Most cost comparisons between a local hire and a remote one stop at salary. That is the part of the number that is easiest to find and the part that moves least.
Salary is about sixty per cent of it
A local hire at A$110,000 does not cost A$110,000. Add superannuation, payroll tax, leave loading, insurance, a desk, software licences and the recruiter fee that got them through the door, and the loaded figure lands closer to A$150,000 in year one.
The remote equivalent is a single monthly number that already contains employment, compliance and replacement cover. That is not a discount on the person. It is the removal of everything wrapped around them.
The costs nobody puts in the spreadsheet
- The four months a role sits open while you interview, carried by your existing team.
- The management hours a wrong hire consumes before anyone admits it is wrong.
- The second search, at full recruiter fee, when the first one does not work out.
- The work that simply did not happen because there was nobody to do it.
These are the expensive parts, and they are the parts a lower headline rate does nothing about. Time to hire and retention move the total far more than the salary line does.
Cheap hiring is expensive. Slow hiring is more expensive again.
Where the saving actually comes from
Two places. First, the salary differential in markets where the cost of living is lower and the talent is not. Second, the overhead you stop carrying: no recruitment fee per hire, no on-costs, no compliance exposure in a country whose employment law you do not know.
Run it over three years rather than one and the gap widens, because the on-costs and the churn compound while the monthly fee does not.
What to ask on the call
Ask for the loaded figure, not the rate. Ask what happens if the person leaves in month three, and who pays for the replacement. Ask who holds the employment contract, and in which country. The answers tell you what you are actually buying.
