of hiring LATAM talent. They see the salary numbers and assume they’ll save 70% on their total employment expenses.

Here’s what actually happens: the equipment shipments cost more than expected, compliance gets complicated, currency fluctuations impact your budget, and the management time adds up faster than you planned. Without proper planning, those promised savings can turn into budget surprises.

When you understand the real costs upfront and plan accordingly, LATAM hiring delivers significant cost savings, access to skilled talent, and the ability to scale your team without typical US hiring challenges. You just need to know what you’re actually paying for.

What 70% Payroll Savings Actually Means

Let’s get specific about what those savings look like in real dollars. When we say 70% savings, we’re talking about the salary portion of your employment costs. A marketing manager who costs you $75,000 in the US might cost $25,000 in LATAM. That’s $50,000 back in your pocket per year, per employee.

But that’s just base salary. Your total employment costs include a lot more — and understanding the full picture helps you budget correctly and set realistic expectations.

Here’s how the math actually works: if you’re currently paying $75,000 for a marketing manager in the US, your true cost is probably closer to $90,000-$100,000 when you add benefits, taxes, equipment, and office space. With LATAM hiring, that same role costs you roughly $35,000-$40,000 all-in. That’s still 60% savings on your total employment expenses.

Real Salary Benchmarks for Common Roles

Understanding current market rates helps you budget accurately and offer competitive compensation that attracts quality candidates.

Marketing Roles

Digital marketing specialist: $18,000-$35,000 annually (vs. $45,000-$65,000 US)
Marketing manager: $30,000-$50,000 annually (vs. $60,000-$85,000 US)
Head of marketing: $40,000-$60,000 annually (vs. $90,000-$120,000 US)

Sales Positions

Sales development rep: $18,000-$30,000 annually (vs. $50,000-$70,000 US)
Account executive: $25,000-$45,000 annually (vs. $70,000-$100,000 US)
VP of Sales: $50,000-$80,000 annually (vs. $120,000-$180,000 US)

Technical Roles

Mid-level developer: $25,000-$40,000 annually (vs. $80,000-$120,000 US)
Senior developer: $40,000-$60,000 annually (vs. $120,000-$160,000 US)
DevOps engineer: $35,000-$55,000 annually (vs. $100,000-$140,000 US)

Administrative and Support

Virtual assistant: $8,000-$18,000 annually (vs. $35,000-$45,000 US)
Operations manager: $25,000-$40,000 annually (vs. $60,000-$80,000 US)
Customer success: $20,000-$35,000 annually (vs. $50,000-$70,000 US)

These ranges vary by experience level, English proficiency, and specific country. Mexico and Colombia tend to be at the higher end, while Argentina and Peru often offer the deepest discounts.

Why US Employment Costs So Much More

To understand your LATAM savings, you need to see what US employees actually cost beyond their salary. When you hire someone in the US for $75,000, your true cost hits $90,000-$100,000 per year. Here’s why:

Payroll Taxes and Benefits US employers pay 7.65% in Social Security and Medicare taxes on every employee’s salary. That’s $5,737 on a $75,000 salary. You’re also required to provide healthcare benefits, which average $15,000-$20,000 per employee annually. Add unemployment insurance, workers’ compensation, and other mandatory costs, and you’re looking at $20,000-$30,000 in additional expenses per employee.

LATAM Employment Through EOR When you hire LATAM talent through an Employer of Record, those US payroll taxes disappear completely. You don’t pay Social Security, Medicare, or US unemployment taxes. Healthcare is handled locally at much lower costs. The EOR fee typically runs $400-$800 monthly per employee, but that replaces $20,000+ in US employment costs.

Equipment and Setup Costs Most LATAM professionals need equipment to work effectively. Budget $600-$800 for a quality laptop that meets their needs. Shipping costs add another $150-$300, and you’ll face import duties of 15-25% on electronics in most LATAM countries. Total equipment cost per employee typically runs $1,000-$1,500 for the initial setup.

Communication and Collaboration Tools Remote teams need proper tools to work effectively, whether they’re in LATAM or anywhere else. Budget $50-$100 per employee monthly for communication platforms, project management software, VPN access, and other collaboration tools. These are standard costs for any remote team, not specific to LATAM hiring.

Legal and Compliance Requirements This is where many companies get surprised by unexpected costs. LATAM countries have specific employment laws, and misclassification can result in hefty penalties.

If you hire employees directly, you’ll need legal entities in each country. Entity setup costs range from $3,000-$15,000 depending on the country, plus $800-$3,000 monthly for ongoing compliance and accounting.

Most companies use Employer of Record services instead, which handle all legal compliance for $400-$800 per employee monthly. While this adds to your costs, it eliminates legal risks and setup complexity.

Ready to build your LATAM team without the legal headaches? Scale smarter with elite LATAM professionals at 70% lower salary cost—no compromise on quality, compliance, or speed. Book a free 15-minute strategy call.

Currency Risk and International Payments

Currency fluctuations can impact your budget, especially with longer-term employment relationships. The Argentine peso, for example, has been particularly volatile, while Mexican peso and Colombian peso tend to be more stable.

You’ll pay fees for international transfers — typically $15-$50 per transfer plus 1-3% in currency conversion fees. Using services like Wise or Deel can reduce these costs significantly compared to traditional banks.

Many companies hedge against currency risk by offering USD-denominated contracts or using forward contracts for larger teams. This adds complexity but provides budget predictability.

EOR Services vs. Direct Hiring Costs

Most companies face a choice between setting up legal entities in each country or using Employer of Record services. The math is pretty straightforward.

EOR Service Costs EOR providers typically charge $400-$800 per employee monthly. These fees cover legal employment, payroll processing, benefits administration, and compliance management. The exact cost depends on the country and level of service you need.

