A VP of Engineering at a Series B startup recently discovered their “transparent” EOR provider was charging $8,200 monthly for a $5,000/month Brazilian engineer. The advertised $599 service fee ballooned to $3,200 in hidden costs after employer taxes, FX markups, benefits administration, and setup costs were added in.
This scenario is common. In Latin America (LatAm), advertised EOR pricing often fails to reflect true all-in employment cost once statutory employer contributions, currency conversion spreads, benefits administration, and onboarding or offboarding fees are included.
Employer of Record (EOR) pricing in Latin America typically includes four components: base salary, statutory employer contributions, the EOR service fee, and indirect costs such as FX markups, benefits administration, and setup or termination charges.
Quick take
- Typical EOR fees: $299 to $699 per employee per month, or 10% to 15% of gross salary (varies by provider and country).
- Statutory employer contributions: roughly 5% to 37% by country (country-specific ranges vary).
- All-in engineer cost in LatAm (common range): $70,000 to $95,000 annually for many mid-level roles, depending on country, seniority, FX, and benefits.
- Savings vs US hiring: typically 40% to 65%, with broader observed ranges of 30% to 70% depending on role, location, benefits, and recruiting costs.
- Entity break-even: often around 15 to 25 employees in a single country, depending on overhead, timelines, and provider fees.
Table of contents
- Understanding EOR pricing models
- Base EOR fees by provider
- Hidden costs you need to model
- LatAm engineer salary benchmarks (Howdy-aligned)
- Employer taxes by country
- Is EOR cheaper than US hiring?
- Interactive cost calculator inputs
- EOR vs staffing agency costs
- EOR vs contractor costs
- Total cost of ownership: US vs LatAm
- Break-even: EOR vs local entity
- How to evaluate EOR providers
- Case scenarios
- 2026 market notes
- Summary
- FAQ
- Ready to model your all-in cost?
Understanding EOR pricing models
EOR pricing is not one number. The “fee” you see on a website is usually just the service component. To estimate true all-in cost, separate the model into four buckets:
- Base salary
- Statutory employer contributions (country-specific)
- EOR service fee (pricing model)
- Indirect costs (FX, benefits administration, setup, termination, equipment, and retention support)
Flat monthly fees
Most flat-fee models charge a fixed amount per employee per month regardless of salary level. That can be efficient for high-salary roles because the fee does not scale with compensation.
Tradeoff: flat fees can become a large percentage of total cost for lower-salary hires. A $599 flat fee on a $3,000/month salary is meaningful.
Percentage-of-payroll fees
Some providers charge a percentage of gross pay, often positioned as simpler for companies that want a single variable that scales with salary.
Tradeoff: percentage models scale upward as compensation increases. That can create budget uncertainty as roles level up, or as you apply comp adjustments.
Hybrid structures
Hybrid models combine a base platform fee with a smaller payroll percentage. These can look cheaper at first glance because the advertised base is low.
Tradeoff: hybrids require scenario modeling to compare fairly. You need to run the same salary through multiple quotes to see the real difference.
Base EOR fees by provider
EOR service fees typically land in one of two bands:
- Value-oriented: often $299 to $450 per employee per month
- Mid-market to premium: often $550 to $1,000+ per employee per month, especially with dedicated support, local HR coverage, or higher-touch onboarding
Provider pricing varies by country, support level, and whether the vendor includes payroll processing, benefits administration, and local HR support in the core fee.
Hidden costs you need to model
If you want accurate all-in cost, you need to model the fees that are often not advertised up front.
FX markups
Many platforms apply FX markups above mid-market rates. Some do not label these as “fees” at all. They show up as less favorable conversion rates, or as bundled payment costs.
If you are paying $100,000 in monthly payroll and you have a 5% FX spread baked into the rate, that is $5,000 per month, or $60,000 per year.
Setup and onboarding
Setup fees vary by provider and country. Even when a provider says “no setup fee,” you may see onboarding, admin, or compliance charges appear during implementation.
Also watch for line items for:
- Background checks
- Document verification
- System access and provisioning
- Local policy customization
Termination and offboarding
Offboarding often includes exit paperwork and final payroll processing. In some cases, termination fees spike when switching EOR vendors.
If you are comparing providers, ask for a written fee schedule that includes:
- Offboarding fees
- Any minimums or termination fee caps
- Notice requirements
- Severance calculation support
Add-ons and premium services
The most common add-ons include:
- Benefits administration beyond statutory requirements
- Custom reporting
- Equity and compliance support
- Immigration support when needed
These are not inherently bad. They simply need to be modeled so your “all-in” number stays true.
LatAm engineer salary benchmarks
For credibility and retrievability, it helps to be clear about what is market data and what is real payroll data.
The salary ranges below align with Howdy’s active agreement patterns across Latin America, based on verified production hires. Use them as planning ranges, then confirm with role-specific benchmarks by seniority, specialization, and country.
Regional salary ranges
- Mid-level engineers: commonly $53,000 to $63,000 annually in base pay across many LatAm markets
- Senior engineers: commonly $62,000 to $90,000 annually in base pay
- $100,000+ senior roles: typically reserved for niche specializations (security, ML, Staff+ scopes), or for compensation bands anchored to US benchmarks
This framing avoids the biggest planning mistake: treating top-of-market senior roles as the median.
