Employer of Record (EOR) Master FAQ

Updated Led by Martin English, Co-Founder

An Employer of Record allows an international company to hire employees in the Philippines without setting up its own Philippine entity.

Global BPO Solution Philippines Inc., the Philippine legal employer used for SOS EOR arrangements, manages employment administration, payroll, statutory requirements and HR support. Your company directs the employee’s daily work, priorities, systems, access and performance. Formal disciplinary action or termination must be coordinated with and executed through the legal employer.

This master FAQ answers the key questions buyers ask before choosing an EOR in the Philippines.

EOR MANAGEMENT FEE PHILIPPINES
US$ 190 per employee per month
STANDARD EOR MANAGEMENT FEE

Quick answers

Buyer question Short answer
What is an EOR? Global BPO Solution Philippines Inc. legally employs the worker in the Philippines on behalf of the international client.
Can I hire in the Philippines without opening a company? Yes. An EOR can employ the worker locally on your behalf.
What is SOS’s EOR fee? US$190 per employee per month. This is the only SOS EOR management fee.
Is US$190 a starting rate? No. US$190 is the fixed SOS EOR management fee.
Is recruitment included? Yes. Recruitment and candidate selection are included. Your company retains the final hiring decision.
Is there a separate recruitment fee? No. SOS does not charge a separate recruitment fee.
Are salaries included? No. Salary and other employee-specific costs are separate.
Are there hidden SOS fees? No hidden SOS provider charges, FX markup, onboarding fee or standard provider termination fee.
How quickly can hiring begin? A selected candidate or existing contractor may be onboarded in as little as five business days once agreements, employee documents, payroll funding and the required deposit are complete. Recruitment timelines vary.
Who manages the employee? Your company directs daily work. SOS manages local employment administration, while formal employment actions are handled through the legal employer.

1. What is an Employer of Record?

An Employer of Record is a local legal employer that hires and employs workers on behalf of another company. For SOS EOR arrangements, the employing entity is Global BPO Solution Philippines Inc.

In a Philippine EOR arrangement, the EOR generally manages:

  • Local employment agreements
  • Payroll administration
  • Statutory employment processes
  • Employee records
  • Leave administration
  • Benefits administration under the agreed package
  • Employment documentation
  • HR administration
  • Offboarding administration

The client company generally manages:

  • Daily work
  • Task allocation
  • Business priorities
  • Systems and access
  • Training
  • Performance
  • Team integration
  • Operational decisions

An EOR is different from a BPO. An EOR supports dedicated employees who work as part of your team. A BPO provider usually manages a process, function or outcome.

For a broader explanation, see Employer of Record services in the Philippines.

2. Can I hire employees in the Philippines without setting up a company?

Yes. An EOR can employ staff in the Philippines without your business first incorporating its own local entity.

This can be useful when you:

  • Want to hire your first Philippine employee
  • Need to test a new market
  • Are building a dedicated offshore team
  • Want to transition suitable contractors into employment
  • Need local payroll and employment administration
  • Are not ready to establish your own Philippine entity

Read more about hiring in the Philippines without setting up a company.

An EOR does not automatically remove every tax, regulatory, corporate or permanent-establishment consideration. The right structure depends on the work being performed, the level of control, the business activities involved and your long-term plans.

3. How does the EOR model work?

A typical process is:

1

Your company confirms the role, salary, work arrangement and requirements.

2

SOS supports recruitment and candidate selection.

3

Your company interviews and selects the preferred candidate.

4

SOS prepares the local employment documentation.

5

The employee completes onboarding.

6

SOS administers payroll, statutory processes and HR support.

7

Your company manages the employee’s daily work and performance.

The EOR manages the local employment administration. Your company remains responsible for the employee’s work and business outcomes.

4. How much does SOS charge?

SOS charges a fixed EOR management fee of:

US$190

per employee per month

US$ 190 per employee per month

US$190 is the fixed SOS EOR management fee. It is not a starting rate or base fee with another SOS platform charge. Recruitment and candidate selection are included. Salary, statutory contributions, 13th-month pay, benefits, equipment, approved third-party costs and final employment liabilities are separate. Payroll must also be funded in advance, and a refundable employee security deposit is required under the standard agreement.