Direct Entity Costs Setting up your own entities is far more complex and expensive than most business owners realize. Initial legal setup costs range from $15,000-$50,000 per country when you factor in attorney fees, entity registration, and compliance requirements. Each LATAM country has completely different processes and regulations, some taking 6-12 months to complete.

You’ll need local legal counsel in each country since the requirements vary dramatically. Brazil requires different documentation than Mexico, which is entirely different from Colombia’s process. Attorney fees alone can run $10,000-$20,000 per country just for the setup.

Banking setup adds another layer of complexity and cost. Opening corporate bank accounts requires in-person visits in many countries, additional legal documentation, and ongoing monthly fees. Expect $2,000-$5,000 in banking setup costs per country, plus ongoing conversion fees on every transaction.

Ongoing operational costs include $3,000-$8,000 monthly per country for accounting, payroll processing, compliance management, and legal updates. Many countries require additional expenses based on employee count, ergonomic workspace consultations, and other regulatory requirements that can add thousands more annually.

The break-even point typically occurs around 25-30 employees per country, making EOR services the practical choice for most companies.

Planning Your Total Budget

Here’s how to calculate your true all-in costs for LATAM hiring:

Year 1 Costs (per employee):

Base salary: $25,000 (marketing manager example)
EOR fees: $6,000 ($500/month average)
Equipment setup: $2,000
Management overhead: $3,000 (additional tools and time)
Total Year 1: $36,000

Ongoing Annual Costs (per employee):

Base salary: $25,000
EOR fees: $6,000
Equipment refresh: $500 (annual average)
Management overhead: $2,000 (reduced after initial setup)
Total Ongoing: $33,500

Compare this to $90,000-$100,000+ for equivalent US roles (including benefits, payroll taxes, and overhead), and you’re still saving $55,000+ annually per employee after all additional costs.

Break-Even Timeline and ROI

Most companies see positive ROI within 6-12 months of hiring LATAM talent. The savings compound quickly as you add team members and refine your processes.

For a marketing manager role, you break even on first-year costs (including equipment and setup) within 6 months. Every month after that represents pure savings compared to US hiring costs.

The ROI becomes even more compelling when you factor in productivity improvements and reduced turnover. LATAM professionals often show higher engagement and retention rates compared to US counterparts, reducing replacement costs and improving long-term value.

Common Budget Mistakes to Avoid

Underestimating management time. Remote teams require more structured communication, especially initially. Plan for this in your budget and team capacity.

Forgetting about equipment refresh. Technology needs upgrading every 3-4 years. Budget for this from the beginning rather than getting surprised later.

Choosing the cheapest option without considering quality. Extremely low salaries often indicate inexperience or poor English skills. Invest in quality candidates who deliver better long-term value.

Not factoring in currency volatility. Build buffers into your budget for exchange rate fluctuations, especially with less stable currencies.

Making the Business Case

When presenting LATAM hiring to stakeholders, focus on total cost of ownership rather than just salary savings. A $35,000 all-in cost for a role that costs $90,000-$100,000 in the US (including benefits and payroll taxes) represents $55,000+ in annual savings per employee.

For a team of 10 LATAM employees, you’re looking at $400,000 in annual cost savings compared to US hiring. That’s significant budget that can be reinvested in growth, technology, or other strategic initiatives.

The quality and productivity often match or exceed US counterparts, especially when you hire experienced professionals who’ve worked with US companies before.

Frequently Asked Questions

What’s the typical cost range for different experience levels? Entry-level roles typically cost 60-70% less than US equivalents, while senior and executive positions often provide 70-80% savings. The percentage savings actually increase at higher skill levels, with absolute dollar savings becoming substantial for leadership roles.

How much should I budget for equipment and setup? Plan for $1,500-$3,000 per employee in year one, then $300-$500 annually for equipment refresh and upgrades. This varies by role — developers need more expensive equipment than administrative roles.

Are EOR services worth the extra cost? For most companies, yes. EOR services eliminate legal risks, reduce administrative burden, and let you focus on finding and managing talent rather than compliance requirements. The cost is usually justified by the time and complexity savings.

How do I handle currency fluctuations in my budget? Build 10-15% buffers into your budget for exchange rate variations. Consider USD-denominated contracts for key roles or currency hedging strategies for larger teams.

What’s the real break-even timeline for LATAM hiring? Most companies see positive ROI within 6-12 months, factoring in all setup costs and initial productivity ramp-up. The payback period shortens significantly after your first few hires as processes improve.

Conclusion

LATAM hiring offers substantial cost savings, but success requires realistic budgeting and proper planning. While you won’t save exactly 70% on total employment costs, you will typically save 50-65% compared to US hiring when accounting for all expenses.

The key is understanding the full cost structure upfront and budgeting for equipment, management overhead, compliance requirements, and currency considerations. Companies that plan properly see excellent ROI and often expand their LATAM teams significantly over time.

The talent is there, the infrastructure supports remote work, and the cost advantages are real. With proper budget planning and realistic expectations, LATAM hiring becomes a powerful tool for scaling your business efficiently.

Hire Smart, Scale Fast.

About the Author

The author is Co-Founder and VP of Sales at Viva Global, a leading remote staffing agency and employer of record specializing in connecting US companies with the top 1% of Latin American talent under the motto “Talent Without Borders.” With extensive experience across Fortune 500 companies, top-rated tech firms, and early-stage startups in sales and customer success roles, the author has witnessed firsthand how recruitment processes evolve as companies scale. This diverse background has shaped a unique perspective on talent acquisition that now drives Viva Global’s approach to placing remote employees across various industries, helping businesses overcome hiring challenges and build thriving distributed workforces.