A practical guide for Australian accounting and financial services firms
Author: Martin English
Published: May 27, 2026
Hiring a finance team in the Philippines involves more than paying salaries. Australian companies should understand how local payroll, statutory contributions, tax withholding, employment contracts, privacy, system access and offshore governance will be managed.
A Philippines-based Employer of Record can manage the local employment relationship and payroll administration. The Australian company still remains responsible for its own business operations, supervision, data access, privacy obligations and applicable regulatory requirements.
This guide provides general information only. It is not legal, tax, privacy or regulatory advice. Requirements may vary depending on the company, role, systems, data access and employment structure.
Quick answer
A compliant payroll structure for a Philippines-based finance employee may include:
- Salary payments in Philippine pesos
- SSS contributions
- PhilHealth contributions
- Pag-IBIG contributions
- BIR withholding tax
- 13th-month pay
- Payslips
- Payroll records
- Statutory remittance records
- Payroll reconciliation
- Audit and reporting procedures
Before onboarding an employee, the Australian company should also:
- Confirm the worker’s employment status.
- Verify the EOR provider.
- Review the employment contract.
- Confirm salary and employee-specific costs.
- Review privacy and data-transfer requirements.
- Define system access and security controls.
- Agree payroll reporting and escalation procedures.
- Document the company’s responsibilities and the EOR’s responsibilities.
If you are planning to hire without setting up a Philippine company, read our guide to hiring employees in the Philippines without a company.
SOS EOR pricing
Smart Outsourcing Solution charges one EOR management fee:
US$190 per employee per month
This is the only SOS EOR rate. It is not a starting price, estimate or price range.
Recruitment and candidate selection are included in the fee. There is no separate recruitment fee.
Salary, employer statutory contributions, 13th-month pay, benefits, allowances, equipment and other employee-specific costs are separate where applicable.
Under the standard SOS EOR structure, there are:
- No hidden SOS provider costs
- No FX markup
- No onboarding fee
- No SOS provider termination or exit fee
A real person remains involved throughout recruitment, onboarding, payroll, HR support, compliance and offboarding.
For a full breakdown, see Philippines EOR pricing.
Why payroll compliance matters
Payroll errors can affect employees, financial reporting and the company’s ability to demonstrate proper oversight.
For Australian finance teams, payroll records may support:
- Internal audit
- Outsourcing governance
- Payroll reconciliation
- Financial reporting
- Employee recordkeeping
- Statutory compliance reviews
- Operational-risk assessments
The risk may be greater when offshore employees:
- Access customer financial information
- Work in accounting or payroll systems
- Support mortgage processing
- Handle client administration
- Assist with AML or compliance work
- Access CRM or financial platforms
- Become part of recurring finance operations
1. Confirm the employment structure
The first step is to assess whether the role should be structured as employment or independent contracting.
A role may have characteristics of employment where the company:
- Sets regular working hours
- Directs how work is performed
- Provides ongoing supervision
- Assigns recurring operational duties
- Integrates the person into internal workflows
- Requires the use of company systems
- Expects a long-term working relationship
The written agreement is only one part of the assessment. The actual working relationship and level of control should also be considered.
An EOR can support a formal employment structure, but it does not replace a case-specific classification review.
If you are converting an existing contractor, read the contractor-to-EOR conversion guide.
2. Verify the EOR provider
Before appointing an EOR, review:
- The provider’s Philippine legal entity
- Corporate registration details
- Employment contract process
- Payroll procedures
- SSS, PhilHealth and Pag-IBIG processes
- BIR withholding and reporting
- Employee recordkeeping
- Benefits administration
- Onboarding and offboarding procedures
- HR support and escalation processes
- Data-security controls
- Confidentiality procedures
- Payroll reporting
- Audit support
- Treatment of employee-specific costs
- Responsibilities when employment ends
Ask the provider to explain exactly what is included in the management fee and what costs are separate.
3. Review the employment contract
The employee should receive a written employment contract that clearly explains the employment terms.
The contract should address, where applicable:
- Position title
- Duties and responsibilities
- Salary and pay schedule
- Working hours
- Work location
- Probationary period
- Leave entitlements
- Benefits and allowances
- Confidentiality
- Data privacy
- Intellectual property
- Company systems and access
- Notice and termination provisions
- Statutory contributions
- 13th-month pay
- Employee policies
- Dispute and escalation procedures
For finance roles, the contract should clearly address confidential information, client records, system access and appropriate use of company data.
