What is the Cost of Hiring International Employees in 2026?

The importance of hiring foreign workers is immense, offering a range of benefits from specialized skills and new perspectives to cultural diversity and innovative ideas. However, while the advantages are evident, HR representatives, executives, and managers must also consider the associated costs.

The process of hiring employees from abroad is complex and involves various expenses that extend beyond traditional hiring costs, including 

• Visa applications
• Relocation expenses
• Compliance requirements. 

Companies must be prepared for the financial commitment required to integrate international talent into their workforce. 

Hiring new employees represents a significant investment in salary, benefits, and more. In the U.S., the average company invests an average of $4,700 to hire a new employee.

Understanding the costs and benefits is crucial to ensure that hiring foreign workers aligns with your company's strategic goals and budget. It involves more than just the initial investment; ongoing expenses such as compliance, mandatory benefits, and employee training also play a significant role.

A well-thought-out approach can help businesses balance these costs with the substantial advantages that foreign employees offer.

What Are the Main Costs of Hiring International Employees?

1. Compliance Costs

Companies must allocate resources to ensure that they adhere to immigration laws, employment contracts, and tax requirements in the employee's home country. This may involve engaging legal counsel or hiring global compliance specialists to navigate the complexities of international employment law.

For example, Canada has strict compliance requirements for hiring foreign employees, including obtaining a Labour Market Impact Assessment (LMIA) and adhering to immigration regulations. Compliance costs can vary, but they typically include legal fees, LMIA application fees, and other government charges.

2. Visa Sponsorship Costs

When hiring foreign employees, one of the most significant costs is immigration and visa processes. Each country has its own immigration laws and the fees vary depending on the type of visa and the country of origin.

For example, when a U.S. employer wants to bring an international employee on-site, they take the H1-B visa route. An H1-B visa can cost you around $5000 or more when accounting for immigration lawyer fees, filing fees, attorney fees, and other potential charges.

3. Relocation Assistance

Relocation costs can vary significantly depending on the distance and scope of the relocation package. However, according to American Relocation Connections (ARC), the average relocation package costs between $24,000 to $97,000 or more. These costs typically include moving expenses, temporary housing, travel expenses, and assistance with settling in.

In Australia, employers hiring foreign employees often offer relocation packages. The cost can range from AUD 10,000 to AUD 15,000, depending on the complexity of the move. It typically includes airfare, shipping of personal belongings, and temporary accommodation.

4. Benefits Costs

These costs are the compulsory contributions and benefits that employers must provide according to a country's laws and regulations.

For example, the Norwegian government provides shared and flexible paternal leaves for 59 weeks, which can be split between the parents respectively. Norway's national insurance scheme pays 80% of the regular income for 59 weeks of leave. If an employee wants to take a reduced leave of 49 weeks, the national insurance pays 100% of their income.

5. Mandatory Employer Costs

Employers are often required to contribute to social security and other mandatory insurance programs on behalf of their foreign employees, by local regulations. These costs can add up significantly, particularly in countries with robust social welfare systems.

In Australia, employees are entitled to superannuation contributions from their employers. By law, employers must contribute 10% of an employee's ordinary earnings on behalf of the employee into the chosen superannuation fund, which serves as a retirement savings scheme for employees in Australia.

6. Competitive Benefits Costs

In addition to mandatory employer costs and mandatory benefits costs, you can offer competitive benefits packages to attract and retain foreign talent. These benefits can include health insurance, retirement plans, stock options, and wellness programs. While providing competitive benefits can enhance employee satisfaction and loyalty, it's essential to consider the associated costs and feasibility within the company's budget.

7. Training and Onboarding

Training and onboarding foreign employees require additional resources to familiarize them with company policies, procedures, and culture. Language barriers, cultural differences, and unfamiliarity with local business practices may necessitate specialized training programs or mentorship initiatives.

8. Gloroots Salary Calculator

By understanding the costs associated with hiring foreign employees, you can make informed decisions that benefit your organization and its workforce. Gloroots' salary calculator simplifies the process, providing real-time market data and comparisons with US salaries that helps you acquire an idea of the global payroll ranges. 

This calculator helps you find the right salary based on job title, country, and median salary information for various roles across more than 45 countries. Using this tool, you can strategically plan budgets and compensation packages, keeping your global workforce engaged and satisfied.

How to use the Gloroots salary calculator?

Using the Gloroots salary calculator is straightforward. Follow these steps to get started:

• Select Job Title and Country: Choose the job title from the provided drop-down list and select the country where you are hiring.
• View Salary Information: Once you've selected the job title and country, the calculator will display the average salary information for your chosen role.
• Compare with the US Median Salary: The calculator compares the salaries with the US market and will then show the difference between the selected country's median salary and the US.
• Use the Data for Planning: With the information obtained, forecast salary requirements and plan budgets more effectively, budget for salaries, and ensure competitive pay scales.

