The Complete Cost Breakdown of Employer of Record Services – No Surprises
Author: Martin English, CEO & Founding Partner
Updated: May 27, 2026
TL;DR
An Employer of Record cost is not just one monthly fee.
In the Philippines, the full cost of hiring through an EOR usually includes:
| Cost Component | What It Means |
| Employee salary | The worker’s agreed gross monthly pay |
| Employer statutory contributions | Employer-side payroll obligations such as SSS, PhilHealth, and Pag-IBIG |
| 13th-month pay accrual | Mandatory annual pay that should be accrued monthly |
| Benefits and allowances | HMO, equipment, internet, transport, or other agreed support |
| EOR service fee | The provider’s fee for employment, payroll, compliance, contracts, payslips, and support |
| One-off costs, if applicable | Onboarding, setup, offboarding, FX, or special processing fees depending on provider |
Smart Outsourcing Solution charges a flat US$190 per employee per month for its Philippines EOR service. Salary, statutory employer costs, 13th-month pay, optional benefits, and pass-through costs are separate.
For a full pricing overview, see EOR Pricing Philippines.
What Is an Employer of Record Cost Breakdown?
An Employer of Record cost breakdown shows every cost involved in hiring an employee through an EOR instead of setting up your own local entity.
A complete EOR cost breakdown should answer:
- What does the employee earn?
- What employer contributions are required?
- What mandatory pay or benefits apply?
- What does the EOR provider charge?
- Are there setup, onboarding, offboarding, FX, or add-on fees?
- What is the true monthly and annual cost?
This matters because many EOR quotes are presented as a single headline fee. That number is rarely the full employment cost.
The Simple EOR Cost Formula
Use this formula when estimating EOR costs in the Philippines:
| Formula |
| Total Monthly EOR Cost = Salary + Employer Statutory Costs + 13th-Month Accrual + Benefits / Allowances + EOR Service Fee + Pass-Through Costs |
For SOS, the EOR service fee is:
| SOS EOR Fee |
| US$190 per employee per month |
This fee is separate from the employee’s salary and required employer costs.
Full EOR Cost Breakdown
| Cost Layer | Paid To / Through | Recurring? | Included in SOS US$190 EOR Fee? |
| Employee salary | Employee | Monthly | No |
| Employer statutory contributions | Government/statutory agencies | Monthly | No |
| 13th-month pay | Employee | Accrued monthly, paid annually | No |
| Optional HMO | Provider / employee benefit | Monthly or annual | No |
| Equipment | Vendor or employee reimbursement | One-off or periodic | No |
| Allowances | Employee | Monthly | No |
| Payroll processing | EOR provider | Monthly | Yes |
| Payslips and payroll records | EOR provider | Monthly | Yes |
| Employment contract support | EOR provider | Setup and updates | Yes |
| Statutory administration | EOR provider | Monthly | Yes |
| Compliance support | EOR provider | Ongoing | Yes |
| Account support | EOR provider | Ongoing | Yes |
| FX or transfer costs | Bank/payment provider | Depends | Usually separate |
| Special offboarding or legal support | Provider / adviser | As needed | Depends on scope |
The key distinction is simple: salary and statutory employment costs are employee costs; the EOR fee is the service cost.
What Is Included in SOS EOR Pricing?
Smart Outsourcing Solution’s flat US$190 per employee per month EOR fee covers the employment and compliance service layer.
| Included in SOS EOR Fee | What It Covers |
| Legal employment support | Employing staff in the Philippines without setting up a local entity |
| Payroll processing | Payroll calculation, salary processing support, and payroll records |
| Payslips | Employee payslip preparation and documentation |
| Statutory administration | Support for SSS, PhilHealth, Pag-IBIG, withholding, and payroll compliance |
| Employment documentation | Locally compliant employment contracts and employment records |
| 13th-month handling | Accrual and processing support |
| Reporting | Payroll summaries and finance-ready records |
| Account support | Philippines-based EOR coordination |
The fee does not include salary, statutory employer contributions, 13th-month pay, optional benefits, allowances, equipment, or other pass-through employment costs.
What Is Not Included in the EOR Service Fee?
A transparent EOR quote should separate the provider fee from pass-through costs.
| Not Included in the EOR Fee | Why It Is Separate |
| Employee salary | This is the employee’s compensation |
| Employer statutory contributions | These are required employer-side obligations |
| 13th-month pay | This is mandatory employee compensation |
| HMO or private benefits | Depends on the package selected |
| Equipment | Depends on role and company policy |
| Internet or work-from-home allowance | Optional unless agreed |
| FX or bank charges | Depends on currency, transfer method, and provider setup |
| Special legal work | May require separate advice or processing |
| Immigration or visa support | Not standard for most local Philippine EOR hires |
| Offboarding outside normal scope | Depends on complexity and provider contract |
This is where many buyers get surprised. The EOR fee may look low or high, but the real question is what sits outside it.
