Hiring or outsourcing in the Philippines has become a go-to move for US companies looking to scale efficiently. The talent is strong, English proficiency is high, and labor costs remain competitive.
But once you move past the “we want to outsource” stage, the real questions start:
Can we do this legally?
How much does it actually cost?
And what’s the safest setup for a US company?
This guide breaks it down clearly, without the outsourcing fluff.
Can a US company legally hire employees in the Philippines?
Yes. But not directly, unless you set up a Philippine entity.
If you don’t want to register a local company (which most early-stage or scaling teams don’t), your legal options are:
- Employer of Record (EOR)
- Local employment partner
- Independent contractors (only for true freelancers)
For full-time, long-term roles, EOR is the most common and lowest-risk option.
What is an EOR in the Philippines?
An Employer of Record becomes the legal employer of your Philippine-based staff.
They handle:
- Locally compliant employment contracts
- Payroll and tax withholding
- Mandatory benefits (SSS, PhilHealth, Pag-IBIG)
- Labor law compliance and HR administration
You still manage the employee day-to-day (role, tasks, performance) just without the legal exposure.
This setup allows US companies to hire quickly without setting up a local entity.
How much does EOR Philippines cost?
A compliant EOR setup typically includes:
- Employee salary (market-based)
- Monthly EOR service fee (per employee)
There are no entity setup costs, no need for local accountants or lawyers, and no surprise compliance expenses later.
If a provider is advertising extremely low pricing but can’t clearly explain benefits, tax handling, or termination rules – that’s a risk, not a saving.
Common risks US companies underestimate
Problems usually don’t come from talent. They come from the setup.
We see issues when companies:
- Misclassify full-time roles as contractors
- Use non-compliant contracts
- Underpay statutory benefits
- Don’t understand termination obligations
These mistakes can lead to penalties, disputes, and reputational damage.
EOR right for your US company?
EOR works best if you:
- Want to outsource or hire quickly
- Don’t want entity admin
- Need full compliance
- Are building a long-term offshore team
If that sounds like you, EOR isn’t a shortcut — it’s the correct structure.
Ready to outsource in the Philippines?
If you’re considering an EOR setup and want clarity on cost, timing, and compliance, we can walk you through the safest approach for your team.
👉 Book a consultation to get your Philippine hiring setup right from day one.