Cost Treatment
SOS EOR management fee US$190 per employee per month
Recruitment and candidate selection Included
Separate recruitment fee None
Onboarding fee None
SOS provider termination or exit fee None under standard EOR pricing
FX markup None
Hidden SOS provider charges None
Salary and wages Separate employee cost
Employer statutory contributions Separate employee cost
13th-month pay Separate employee cost
Benefits and HMO Separate where applicable
Allowances Separate where applicable
Equipment Separate where applicable
Approved third-party costs Separate where applicable
Statutory final pay and employment entitlements Separate where applicable

See the full EOR pricing guide for the Philippines.

5. Is recruitment included?

Yes. Recruitment and candidate selection are included in the SOS service. Your company retains the final hiring decision.

SOS supports the process of:

  • Confirming the role requirements
  • Sourcing suitable candidates
  • Coordinating interviews
  • Supporting candidate selection
  • Preparing the selected employee for onboarding

The final hiring decision remains with your company.

6. What costs are separate from the EOR fee?

The US$190 management fee is separate from employee-specific costs, payroll funding and the refundable employee security deposit required under the standard agreement.

These may include:

  • Salary or wages
  • Employer statutory contributions
  • 13th-month pay
  • HMO or other benefits
  • Allowances
  • Equipment
  • Statutory final pay
  • Severance or other legally required entitlements
  • Approved third-party costs

These are not hidden SOS provider fees. They are employee-specific or statutory employment costs and should be identified before employment begins.

For finance and accounting roles, see the cost of hiring finance and accounting staff in the Philippines.

7. Are there hidden fees, FX markups or setup charges?

Under standard SOS EOR pricing:

  • There is no hidden SOS provider charge.
  • There is no FX markup.
  • There is no onboarding fee.
  • There is no separate recruitment fee.
  • There is no SOS provider termination or exit fee.

Employee-specific costs, approved third-party costs, advance payroll funding and the refundable security deposit remain separate and should be documented before hiring begins.

8. Is there a termination fee?

There is no separate SOS provider termination or exit fee under standard EOR pricing.

However, the client remains responsible for employee-related amounts and reasonable wind-down costs that may arise under Philippine law or the employment arrangement, including:

  • Final salary
  • Accrued leave
  • 13th-month pay
  • Statutory contributions
  • Severance or redundancy entitlements
  • Other required employment payments
  • Unavoidable third-party or reasonable wind-down costs

These are employment obligations, not an SOS provider termination fee.

9. How quickly can hiring begin?

A selected candidate or existing contractor may be onboarded in as little as five business days once the service agreement, employee documents, required approvals, payroll funding and security deposit are complete. Recruiting a new candidate normally takes longer and varies by role.

The timeline depends on:

  • Role requirements
  • Candidate availability
  • Interview and selection timing
  • Completed employee information
  • Signed agreements
  • Required documentation
  • Funding and payroll deadlines

The usual process includes:

  1. Role confirmation
  2. Candidate sourcing
  3. Interviews and selection
  4. Employment documentation
  5. Onboarding
  6. Start-date confirmation

Five business days is an early target. Specialist, senior or highly regulated roles may require additional time.

10. Who manages the employee?

Your company manages the employee’s daily work, including:

  • Priorities
  • Tasks
  • Work quality
  • Systems and access
  • Training
  • Team integration
  • Performance

SOS manages the employment administration, including:

  • Employment documentation
  • Payroll administration
  • Statutory processes
  • Employee records
  • Leave administration
  • HR support
  • Offboarding administration

Human support is available throughout recruitment, onboarding, payroll, HR administration, employment changes and offboarding. The client provides factual performance information, while formal warnings, disciplinary steps and termination are assessed, documented and executed through the legal employer.

11. Does SOS provide human support?

Yes. SOS provides human support throughout the employment lifecycle.

This includes support with:

  • Recruitment coordination
  • Selection coordination
  • Onboarding
  • Payroll administration
  • Employee questions
  • Employment documentation
  • HR administration
  • Statutory processes
  • Employment changes
  • Offboarding

The exact communication channels, support hours and escalation process should be confirmed in the service scope before engagement.