4. Understand Philippine payroll obligations
Philippine payroll commonly involves:
- SSS contributions
- PhilHealth contributions
- Pag-IBIG contributions
- BIR withholding tax
- 13th-month pay
- Payslips
- Payroll records
- Statutory remittance reporting
- Final-pay calculations
Employer statutory contributions are employee-related costs and are separate from the US$190 SOS EOR management fee.
Under the standard SOS EOR structure, employee wages and mandatory government contributions are passed through at cost. 13th-month pay is also an employee-related cost and may be invoiced monthly at 1/12 of the employee’s monthly base wage.
Payroll requirements and contribution schedules may change. Confirm current requirements before approving a quote.
5. Review statutory remittances
Australian companies should ask the EOR how it manages and documents:
| Area | What to request |
| SSS | Registration and remittance confirmation |
| PhilHealth | Membership and contribution records |
| Pag-IBIG | Registration and remittance records |
| BIR | Withholding and tax-reporting records |
| 13th-month pay | Accrual and payment records |
| Payroll | Payroll register and payslips |
| Final pay | Calculation and payment records |
The company should know how often these records are provided and who reviews them.
6. Understand 13th-month pay
Eligible employees in the Philippines may be entitled to 13th-month pay under applicable employment rules.
The usual calculation is:
Annual basic salary ÷ 12
Under the standard SOS structure, 13th-month pay may be invoiced monthly at 1/12 of the employee’s monthly base wage. This spreads the cost across the year and makes payroll forecasting easier.
The applicable calculation and payment requirements should be confirmed for the specific employee.
7. Review Australian privacy obligations
Australian Privacy Principle 8 may apply when an Australian company discloses personal information to an overseas employee or service provider.
Before providing access to offshore staff, review:
- What information the employee will access
- Where the information will be stored
- Whether the information will leave Australia
- Which systems the employee can access
- Who approves access
- How access will be reviewed
- How incidents will be reported
- How information will be returned or deleted
- Whether a Data Processing Agreement is required
- Whether confidentiality obligations are documented
A Data Processing Agreement is generally recommended and may be required depending on the information, parties and arrangement involved.
The Australian company should also review its privacy policy, customer notices, contracts and internal procedures where relevant.
8. Apply practical security controls
Before the employee starts, define:
- Minimum access required for the role
- Role-based permissions
- Multi-factor authentication
- Password requirements
- Device and software controls
- Secure remote access
- Encryption requirements
- Download and printing restrictions
- Email and file-sharing rules
- Audit logging
- Security training
- Incident-reporting procedures
- Access-review frequency
- Offboarding and access-removal steps
Use the least-privilege principle. Employees should receive only the access required for their assigned duties.
| Control | Finance administration | Financial reporting | AML or compliance |
| Multi-factor authentication | Required | Required | Required |
| Least-privilege access | Required | Required | Required |
| Confidentiality agreement | Required | Required | Required |
| Audit logging | Recommended | Required | Required |
| Secure remote access | Recommended | Required | Required |
| Background screening | Recommended | Required | Required |
| Data Processing Agreement | Review applicability | Review applicability | Review applicability |
The required controls should match the role, systems and information involved.
9. Assess Australian outsourcing responsibilities
Australian finance and financial services companies should assess whether the offshore role supports:
- A material business function
- A critical operation
- A regulated activity
- Customer-facing work
- Financial reporting
- Compliance monitoring
- Mortgage processing
- Paraplanning
- AML support
- Operational finance
Consider:
- The nature of the work
- The systems and information involved
- The effect of provider failure
- Business continuity requirements
- Concentration risk
- Supervision and quality controls
- Audit rights
- Incident reporting
- Service monitoring
- Exit and transition planning
AFSL holders should determine whether the arrangement needs to be recorded in an outsourcing, risk or governance register. Confirm the applicable requirements with legal, risk or compliance advisers.
APRA-regulated organisations should review the CPS 230 and offshore teams guide before finalising a material offshore arrangement.
10. Define responsibilities between the company and EOR
| Area | Australian company | SOS EOR |
| Daily work and priorities | Manages | Supports the employment relationship |
| Performance expectations | Sets and manages | Provides HR support where required |
| Employment contract | Provides role and package requirements | Administers local employment documentation |
| Salary and benefits | Approves the package | Processes according to agreed terms |
| Payroll | Reviews and funds payroll | Administers payroll |
| Statutory contributions | Funds applicable costs | Administers and remits applicable contributions |
| Recruitment | Approves role and candidate requirements | Recruitment and candidate selection included |
| System access | Approves and reviews access | Supports agreed employment processes |
| Privacy and security | Controls business data and access | Supports agreed employment processes |
| HR support | Manages business-related matters | Provides employment and HR support |
| Offboarding | Confirms business decision and handover | Manages employment administration and final pay |
These responsibilities should be reflected in the EOR agreement, service schedule and employee-specific terms.