Example Monthly Cost Breakdown
Here is a practical example for a Philippine remote hire.
| Cost Item | Example Amount / Treatment |
| Monthly salary | US$1,300 |
| Employer statutory contributions | Calculated based on applicable statutory rules |
| 13th-month pay accrual | Accrued monthly |
| Optional benefits | HMO or allowances if offered |
| SOS EOR fee | US$190/month |
| Estimated monthly total | Salary + statutory costs + 13th-month accrual + benefits + US$190 |
The monthly cost changes depending on salary, benefits, allowances, payroll timing, and statutory contribution requirements.
For a more detailed pricing model, see EOR Pricing Philippines.
Example Annual Cost Breakdown
| Cost Item | Annual Treatment |
| Salary | Monthly salary × 12 |
| 13th-month pay | Additional mandatory month of pay |
| Employer statutory contributions | Calculated across the employment year |
| Optional benefits | Based on selected benefits package |
| EOR service fee | US$190 × 12 = US$2,280 per employee/year |
| Other pass-through costs | Equipment, FX, allowances, or agreed add-ons |
For one employee, SOS’s EOR service layer is US$2,280 per year, excluding salary and pass-through employment costs.
EOR Pricing Models Compared
Different EOR providers price their services differently.
| Pricing Model | How It Works | Buyer Risk |
| Flat monthly fee | One fixed provider fee per employee per month | Clear and predictable if pass-through costs are transparent |
| Percentage of salary | Provider charges a percentage of employee salary | Higher salaries increase the provider fee |
| Tiered pricing | Fee changes based on headcount or package | Can be efficient at scale but harder to compare |
| Bundled pricing | Salary, benefits, provider margin, and service costs are combined | Harder to see the real provider fee |
| Custom quote | Provider prices each case individually | May be necessary for complex cases but less transparent |
For cost control, flat pricing is usually easier to forecast than percentage-based or bundled pricing.
SOS vs Global EOR Provider Fees
If your hiring need is focused on the Philippines, compare the provider fee separately from salary and statutory costs.
| Provider | Published / Stated EOR Fee | Best Fit | Pricing Note |
| Smart Outsourcing Solution | US$190 per employee/month | Philippines-focused hiring | Flat local EOR fee |
| Multiplier | From US$400/month | Multi-country hiring | Global EOR platform |
| Deel | From US$599 per employee/month | Global hiring across many countries | Global platform pricing |
| Remote | US$599 per employee/month | Global hiring across many countries | Global platform pricing |
Deel and Remote publish EOR pricing from or at US$599 per employee per month, while Multiplier publishes EOR pricing from US$400 per month.
For a Philippines-only hire, the question is not only “which EOR has the biggest global platform?” It is:
Which provider gives you compliant Philippine employment, reliable payroll, transparent pass-through costs, and the lowest practical total cost?
SOS is positioned for companies that want local Philippine EOR support with a clear US$190 per employee/monthservice fee.
What Typical EOR Fees Do and Do Not Tell You
A provider’s EOR fee tells you the cost of the service layer.
It does not automatically tell you:
- The employee’s salary
- Employer statutory contribution amounts
- Whether 13th-month pay is accrued correctly
- Whether benefits are included or separate
- Whether FX charges apply
- Whether onboarding or offboarding fees apply
- Whether support is local, regional, or global
- Whether the provider uses owned entities or third-party partners
When comparing EOR providers, ask for a line-item quote. Do not compare headline fees alone.
EOR Cost Checklist: What to Ask Before Signing
Before choosing an EOR provider, ask these questions:
| Question | Why It Matters |
| What is the monthly EOR service fee? | Identifies the provider’s actual charge |
| Is the fee flat or salary-based? | Shows whether costs rise with compensation |
| What statutory employer costs are billed separately? | Prevents payroll surprises |
| How is 13th-month pay handled? | Confirms mandatory pay is budgeted |
| Are HMO and benefits included? | Avoids benefit-cost confusion |
| Are there onboarding fees? | Identifies setup costs |
| Are there offboarding fees? | Prevents exit surprises |
| Are FX or transfer fees marked up? | Clarifies payment costs |
| Are payslips and reports included? | Confirms payroll documentation |
| Who handles local compliance questions? | Shows the support model |
| What happens if payroll data changes late? | Clarifies cut-off and adjustment rules |
| What is excluded from the quote? | Forces hidden costs into view |
A good EOR quote should make the total cost easy to understand before payroll starts.
No-Surprises EOR Quote Template
Ask every provider to show the cost like this:
| Line Item | Monthly Amount | Notes |
| Employee salary | Gross monthly salary | |
| Employer statutory contributions | Employer-side statutory costs | |
| 13th-month accrual | Mandatory annual pay accrued monthly | |
| Benefits / HMO | If applicable | |
| Allowances | If applicable | |
| Equipment | If applicable | |
| EOR service fee | Provider fee | |
| FX / transfer fees | If applicable | |
| One-off setup fees | If applicable | |
| Estimated monthly total | Sum of all monthly costs | |
| Estimated annual total | Monthly cost × 12 plus annual-only items |
If a provider cannot separate these line items, it becomes harder to compare them fairly.