12. What roles can be hired through an EOR?

An EOR may support a wide range of dedicated Philippines-based roles, including:

  • Customer support specialists
  • Finance assistants
  • Accounts payable and receivable staff
  • Bookkeeping support
  • Reconciliation staff
  • Payroll administrators
  • Developers
  • QA testers
  • Technical support specialists
  • Executive assistants
  • Project coordinators
  • Marketing assistants
  • CRM administrators
  • Data analysts
  • Reporting specialists
  • Compliance administration support

The Australian or international client remains responsible for determining whether a role requires professional licensing, regulated authority, specific approvals or additional supervision.

13. Is EOR the same as outsourcing or BPO?

No.

Model What the client receives Who usually manages daily work?
EOR Dedicated employees with local employment administration Client company
Contractor Services from an independent worker Client, subject to the arrangement
BPO A managed process or defined business outcome Provider
Local entity Direct local employment through the client’s own company Client company

An EOR may be suitable when employees are integrated into your team and managed directly by your business.

A BPO may be more suitable when you want the provider to manage the process, staff and performance outcomes.

14. Is EOR suitable for contractors?

An EOR may support the transition of suitable contractors into formal employment. Classification depends on the real working relationship, not only the contract label.

Philippine courts examine factors including selection and engagement, payment of wages, dismissal power and, most importantly, control over how work is performed. Economic dependence may also be relevant. Converting a contractor to employment can reduce future risk but does not automatically remove exposure created by the earlier arrangement.

Before making the change, review:

  • The existing contract
  • The actual working relationship
  • Working hours
  • Level of supervision
  • Exclusivity
  • Use of company systems
  • Salary and benefits
  • Intellectual property
  • Confidentiality
  • Payroll cutover
  • Employee communication

Read about contractor misclassification in the Philippines and converting contractors to employees.

15. Can an EOR reduce legal or tax risk?

An EOR can help manage local employment administration, but it does not eliminate every legal, tax or commercial risk.

The client may still need to assess:

  • The work being performed
  • Corporate tax and permanent-establishment considerations
  • The employee’s authority
  • Industry-specific regulation
  • Data protection
  • Intellectual property
  • Client confidentiality
  • Cross-border management
  • Australian or international reporting obligations

Companies with complex arrangements should obtain appropriate legal or tax advice.

16. What should buyers review for data security?

Before hiring, review:

  • Data access
  • User permissions
  • Least-privilege controls
  • Multi-factor authentication
  • Confidentiality obligations
  • Data retention
  • Incident response
  • Subprocessors
  • Cross-border data transfers
  • Offboarding access removal
  • Contractual data-processing terms

See the guide to data security and employment compliance for Australian finance teams.

Security claims should be supported by available evidence and contractual commitments. Buyers should not assume that an EOR holds a certification unless it is specifically verified.

17. How should financial services companies evaluate an EOR?

Financial services companies should review:

  • The legal employing entity
  • Employment contracts
  • Payroll controls
  • Statutory administration
  • Employee access to sensitive information
  • Supervision and approval processes
  • Vendor oversight
  • Incident escalation
  • Business continuity
  • Confidentiality and intellectual property
  • Offboarding controls

Australian financial services firms can read the AFSL compliance guide for Philippines teams and the guide to CPS 230 and offshore teams.

For the sector-specific guide, see EOR for Australian financial services companies hiring in the Philippines.

18. Can an EOR support a growing team?

Yes. An EOR may support a company starting with one employee and expanding over time.