Here is an example: The average salary of a backend developer in Australia

What Are the Additional Costs of Hiring International Employees?

When hiring international talent, the soft costs of hiring are typically higher than for U.S.-based workers. Keep the following factors in mind while estimating the costs of hiring international employees:

1. Recruiting Expenses

Finding qualified candidates in other countries can take additional resources than are needed for recruiting domestically. Consider these factors:

• Engaging third-party recruiting agencies with local market expertise
• Partnering with in-country recruitment specialists
• Additional time and resources for candidate sourcing and vetting
• Higher fees for specialized international recruitment services

2. International Travel Costs

There may be times when international employers need to pay for travel to and from the employee's home country. These situations include:

• On-site visits for initial interviews or orientations
• Company-wide meetings and annual gatherings
• In-person training sessions and team-building events
• Emergency travel for business-critical situations

International travel can be much more costly than the expenses associated with traveling domestically.

3. Country-Specific Benefits

Because of differences in labor laws, the cost of employee benefits is likely to be different from country to country. Key considerations include:

• Healthcare systems vary significantly. The United States is the only developed country that does not offer universal healthcare, while other countries may have social healthcare systems or a combination of government-provided healthcare and private insurance
• Employer contributions for pensions and retirement schemes
• Unemployment compensation requirements
• Mandatory paid time off allocations
• Statutory leave entitlements (maternity, paternity, sick leave)

All of these options typically require employer contributions that vary by jurisdiction.

4. Tax Compliance and Administration

Mandated taxes and contributions can vary from country to country, and can differ based on whether your employee residing abroad is a U.S. citizen. Important factors include:

• Different tax requirements for employees in different countries (for example, required costs for a remote employee in Canada will differ from those for someone in Germany)
• Payroll tax obligations specific to each jurisdiction
• Social security contributions and mandatory insurance programs
• Need for specialized tax expertise or international payroll providers
• Ongoing compliance monitoring and reporting requirements

Understanding the tax landscape, or partnering with an expert who does, is critical for accurately determining the cost of a global workforce.

5. Termination and Severance Costs

Depending on the country in which your employee resides, a severance package might be required in the event of their termination. Planning considerations include:

• Mandatory severance pay based on tenure and local laws
• Notice period requirements that vary by country
• Potential legal costs if disputes arise
• Repatriation expenses in some cases

The specific financial details of any mandatory severance package will need to be determined when budgeting for international hires.

Total Cost Impact: Industry leaders in global employment estimate that total employee costs can increase anywhere from 1.25 to 1.4 times the employee's salary once you include mandated employment taxes and contributions.

How to Reduce the Costs of International Hiring?

Managing the cost of hiring international employees doesn't have to be daunting. With the right strategies, you can streamline the process and keep costs under control. Here are some best practices:

Step 1: Partner With an Employer of Record (EOR)

One of the most effective ways to reduce costs is by working with an Employer of Record (EOR). An EOR serves as the legal employer for your international staff, handling critical tasks including:

• Payroll processing and tax compliance
• Providing local benefits required by law
• Managing labor contracts and employment agreements
• Navigating country-specific regulations

Key benefit: By outsourcing these responsibilities, businesses can avoid the need to set up a legal entity in every country where they hire employees, saving significant time and money.

Step 2: Leverage Remote Work Options

Not all international roles require employees to relocate. Allowing workers to remain in their home country offers several advantages:

• Eliminates relocation expenses entirely
• Reduces compliance complexity
• Avoids visa sponsorship costs for many positions
• Maintains employee satisfaction by avoiding disruption

This approach can dramatically reduce your overall hiring costs while still accessing global talent.

Step 3: Invest in Technology

Technology can simplify many aspects of international hiring and reduce associated costs:

Onboarding and training:

• Virtual onboarding platforms reduce travel costs for training
• Digital document management streamlines compliance

Payroll and payments:

• Global payroll software ensures accurate and efficient payments in multiple currencies
• Automated tax calculations reduce errors and administrative time

Communication and collaboration:

• Video conferencing tools minimize the need for in-person meetings
• Project management platforms facilitate seamless remote collaboration

These technology investments often pay for themselves through reduced travel and administrative costs.

Step 4: Conduct Market Research

Before hiring internationally, invest time in researching local labor markets to understand:

• Standard salary ranges for the position in your target country
• Cultural expectations regarding benefits and working conditions
• Local job market trends and talent availability
• Cost-of-living considerations that affect compensation expectations

Outcome: This research will help you craft competitive offers while avoiding unnecessary expenses and ensuring you stay within budget.