When a Low EOR Fee Is Not Actually Cheap
A low headline EOR fee may still become expensive if the provider adds:
- Setup fees
- Offboarding fees
- FX markups
- Mandatory benefit bundles
- Unclear payroll adjustment charges
- Expensive compliance add-ons
- Support charges
- Minimum headcount commitments
- Long lock-in periods
- Percentage-based markups on salary
The cheapest EOR is not always the provider with the lowest headline price. It is the provider with the clearest total cost, reliable payroll, correct statutory handling, and no avoidable surprises.
Related guide: Cheapest EOR Provider in the Philippines
When a Higher EOR Fee May Be Worth It
A higher EOR fee can make sense if you need:
- Multi-country hiring through one platform
- Enterprise security requirements
- Complex immigration support
- Advanced HRIS integrations
- Country coverage outside the Philippines
- Global workforce reporting
- Large-scale international onboarding
But if you are hiring only in the Philippines, a local EOR provider may offer a lower provider fee and more focused local support.
How to Calculate Your EOR Budget
Use this process:
Step 1: Confirm the salary
Start with the employee’s gross monthly salary.
Step 2: Add employer statutory costs
Include employer-side statutory contributions and payroll obligations.
Step 3: Add 13th-month accrual
Budget for mandatory 13th-month pay throughout the year instead of treating it as a surprise annual expense.
Step 4: Add benefits and allowances
Include HMO, equipment, internet, transport, or other agreed benefits.
Step 5: Add the EOR service fee
For SOS, add US$190 per employee per month.
Step 6: Add pass-through and one-off costs
Check FX, onboarding, offboarding, and special processing fees.
Step 7: Compare annual cost
Compare the full annual cost, not just the monthly service fee.
Why Smart Outsourcing Solution?
Smart Outsourcing Solution is built for companies hiring employees in the Philippines without opening a local entity.
SOS is a strong fit if you want:
- Philippines-focused EOR support
- Transparent flat-fee pricing
- A clear separation between salary, statutory costs, and provider fees
- Local payroll and compliance handling
- Employment contracts, payslips, reporting, and statutory administration
- Support for remote teams, offshore hires, and contractor-to-employee transitions
The SOS EOR service fee is US$190 per employee per month, excluding salary, statutory employer costs, 13th-month pay, optional benefits, and pass-through costs.
FAQs
How much does an EOR cost in the Philippines?
EOR cost in the Philippines depends on the provider, employee salary, statutory employer costs, benefits, and service fee. Smart Outsourcing Solution charges a flat US$190 per employee per month for its Philippines EOR service. Salary, statutory employer contributions, 13th-month pay, and optional benefits are separate.
What are typical EOR fees in the Philippines?
Typical EOR fees vary by provider model. Some global platforms publish EOR fees from around US$400 to US$599 per employee per month. SOS charges US$190 per employee per month for Philippines EOR service.
What is included in Philippines EOR pricing?
EOR pricing usually includes legal employment support, payroll processing, employment contracts, payslips, statutory administration, compliance support, and account coordination. Salary, statutory contributions, benefits, and allowances are usually billed separately.
Is the EOR fee the same as total employment cost?
No. The EOR fee is only the provider’s service fee. Total employment cost includes salary, employer statutory contributions, 13th-month pay, benefits, allowances, pass-through costs, and the EOR fee.
Does SOS charge a percentage of salary?
SOS positions its EOR service fee as a flat US$190 per employee per month. This is separate from salary and statutory employer costs.
What hidden EOR costs should I watch for?
Watch for onboarding fees, offboarding fees, FX markups, mandatory benefit packages, payroll adjustment charges, minimum commitments, compliance add-ons, and unclear pass-through costs.
Is a global EOR provider better than a local Philippines EOR?
A global EOR may be better if you are hiring across many countries and need one international platform. A local Philippines EOR may be better if your hiring is focused on the Philippines and you want lower provider fees, local payroll knowledge, and clearer local support.
How do I compare EOR quotes fairly?
Compare salary, statutory employer costs, 13th-month accrual, benefits, allowances, FX costs, setup fees, offboarding fees, and the provider’s EOR service fee. Do not compare the headline EOR fee alone.
Does 13th-month pay need to be included in the cost breakdown?
Yes. In the Philippines, 13th-month pay should be included in your employment cost planning. Many employers accrue it monthly so the annual payment does not become a budget surprise.
Can SOS provide a full line-item estimate?
Yes. SOS can prepare a line-item estimate showing salary, statutory employer costs, 13th-month accrual, optional benefits, pass-through costs, and the US$190 monthly EOR service fee.
Get a No-Surprises EOR Cost Breakdown
Send us the role, salary, target start date, and benefits requirements.
We’ll help estimate:
- Monthly salary
- Employer statutory costs
- 13th-month accrual
- Benefits and allowances
- SOS EOR service fee
- Estimated monthly and annual total cost
Speak with a specialist and get a quote
View EOR Pricing Philippines
