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How much does it cost to hire internationally?

The costs associated with growing your team internationally.
October 26, 2022
Oyster Team
Different forms of currency

There’s never been a better time to grow your team internationally. As remote work continues to grow in popularity, employers have even greater opportunities to hire employees from anywhere in the world. Hiring an international employee allows U.S.-based companies to expand their talent search, explore new markets, and increase the diversity in their workforce. 

You will still face some challenges when hiring international employees, though. To hire someone from another country, your company will have to register a local entity or go through a local agency or global employment platform. Managing a global workforce can be difficult, especially considering factors like language barriers and global payrolls, and the process may introduce additional costs. These challenges don’t have to be deal breakers—knowing what to expect puts your company in a position to be competitive when hiring.

How much does it cost to hire an international employee?

It’s hard to calculate an exact answer to this question because there are many likely influences on this cost. However, there are some broadly applicable categories to be aware of.

Work visas

If you plan to have your new international employee come to the United States to work, they will need a work visa. It costs around $5,000 to sponsor an H-1B visa (the standard employment visa in the U.S.) between immigration lawyer fees and filing fees.  

Local currency

If your new hire lives in a different country, the strength of the local currency relative to the U.S. dollar will affect your overall hiring costs. Be aware of the exchange rate between the two currencies when you consider fees and salary negotiations. 

Mandatory employer costs

Ensuring compliance with the local labor laws in each country represented in your workforce is one of the most pressing challenges of international HR. When following local labor laws, don’t make the mistake of forgetting to include mandatory employer costs in your total hiring costs. 

Mandatory employer costs include statutory benefits in the country—like vacations, paid time off, and holiday or 13th-month pay—as well as mandatory employer taxes. 

EOR management fee (if applicable)

If you choose to work with an employer of record (EOR), keep in mind that you will have to pay an EOR management fee. This fee varies depending on the EOR you choose and other factors, but 20% of your hiring costs is a good estimate. 

How to hire international employees

1. Apply for U.S. Department of Labor certification

To hire an international employee, you first need to apply for certification through the U.S. Department of Labor (DOL). The DOL requires you to:

  • Supply evidence that you need a foreign worker to fill your job vacancy.
  • Prove that the job vacancy fulfills all applicable criteria for the foreign labor certification program you’re applying for. 
  • Fill out the appropriate ETA form for your selected program.
  • Show that your company can pay the candidate the prevailing wage or more.
  • Send the completed form and necessary supporting documents to the designated DOL office.

The DOL will decide on your certification and notify you. Once you complete these steps and obtain the certification, you can start your search for an international worker. 

2. Place an international job ad

If you want to attract global candidates, you should post your job ad on job sites catering to these workers. Make sure the post clearly specifies that you are accepting international applicants and clarify whether it's a remote or in-person position. 

3. Select your candidate

Opening applications to the global talent pool may mean that you get more resumes than you’re used to, especially if you’re in an industry with many strong international candidates, like tech.

As you go through the resumes, pick some of your top candidates for interviews, just like usual. Using video conferencing tools to conduct interviews makes it easier to communicate with applicants in other countries. 

4. Obtain necessary work visas

Needing to sponsor a work visa is one of the biggest challenges of hiring international workers to work in-person in the U.S. On average, the total hiring time for first-time H-1B visa recipients is 275 days

Prepare to experience some delays while sponsoring your new employee’s work visa. If you need someone to fill your in-person job vacancy quickly, it may be best to hire a domestic worker.  

5. Follow tax regulations

For employee’s based in other countries, your company will likely be subject to tax regulations in the international employee’s home country as well as the United States. Foreign workers need to obtain a Social Security number from the Social Security Administration, for example, and share it with their employer. Payroll taxes apply to all workers, regardless of their citizenship and location.

For help estimating the total cost of employing a new international team member, use Oyster’s Employee Cost Calculator. You can use these estimates to get a better idea of what it will cost to build your global team.  

About Oyster

Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.

Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.

About the Author

Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce.

About the Author

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