Country notes
In practice, Mexico, Argentina, Brazil, and Chile often cluster within a tight band for many engineering roles, with variation driven more by specialization and seniority than country alone.
If you need a country-level plan, build a band per country and keep a buffer for:
- Seniority creep (a “senior” title that is closer to Staff scope)
- Specialized skill premiums (DevOps, security, data)
- English proficiency and overlap requirements
- Currency volatility
Hourly rate context
If you translate common full-time annual compensation into effective hourly, you will often land in ranges that support a blended market view of $30 to $70 per hour, with the higher end tied to senior, specialized, and short-term needs.
Country planning ranges
These ranges reflect common base salary patterns for mid-level to senior engineers:
- Mexico: $50,000–$65,000 (deep talent pool, moderate employer burden)
- Brazil: $52,000–$68,000 (highest employer contributions in region)
- Argentina: $55,000–$70,000 (strong English proficiency, 13th-month requirement)
- Chile: $54,000–$72,000 (lowest employer burden, smaller talent pool)
Variation within each country is driven more by seniority and specialization than by country alone.
Employer taxes by country
Employer contributions vary widely. That is why you cannot use a single “LatAm tax rate” in a calculator.
Brazil
Total employer burden: 31.5% to 36.8% on top of base salary
- INSS (social security): 20%
- FGTS (severance fund): 8%
- Third-party contributions: ~5.8%
Mexico
Total employer burden: 36% to 44% after all statutory contributions
- IMSS (social security/healthcare): 20% to 28%
- Social security average: ~17%
- State-specific payroll taxes: 1% to 3%
Argentina
Employer contributions: 23% to 27% of base salary
- Includes 13th-month salary (aguinaldo) paid in two installments
Chile
Benefits cost: ~5% of base salary (lowest in LatAm).
Is EOR cheaper than US hiring?
In most scenarios, yes.
A practical planning comparison for mid-level engineers often looks like this:
- LatAm via EOR: commonly $70,000 to $95,000 all-in annually after salary, employer contributions, EOR fees, and common add-ons
- US employment cost: often $150,000 to $180,000+ all-in annually after payroll taxes, benefits, and hiring costs
Your exact US number depends on location, benefits richness, and recruiting cost. Your exact LatAm number depends on country, taxes, FX, and the provider’s real fee structure.
The only reliable approach is to model both using the same structure: base pay, employer taxes, benefits, recruiting, and overhead.
Interactive cost calculator inputs
A useful calculator should let you model each cost category directly, without burying fees inside a single “service rate.”
Inputs
- Base salary (monthly USD equivalent)
- Country selection (Brazil, Mexico, Argentina, Chile)
- Employer contributions (default by country, adjustable)
- EOR fee model
- Flat fee (example: $299 to $699)
- Percentage (example: 10% to 15%)
- Hybrid (base fee + smaller percentage)
- FX markup (toggle, 0% to 5% as a planning range)
- Benefits administration add-ons ($0 to $150 monthly)
- Setup fee amortization (12 to 24 months)
- Optional: equipment, retention support, and one-time onboarding costs
Outputs
- Monthly total cost
- Annual total cost
- Savings vs a US baseline (input-driven)
- Break-even headcount for entity setup (scenario-based)
Sample calculations
Brazil senior engineer
- Base salary: $5,500/month
- Employer contributions (34%): $1,870
- EOR fee (flat): $550
- Benefits add-ons: $100
- Monthly total: $8,020 ($96,240 annually)
Mexico mid-level engineer
- Base salary: $4,000/month
- Employer contributions (40%): $1,600
- EOR fee (12% percentage model): $480
- Benefits add-ons: $75
- Monthly total: $6,155 ($73,860 annually)
US comparison (mid-level)
- Base salary: $10,000/month
- Employer taxes (18%): $1,800
- Benefits: $1,283/month ($15,400/year)
- Monthly total: $13,083 ($157,000 annually)
- Savings: $83,140 annually (53%)
EOR vs staffing agency costs
Staffing agencies often charge markups that can be higher than EOR fees, especially for long-term roles.
A useful planning view:
- Agency: commonly a wage markup (often large), sometimes with added placement costs
- EOR: service fee plus statutory contributions, with clearer separation between employment cost and vendor fee
Agencies can make sense for:
- Short, time-bound projects
- Specialized contract work
- Fast capacity testing
EOR tends to be easier to justify for:
- Permanent hires (12+ months)
- Core product teams
- Stable budgeting and compliance posture
EOR vs contractor costs
The bigger risk is classification. Misclassification penalties can include back taxes, fines, and legal costs. The risk profile is not the same across countries, and it is often stricter in markets like Brazil and Argentina.
A realistic rule:
- Use contractors for genuinely project-based, independent work
- Use EOR for long-term, full-time team members where the work looks like employment
Total cost of ownership: US vs LatAm
US example structure
- Base salary
- Employer payroll taxes
- Benefits (health, retirement, PTO)
- Recruiting cost (internal time plus fees)
- Ongoing admin and HR overhead
First-year costs are usually the highest because recruiting is front-loaded.