11. Maintain a payroll audit trail
Australian companies should retain:
- Worker-classification assessment
- EOR due-diligence records
- Provider registration checks
- Signed employment contract
- Employee identity and employment documents
- Statutory registration records
- Payroll registers
- Payslips
- Salary approvals
- Remittance confirmations
- 13th-month pay calculations
- Benefits records
- Data Processing Agreement, where applicable
- Confidentiality agreement
- Access approvals
- Security training records
- Incident reports
- Payroll reconciliation reports
- Offboarding confirmation
The exact records required depend on the company’s structure, systems, industry and regulatory obligations.
12. Plan onboarding and offboarding
Existing employees can generally be onboarded as early as five business days once the following are complete:
- Signed agreement
- Complete employee information
- Required employment documents
- Agreed salary and benefits
- Required approvals
- Payroll funding
For new candidates, recruitment is included in the EOR fee. The timeline may vary depending on:
- Role requirements
- Candidate availability
- Seniority
- Interviews
- Assessments
- Reference checks
- Offer acceptance
- Notice period
- Required documentation
Before the employee starts, prepare system access, security training, confidentiality documents, reporting lines, escalation contacts and payroll information.
When employment ends, review:
- Notice requirements
- Final-pay calculations
- Accrued leave
- Statutory obligations
- Benefits termination
- Return of equipment
- Data return or deletion
- System-access removal
- Client communication
- Handover responsibilities
There is no SOS provider termination or exit fee under the standard EOR structure. Legally required final pay, severance, accrued benefits or other employee-related obligations may still apply.
Frequently Asked Questions
Is payroll administration included in the SOS EOR fee?
Yes. The US$190 SOS EOR management fee includes standard employment and payroll administration.
Employee salary, employer statutory contributions, 13th-month pay, benefits, allowances, equipment and other employee-specific costs are separate where applicable.
Is recruitment included?
Yes. Recruitment and candidate selection are included in the SOS EOR management fee. There is no separate recruitment fee.
What is the SOS EOR fee?
The SOS EOR management fee is US$190 per employee per month. This is the only SOS EOR rate.
Are there hidden SOS provider fees?
No. The standard SOS EOR structure has no hidden provider costs, FX markups, onboarding fees or provider termination or exit fees.
Can Australian companies run Philippine payroll without a local entity?
An Australian company without a Philippine entity may not be able to register and administer local employment obligations directly. An EOR can provide the local employment structure and payroll administration required for the arrangement.
Does APP 8 apply to offshore finance teams?
APP 8 may apply when an Australian company discloses personal information to an overseas recipient. The specific obligations depend on the information and arrangement.
How quickly can an existing employee be onboarded?
Existing employees can generally be onboarded as early as five business days once the agreement, employee information, required documents and funding are complete.
Does SOS take responsibility for the Australian company’s compliance?
No. SOS manages the local employment relationship and related employment administration. The Australian company remains responsible for its business operations, supervision, system access, data handling and applicable Australian obligations.
Final checklist
Before onboarding a Philippines-based finance employee, confirm that you have:
- Completed a worker-classification review
- Verified the EOR provider
- Reviewed the employment contract
- Confirmed the US$190 EOR management fee
- Confirmed that recruitment is included
- Separated salary and employee-specific costs
- Reviewed statutory contribution processes
- Reviewed privacy and data-transfer requirements
- Completed a data-access review
- Applied role-based access controls
- Enabled multi-factor authentication
- Documented confidentiality obligations
- Defined incident-reporting procedures
- Assessed ASIC, AFSL or APRA requirements where applicable
- Agreed reporting and audit procedures
- Prepared an offboarding and access-removal process
- Documented the arrangement in writing
Speak with a Philippines EOR specialist
Smart Outsourcing Solution can help Australian businesses review:
- Philippine employment requirements
- EOR suitability
- Recruitment and candidate selection
- Salary and employment-cost planning
- Payroll and statutory administration
- Contractor-to-EOR transitions
- Privacy and data-handling considerations
- Offshore governance procedures
- Existing-employee onboarding
- Offboarding and employee transfers
The SOS EOR management fee is US$190 per employee per month. Recruitment and candidate selection are included, while salary and other employee-specific costs are shown separately.
