Costs, Comparisons, and How to Switch Providers Without Risk
Short Answer
Employer of Record (EOR) services are widely used by international companies hiring in the Philippines. However, costs, service quality, and transparency vary significantly between global EOR platforms and locally operated Philippine EOR providers. Many companies discover they are overpaying or undersupported — and can switch EOR providers safely, with no disruption to employees, when the transition is handled correctly.
Understanding the Real Cost of an EOR in the Philippines
Total monthly EOR cost in the Philippines consists of four components:
- Employee gross salary (PHP)
- Mandatory statutory costs
- SSS
- PhilHealth
- Pag-IBIG
- 13th month pay accrual
- EOR service fee
- Foreign exchange (FX) margin (often overlooked)
The first two components are fixed by Philippine law.
The difference between EOR providers is driven primarily by service fees and FX handling.
Why Global EORs Are Often Expensive in the Philippines
Global EOR platforms such as Deel, Remote, and Papaya Global are designed to:
- Support hiring across many countries
- Maintain large global compliance and legal teams
- Apply standardised pricing models
- Monetise via flat global fees or percentage-based charges
While effective in high-wage or complex jurisdictions, this model is often less cost-efficient in mature offshore markets such as the Philippines, where employment compliance is well established and relatively stable.
Typical Cost Comparison (Philippines Example)
Example: PHP 60,000 Gross Monthly Salary
| Cost Component | Global EOR (Typical) | Local PH EOR (Typical) |
|---|---|---|
| Gross salary | PHP 60,000 | PHP 60,000 |
| Statutory + 13th month | ~PHP 8,000 | ~PHP 8,000 |
| EOR fee | USD 500–700 | USD 190–290 |
| FX margin | 2–4% (embedded) | Minimal / transparent |
| Total employer cost | Higher & variable | Lower & predictable |
Figures are indicative and based on common market models. Actual pricing may vary by provider and contract.
The FX Margin Issue
Many global EORs invoice clients in USD or EUR while paying salaries in PHP, often applying non-market FX rates. Over time, FX margins can add meaningful cost per employee per year.
Local Philippine EORs typically:
- Run payroll directly in PHP
- Offer transparent FX handling
- Allow payroll funding in local currency
Global EOR vs Local Philippine EOR
Structural Comparison
| Area | Global EOR Platform | Local Philippine EOR |
|---|---|---|
| Pricing model | Flat global fee or % of salary | Flat monthly fee per employee |
| FX handling | Embedded FX margin | Transparent PHP payroll |
| Cost efficiency (PH) | Often high | Typically lower |
| HR support | Centralised, platform-based | Philippines-based HR teams |
| Payroll expertise | Standardised globally | Local payroll calendars & norms |
| Contracts | Global templates | PH-specific employment contracts |
| Employee experience | Platform-driven | Direct local HR access |
| Exit & switching support | Limited | Structured transition support |
| BOT / entity pathway | Often unavailable | Commonly supported |
When Global EORs Make Sense
Global EOR platforms can be suitable when:
- Hiring across multiple countries simultaneously
- Needing consolidated global reporting
- Running short-term or experimental hires
They are often less suitable when:
- The Philippines is a primary delivery hub
- Teams exceed 2–3 employees
- Cost transparency and local accountability matter
Why Companies Switch EOR Providers in the Philippines
Common reasons include:
- Rising costs that no longer scale sensibly
- Percentage-based or opaque pricing
- Slow or impersonal support
- Lack of genuine local HR presence
- No clear path to scale, BOT, or entity setup
Switching EOR providers in the Philippines is common, particularly as teams grow.
The Biggest Myth About Switching EORs
“We’ll need to terminate our staff and start again.”
In reality, a well-managed EOR transition:
- Preserves employment continuity
- Avoids gaps in statutory coverage
- Minimises employee disruption
The change is administrative, not operational.
How to Switch EOR Providers in the Philippines Without Risk
Typical Timeline: 30–45 days
Planning Phase (D-45 to D-30)
- Review existing EOR contract and notice period
- Confirm payroll cut-off dates
- Align onboarding with the new EOR
- Map statutory handover (SSS, PhilHealth, Pag-IBIG)
Employee Communication (D-30 to D-14)
Employees are informed clearly that:
- Their role remains unchanged
- Their pay remains unchanged
- Their benefits continue
- They will be issued a new Philippine-compliant employment agreement by the incoming EOR
Employees are supported by local HR throughout the process.
In most cases, this involves signing a new employment agreement, with no other action required.
Parallel Setup (D-14 to D-1)
- New Philippines-compliant employment contracts prepared
- Employees briefed and supported through contract signing
- Statutory registrations verified
- Leave balances documented
- Final payroll scheduled with outgoing EOR
Transfer Date (Day 0)
- Employment ends with outgoing EOR
- Employment begins immediately with the new EOR
- No gap in employment dates
Stabilisation (D+1 to D+5)
- First payroll verification
- HR check-ins with employees
- Confirmation of statutory filings
What Happens to Employees During the Switch?
| Area | Outcome |
|---|---|
| Salary | No change |
| Role & responsibilities | No change |
| Working hours | No change |
| Benefits | Seamlessly re-established |
| Government IDs | Remain the same |
| Leave balances | Documented and carried over |
| Employment contract | New PH-compliant agreement issued and signed |
A competent local Philippine EOR manages this end-to-end.
Common Risks — and How They’re Avoided
| Risk | Mitigation |
|---|---|
| Payroll timing issues | Payroll calendars aligned in advance |
| Employee confusion | Clear communication before changes |
| Statutory gaps | Local payroll verification |
| FX surprises | Final reconciliation agreed upfront |
When It May Not Be the Right Time to Switch
Switching may not be ideal if:
- You are mid-termination or dispute
- You are closing the role entirely
- You are exiting the Philippines
In these cases, timing matters more than provider choice.
Frequently Asked Questions
Do employees need to sign a new employment contract when switching EORs?
Yes. Employees will sign a new Philippine-compliant employment agreement with the incoming EOR. This is standard practice and does not affect role, salary, or benefits.
Will signing a new contract reset tenure or benefits?
No. While a new contract is issued, employment continuity, statutory benefits, and leave balances are managed to ensure no practical disadvantage to the employee.
How long does it take to switch EOR providers?
Most transitions take 30–45 days, depending on notice periods and payroll cycles.
Do employees need to do anything beyond signing the new contract?
Typically no. Contracts, payroll, and statutory updates are handled by the EOR with local HR support.
Is it risky to move from a global EOR to a local EOR?
No. Many companies experience reduced risk due to better local support, clearer compliance handling, and improved response times.
When is the best time to switch EOR providers?
At a payroll boundary or contract renewal point. A local Philippine EOR can advise on optimal timing.
Final Thought
There is no single “best” EOR — only the right model for your geography and stage.
For companies building teams in the Philippines, many ultimately find that local expertise, transparent pricing, and human support outperform global platforms.
Accuracy & Scope Notice
This content reflects standard Philippine employment practices and common EOR service models. Pricing, processes, and timelines may vary by provider and contract.
