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PEO vs EOR in the Philippines: Which is Right for You? (2025 Guide)

Author: Martin English, Founder – Smart Outsourcing Solution (SOS)
Date Published: 6 October 2025
Date Updated: 7 October 2025

TL;DR — Quick Answer

Choose PEO only if you already have a Philippine entity and want co-employment where your company stays the legal employer while the provider runs HR, payroll, benefits, and compliance workflows. Choose EOR if you don’t have an entity and need to hire now—the provider becomes the legal employer on your behalf.
Single price anchor (orientation): PEO $99 / employee / month; EOR $190 / employee / month (SOS). This page is a decision guide. For detailed pricing and scopes, use Cross-Navigation below.

What This Page Is (And Is Not)

Is: A model chooser to help you decide between PEO and EOR quickly and correctly.
Not: A price comparison, vendor shortlisting, or operations playbook. Those live on separate pages to avoid overlap and cannibalization.

Decision — Which Model Fits Your Current Entity Status?

PEO vs EOR at a Glance

Feature PEO (Co-Employment) EOR (Employer of Record)
Local entity required Yes — your SEC/DTI + BIR registrations No
Legal employer Your company Provider
HR / Payroll / Benefits Managed by provider under your entity Managed by provider as legal employer
Compliance liability Shared under your entity Provider-led
Typical use case You’re incorporated; want standardized HR/payroll/compliance You’re not incorporated; need to hire quickly & compliantly
Typical setup time ~2 business days (with data ready) ~2 business days (with data ready)

 

What PEO Really Means (Philippines)

  • You remain the legal employer.

  • The provider operates HR administration, payroll, benefits, statutory remittances (SSS, PhilHealth, Pag-IBIG), and compliance workflows.

  • Why it matters: In PH, co-employment assumes a local entity—without one, PEO isn’t the right instrument.

 

What EOR Really Means

  • The provider is the legal employer for your hires in PH.

  • They sign compliant employment contracts, run payroll and remittances, and manage benefits and policies.

  • Why it matters: Ideal for fast market entry when you don’t (yet) have a PH entity.

 

Related But Different: Staff Leasing & HR Outsourcing

  • Staff leasing: seat/headcount supply; not employer-of-record for your company; limited compliance scope.

  • HR outsourcing: task execution (e.g., payroll processing) without co-employment or legal-employer status.

  • PEO/EOR: governed employment models with policy and compliance frameworks (different legal footing).

Migration Path: EOR → PEO

1. Hire now on EOR.

2.  Incorporate (SEC/DTI, BIR).

3. Transition: novate/rehire contracts, align payroll calendars, re-enroll benefits, and preserve evidence continuity (receipts, approvals, variance logs).

4. Steady-state on PEO with your entity as the legal employer.

 

FAQs — Deciding Between PEO and EOR

 

Q1: We don’t have a PH entity but want to hire this quarter—what’s correct?

EOR. The provider becomes legal employer, signs contracts, and runs payroll/remittances while you direct work. When you incorporate, you can switch to PEO.

Q2: We already incorporated—why not just hire directly?

You can. PEO centralizes calendars, approvals, benefits enrollment, and audit evidence, reducing variance and operational drag while your entity stays the legal employer.

Q3: Will switching from EOR to PEO disrupt payroll or benefits?

With a planned cutover (novations/rehire, aligned calendars, mapped benefits), teams typically hand off in a single cycle without losing tenure/credits where rules allow.

Q4: Does staff leasing equal PEO or EOR?

No. Staff leasing is agency supply; not employer-of-record. PEO and EOR are employment models with compliance scaffolding.

Q5: How do risk areas differ (IP, misclassification, PE risk)?

  • EOR: Provider is legal employer; contracts ensure IP assignment to your company.

  • PE risk: Depends on your business activity, authority, and permanence—not eliminated by EOR; requires tax/legal review.

  • PEO: Your entity is present; ensure contracts/policies align IP and confidentiality with local law.

Q6: How fast can we go live with SOS?

With documents and data ready, ~48 hours for either model is typical to set calendars, run a test payroll, and produce draft remittance artifacts.

Cross-Navigation

 

Why Choose SOS?

  • Clear guardrails so you pick the right model (entity vs no entity).

  • Evidence-first operations: period binders with remittance receipts, approvals, variance logs.

  • Fast onboarding (~48 hours) once documents and data are ready.

  • Transparent pricing at a flat rate of $99/month

 

Ready to Scale with the Cheapest PEO in the Philippines?

👉 Start with SOS PEO at $99 per employee/month (2-day setup).
 👉 Don’t have an entity? Switch to our EOR model at $190 flat.

[Get Started with SOS Today]

 

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