How Much Does Outsourcing Cost in the Philippines?

The complete cost is therefore: Employee salary + employee-specific costs + US$190 SOS EOR management fee

"Outsourcing" can refer to several different operating models, including Employer of Record, contractor engagement, offshore staffing, recruitment or agency services, business process outsourcing, managed services, and direct hiring through a local entity. Each model allocates responsibility and cost differently. This page explains the SOS EOR model first, then compares it with other common arrangements.

The fixed US$190 SOS EOR management fee covers local employment administration, including:

• Employment documentation and employee onboarding administration
• Payroll administration and employee records
• SSS, PhilHealth and Pag-IBIG statutory administration
• Leave administration and 13th-month pay administration
• Benefits administration under the agreed package
• HR support and employment-related coordination
• Offboarding administration
• Human support throughout the employment lifecycle

Under the SOS EOR structure, Global BPO Solution Philippines Inc. is the Philippine legal employer. Your company manages daily work, team priorities, task allocation, working schedules, systems and tools, workflows, training, performance expectations and business decisions. The EOR manages the local employment relationship and administration. It does not manage your company's day-to-day operations unless a separate service is agreed.

Yes. Recruitment and candidate sourcing are included in the SOS EOR service at no extra charge. SOS can support confirming the role requirements, candidate sourcing, interview coordination, employment preparation and onboarding coordination. Your company makes the final hiring decision. Other providers, agencies or outsourcing models may use different recruitment pricing. When comparing those models, confirm whether recruitment, candidate sourcing, replacements and assessments are included.

The following costs may remain separate because they relate to the employee's compensation or employment package. Salary. Agreed according to the role, experience, responsibilities, working hours and candidate profile. Employer statutory contributions. Calculated separately according to the employee's compensation and applicable Philippine requirements, including SSS, PhilHealth and Pag-IBIG. 13th-month pay. An employee-related cost, separate from the SOS EOR management fee, calculated as one-twelfth of basic salary earned during the calendar year under Presidential Decree No. 851. Benefits and allowances. May include HMO or health insurance, internet allowance, communication allowance, transport allowance, meal allowance, or other agreed benefits. Equipment and software. Laptops, software licences, connectivity, workspace requirements and other role-specific equipment may be separate where applicable. Final pay and employment entitlements. Statutory final pay, accrued benefits, severance, redundancy amounts and other legally required employment obligations remain separate where applicable. These costs are not hidden SOS provider fees. They are employee-specific or statutory employment costs and should be shown clearly in the employment cost breakdown. [Internal link needed: "cost of hiring finance and accounting staff in the Philippines" — no URL confirmed yet]

Under the standard SOS EOR pricing structure:

• No hidden SOS provider charges
• No FX markup
• No onboarding fee
• No separate recruitment fee
• No SOS provider termination or exit fee

A refundable employee-liability deposit equal to one month's base salary is required at commencement and annually, with salary-related adjustments. It secures potential termination or redundancy liabilities and is separate from the management fee. The standard arrangement has no minimum contract duration and no long-term lock-in. It may be ended with 30 days' written notice, subject to the agreement. Minimum headcount is one employee, there is no volume requirement. Employee-specific costs remain separate and should be disclosed in the quote and service documentation.

The fixed SOS management fee is calculated by multiplying the number of employees by US$190.

These figures cover the SOS EOR management fee only. Add separately: employee salaries, employer statutory contributions, 13th-month pay, benefits, allowances, equipment, the refundable employee-liability deposit, and other employee-specific costs.

Existing employees or previously selected candidates may be onboarded in 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, and payroll funding. If recruitment is required, the total hiring timeline depends on role requirements, candidate availability, seniority, interview timing, assessments, reference checks, offer acceptance, notice periods and required documents. The five-business-day timeline applies to an early onboarding scenario where the required information, documentation and funding are ready. Where the individual is already employed by another provider, the existing employment relationship must first be addressed. For more information, see how to hire in the Philippines without setting up a company.

A BPO arrangement may be suitable when you want a provider to manage a complete process. An EOR may be suitable when you want dedicated employees who work within your team and are managed by your company. If you are reviewing contractors, see converting contractors to employees in the Philippines. [Internal link needed: "contractor misclassification in the Philippines" — no URL confirmed yet]

Do not compare providers using the monthly management fee alone. Review employee salary, employer statutory contributions, 13th-month pay, benefits, HMO, allowances, equipment, software, recruitment, candidate selection, payroll administration, HR support, account management, FX treatment, onboarding, offboarding, final pay, replacement arrangements, notice requirements and third-party costs. Ask each provider to separate its management fee from employee-specific costs.

Prepare the following: role or roles, number of employees, seniority, expected salary, working hours, shift requirements, benefits, allowances, equipment requirements, candidate status, recruitment requirements, expected start date, whether this is an existing employee or new hire, and any contractor-transition requirements. The cost breakdown should show each item separately: salary, employer statutory contributions, 13th-month pay, benefits and allowances, equipment, the refundable employee-liability deposit, other employee-specific costs, and the US$190 SOS EOR management fee.

It may, but there is no single savings percentage that applies to every role or company. A complete comparison should consider local salary levels, employer costs, benefits, recruitment, office requirements, equipment, management time, payroll administration, compliance administration, working hours, team size and long-term operating plans. The decision should be based on the complete operating cost, not salary or provider fees alone.

An EOR may be suitable when your company needs dedicated employees in the Philippines, wants to hire without setting up a local entity, wants to retain control of daily work, is testing or expanding in the Philippines, needs local payroll administration, wants recruitment and candidate-sourcing support, is transitioning suitable contractors into employment, wants a fixed EOR management fee, or needs human support throughout the employment lifecycle. An EOR may not be the best model if you want a provider to manage an entire function and deliver an outcome. In that situation, a BPO or managed-service arrangement may be more appropriate.

Speak with a Philippines EOR specialist about salary planning, employee-specific costs, recruitment, onboarding and the fixed US$190 SOS EOR management fee. You will receive a clear view of the employment structure and costs before proceeding.

• EOR pricing in the Philippines
• Hiring in the Philippines without setting up a company
• Converting contractors to employees
• Contractor misclassification in the Philippines
• Finance and accounting hiring costs
• Offshore finance payroll and compliance
• Data security and employment compliance
• EOR for Australian financial services companies