As the team grows, review:

  • Payroll approval workflows
  • Reporting
  • Benefits administration
  • Account support
  • Manager and team-lead structures
  • Data-access governance
  • Employment changes
  • Offboarding procedures
  • Whether EOR remains the right long-term model

19. What should I ask an EOR provider before signing?

Ask the provider:

  1. Which entity will legally employ our staff?
  2. What is included in the monthly fee?
  3. Is recruitment included?
  4. Is there a separate recruitment fee?
  5. Is the US$190 rate fixed?
  6. Which employee-specific costs are separate?
  7. How are salary and statutory contributions administered?
  8. How is 13th-month pay handled?
  9. Is there an onboarding fee?
  10. Is there an FX markup?
  11. Is there a termination or exit fee?
  12. How quickly can our employees start?
  13. Who manages the employee’s daily work?
  14. What human support is available?
  15. How are data, confidentiality and intellectual property handled?
  16. How are employee changes and offboarding managed?
  17. Is a refundable security deposit required?
  18. When must payroll be funded?
  19. What notice is required to end the service?
  20. Can we employ the worker directly after the agreement ends?
  21. What happens if we later establish our own Philippine entity?

A suitable provider should document the agreed scope, costs, responsibilities and employment process before hiring begins.

20. Is SOS the right EOR provider for my business?

SOS may be suitable if you want to:

  • Hire dedicated employees in the Philippines
  • Avoid setting up a Philippine entity initially
  • Access recruitment and candidate selection support
  • Pay one fixed EOR management fee
  • Receive human support throughout the process
  • Keep control of daily work and performance
  • Build or scale a Philippines-based team
  • Transition suitable contractors into employment

SOS supports more than 1,000 employees across 250+ clients, including more than 30 Australian accounting and financial-services firms.

The best way to assess fit is to review the role, employment arrangement, expected costs and support requirements before proceeding.

21. Is a refundable security deposit required?

Yes. Under the standard EOR agreement, a security deposit is required for each employee before the employment contract is signed and again each year. Each deposit equals one month of the employee’s base salary. If salary increases, the deposit is adjusted to reflect the employee’s current base salary. It may be applied to lawful termination or redundancy liabilities, and any remaining balance is returned after outstanding employment costs, invoices and obligations are settled.

22. When must payroll be funded?

Payroll must be funded in advance. Global BPO Solution issues a payroll-funding invoice, and the client must provide cleared funds within the timetable in the service agreement and before employee salaries are released. Under the standard agreement, cleared funds are due within eight calendar days of the invoice date. Late funding may delay or suspend payroll processing, so buyers should confirm payroll cut-offs, approval responsibilities and bank-transfer timing before the first pay cycle.

23. Is there a minimum term or notice period?

The standard EOR agreement operates on a rolling month-to-month basis and may generally be ended with at least 30 days’ prior written notice. Ending the service does not automatically terminate an employee. Any employee transfer, direct hire or offboarding must still follow the agreement and applicable Philippine employment requirements, and outstanding employment costs and invoices remain payable.

24. Can we employ the worker directly later?

Yes. During the EOR agreement, directly employing or engaging an assigned employee requires the legal employer’s prior written consent. After the agreement ends or expires, the client may directly employ or engage the employee without an SOS transfer fee or penalty, provided all outstanding invoices, costs and obligations are paid and the transition follows applicable termination, transfer and rehire requirements.

25. How is 13th-month pay handled?

13th-month pay is an employee cost separate from the US$190 management fee. For covered employees, it is generally calculated as at least one-twelfth of the basic salary earned during the calendar year, subject to the applicable rules and the employee’s circumstances. Global BPO Solution calculates and administers the payment through payroll. See Presidential Decree No. 851 for the governing requirement.

Key takeaway

An EOR can help an international company hire dedicated employees in the Philippines without immediately establishing its own local entity.

For SOS, the fixed EOR management fee is US$190 per employee per month. Recruitment and candidate selection are included, with no separate recruitment fee, onboarding fee, FX markup or standard SOS provider termination fee. Employee costs, advance payroll funding, the refundable security deposit and applicable final employment liabilities remain separate.

Salary, statutory contributions, 13th-month pay, benefits, allowances, equipment and other employee-specific costs remain separate where applicable.

Speak with a Philippines EOR specialist

Planning to hire in the Philippines, transition contractors or compare employment models? Speak with a Philippines EOR specialist.

SOS can help you review the role, expected employee-specific costs, hiring timeline and EOR support model. This FAQ provides general information and is not legal or tax advice; obtain advice for your specific structure, activities and workforce arrangements.

October 5, 2026
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