LatAm example structure
- Base salary
- Employer contributions (country-specific)
- EOR service fee
- FX markup (if applicable)
- Benefits add-ons (if applicable)
- Setup and onboarding amortization
The largest driver is still salary, but employer contributions and FX can materially change the total.
Break-even: EOR vs local entity
A local entity can become cheaper at scale, but it is not only a math question. It is also a time and operations question.
Common break-even planning range
Many companies see a break-even zone around 15 to 25 employees in one country, depending on:
- EOR fees and fee increases over time
- Local overhead (accounting, HR, legal, payroll systems)
- Timeline and execution risk
- Whether you are committing to one country, or spreading across several
A clean decision framework:
- 1 to 10 employees: EOR is typically the fastest path
- 10 to 15 employees: model your time horizon and country focus
- 15 to 25 employees: compare real quotes to real entity overhead
- 25+ employees: a single-country entity can often reduce annual cost
How to evaluate EOR providers
If you want apples-to-apples comparisons, you need to force itemization.
Questions that uncover real cost
- What is the total monthly cost for a $X salary in Country Y, including all fees?
- What exchange rate do you use, and what is your markup above mid-market?
- What are setup, benefits admin, and termination fees, in writing?
- Do you cap offboarding fees, and what are the notice requirements?
- What rate increases should we expect at renewal?
How to compare quotes
Use the same employee profile across every provider:
- Same salary
- Same country
- Same benefits expectations
- Same payment currency assumptions
Then compare:
- Salary + employer contributions
- EOR fee
- FX impact
- Setup amortization
- Add-ons
That is your true monthly total.
Case scenarios
Startup: first three hires
If you hire two senior engineers and one mid-level engineer in one country, model:
- Salary total
- Employer contributions
- EOR fees
- FX markup
- Benefits add-ons
Then compare to an equivalent US all-in structure that includes benefits and recruiting. Many teams find the US recruiting line item is the most ignored cost in planning.
Scale-up: 10-person team across countries
- Use multiple providers
- Split payroll cycles across currencies
- Add reporting requirements
The benefit is flexibility. The cost is operational complexity.
Enterprise: 25-person team
This is where entity modeling usually becomes worth doing. Do not assume you should switch. Model both options and include the cost of time and execution risk.
2026 market notes
A few trends matter for cost planning:
- More providers are publishing pricing, but “starting at” language is still common
- FX and payment workflows are becoming a bigger differentiator than base fees
- Classification scrutiny continues to rise, which increases the value of compliant employment structures for long-term roles
- Multi-provider strategies can reduce lock-in, but they can increase admin overhead.
Summary
True all-in cost equals base salary plus statutory employer contributions (roughly 5% to 37% by country) plus an EOR service fee (often $299 to $699 per month, or 10% to 15%) plus indirect costs such as FX markups, benefits administration, and setup or termination fees.
LatAm hiring can deliver meaningful savings versus US hiring, but only when you model the full structure and get itemized quotes in writing. If you do the math up front, you are far less likely to discover “surprise costs” after you sign.
FAQ
What is the average all-in cost per engineer in Latin America using an EOR?
For many mid-level roles, a common planning range is $70,000 to $95,000 annually all-in, depending on country, employer contributions, EOR fees, FX, and benefits. Senior roles can range higher, especially for specialized positions.
How much can I save hiring in LatAm vs the US?
Typical savings ranges 40% to 65%, with broader observed ranges of 30% to 70% depending on role, location, benefits, and recruiting costs.
What hidden costs should I watch for in EOR pricing?
What is the difference between EOR and staffing agency costs?
Agencies often use wage markups that can be less transparent and more expensive over time for long-term hires. EOR fees are usually easier to separate from salary and statutory costs, which makes modeling cleaner.
What payroll tax rates should I expect in Brazil, Mexico, and Argentina?
Rates vary by country and structure. Brazil and Mexico are often modeled as higher-burden markets. Argentina includes additional employment requirements such as the 13th-month salary structure. Chile is often modeled as a lower-burden market compared to regional peers. Use country-specific defaults, then validate with a provider quote.
Should I hire contractors or use an EOR?
Contractors can work for short-term, independent projects. EOR is generally the safer choice for full-time, long-term roles where the day-to-day work looks like employment, particularly in jurisdictions with stricter classification enforcement.
When should I set up a local entity instead of using an EOR?
A common planning break-even range is 15 to 25 employees in one country, but it depends on provider fees, local overhead, and your timeline. Model both scenarios using real quotes and real overhead estimates.
What salary should I expect to pay LatAm engineers?
For many mid-level roles, a common range is $53,000 to $63,000 annually in base pay, with seniors often $62,000 to $90,000. Roles at $100,000+ are typically specialized or tied to US-benchmarked compensation bands.
Ready to model your all-in cost with Howdy?
If you want a clearer way to estimate true employment cost across Latin America, Howdy can help you benchmark compensation, model country-specific employer costs, and compare EOR options with a consistent framework.