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Benefits of Hiring Foreign Employees

• Access to diverse skills

Hiring foreign employees adds more diversity to your talent pool, enabling you to harness different skill sets that emanate from specific cultural settings. This can be particularly beneficial in industries with skill shortages or where specific expertise is in high demand.

Having employees from different countries can help expand your business into new markets. Their knowledge of local markets, languages, and business practices can facilitate international expansion, foster relationships with overseas clients, and unlock opportunities in new markets.

• Increased Competitiveness

Hiring foreign employees can make a company more competitive in the global market. By leveraging their unique skills and knowledge, businesses can differentiate themselves from competitors and offer more comprehensive services to clients worldwide.

• Innovation and Creativity

With a diverse team, companies are better positioned to encourage a broader range of ideas and approaches. This often leads to increased innovation, allowing businesses to stay ahead of industry trends and meet evolving customer needs.

Challenges of Hiring a Foreign Employee

Hiring foreign employees can present several challenges that employers must navigate carefully. Here are some of the key challenges:

Employment compliance 

Employers must ensure compliance with various employment laws and regulations, including immigration laws, labor laws, and tax laws. Failure to comply can result in penalties, fines, and legal issues. Understanding and adhering to the specific requirements for hiring foreign workers in the respective country is crucial.

Employee benefits 

Providing appropriate employee benefits to foreign workers can be complex. Employers must consider factors such as healthcare coverage, retirement plans, and other statutory benefits based on the country's laws. Ensuring compliance with local regulations and offering competitive benefits packages can be challenging.

Setting up a legal entity to hire foreign employees 

In some cases, employers may need to establish a legal entity or subsidiary in the country where they intend to hire foreign employees. This process can be time-consuming and expensive, involving legal and regulatory hurdles. Understanding the local business environment and navigating the setup process effectively is essential.

Hiring contractors for long-term engagement 

While hiring contractors may seem like a more straightforward option, there are risks associated with misclassifying employees as contractors, especially for long-term engagements. Employers must be cautious about compliance with labor laws and avoid potential legal issues related to employee misclassification.

What our clients are saying

"Seeing Gloroots' highly detailed invoice breakdowns, payroll reports gave us complete assurance that we were fully compliant."

Julio Arias

Co-founder, Sketchnote

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Hire International Employees With Gloroots

Gloroots enables companies to hire international employees through a fully managed, end-to-end model. Instead of coordinating multiple vendors, legal advisors, payroll providers, and compliance partners, Gloroots centralizes the entire international hiring lifecycle under one platform.

By eliminating the need for local entity setup, reducing reliance on external consultants, and preventing compliance errors,

Gloroots significantly lowers the total cost of international hiring. Companies avoid unexpected legal fees, payroll penalties, and administrative overhead while accelerating time-to-hire across countries.

With Gloroots, international hiring is streamlined from candidate selection to compliant onboarding, allowing businesses to focus on team performance rather than operational complexity.

Gloroots manages the complete international hiring workflow, including:

• Candidate sourcing, shortlisting, and background verification
• Initial screening to assess skills, experience, and role alignment
• Interview coordination and hiring decision support
• Offer letter issuance with locally compliant employment contracts
• Employer of Record (EOR) setup to ensure legal employment without entity formation
• Statutory registrations, payroll configuration, and tax compliance
• Mandatory benefits setup and ongoing benefits administration
• End-to-end employee onboarding aligned with local labor regulations
  
  

This unified approach reduces hiring costs by consolidating tools, minimizing compliance risks, and avoiding duplicate operational spend. As a result, companies gain predictable hiring costs, faster onboarding timelines, and full compliance assurance across countries.

Explore Gloroots → to hire international employees end-to-end while reducing compliance risk, payroll complexity, and global hiring costs.
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FAQs

1. Who is eligible for international workers?

Companies can hire international workers from any country, provided they comply with the relevant immigration laws and regulations of the country where the worker will be employed.

2. What is the limit for foreign workers? 

Many countries have a dependency ratio ceiling (DRC) or quota, which sets the maximum ratio of foreign workers to the total workforce that a company in a specific sector can employ. For example, if the DRC for the services sector is 35%, the total number of foreign workers in a services company cannot exceed 35% of its total workforce.

3. What is a foreign worker? 

A foreign worker, also known as a guest worker, is an individual who works in a country other than their country of citizenship, often through a guest worker program or temporary work visa, to pursue better job opportunities than those available in their home country.

4. Should you consider supplemental benefits?

Yes, offering supplemental benefits beyond mandatory requirements can help attract top international talent and improve retention rates in competitive global markets.

5. What is the difference between hiring an employee and a contractor internationally?

Employees work under direct supervision with set hours and benefits, while contractors operate independently with more flexibility but fewer protections and benefits under local labor laws.

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