Employer of Record
Employer of Record Services for Australian Businesses
Employ skilled staff in the Philippines without setting up a company there.
Under an Employer of Record arrangement, Digitek Operations Inc., our Philippine company, is the legal employer of the person who works for you. We hold the employment contract, run payroll in Philippine pesos, pay the statutory contributions and manage the local employment obligations. You direct the work, set the priorities and treat that person as part of your team.
Most Australian businesses wanting one or two people in the Philippines are choosing between two poor options. They can engage someone as a contractor and carry the risk that Philippine authorities later treat them as the employer, or they can register a company in the Philippines and build a payroll function to support two staff. An Employer of Record is the practical middle path.
What is an Employer of Record?
An Employer of Record is a company that legally employs staff on your behalf in a country where your business has no legal entity. The Employer of Record holds the employment contract and takes responsibility for payroll, tax and statutory benefits, while you manage what that person actually does each day.
The arrangement exists because employing one or two people in another country is disproportionately expensive to do yourself. Registering a company, opening a local bank account, appointing local officers and running a compliant payroll are much the same amount of work for two staff as for fifty.
For Digitek, the country is the Philippines. The roles are usually administrative, technical or industry specialist positions supporting an Australian business, and the people we place are employed on full local contracts rather than engaged as freelancers.
The compliance questions come up most often with our healthcare and NDIS, insurance and accounting and bookkeeping clients, where the person is handling records that carry obligations of their own.
When an Employer of Record makes sense
This model suits your business if
- You want one or a small number of people in the Philippines rather than a large offshore team.
- You want that person employed properly, with a contract, leave and statutory benefits, rather than paid as a contractor through a transfer service.
- You have the capacity to manage someone day to day, or you already manage remote staff.
- You want the employment obligations, the payroll and the local compliance to sit with someone else.
- You are not in a position to register and maintain a company in the Philippines.
It is the wrong choice if
- You want Digitek to manage the person's work as well as their employment. Managed VA Solutions is the better fit.
- You already have an entity in the Philippines, or your accountant has recommended you set one up.
- The work is genuinely short term or project based, though it is worth taking advice on how that would be classified.
- You have no capacity to train or supervise anyone at all. An offshore hire of any kind will struggle, and we would rather tell you that before you commit.
What Digitek handles as the Employer of Record
Digitek Operations Inc. takes on the employer side of the relationship. That covers the following.
- A written employment contract that meets Philippine labour law, prepared for the specific role.
- Payroll in Philippine pesos, paid on the local pay cycle.
- Employer contributions to SSS, PhilHealth and Pag-IBIG, calculated and remitted on time.
- 13th month pay, which is a legal requirement in the Philippines rather than a bonus.
- Statutory leave and public holiday entitlements, and the record keeping behind them.
- Withholding tax and the associated reporting to the Bureau of Internal Revenue.
- Onboarding paperwork, government registrations for new starters and ongoing employment records.
- Changes to the arrangement over time, including variations, extensions and, if it comes to it, a lawful termination.
Digitek Operations Inc. is a registered Philippine company and a registered employer, not a payment agent passing money through to a freelancer.
Who you contract with, and who employs your staff member
There are two agreements in this arrangement, and it is worth being clear about which is which.
Your service agreement is with Digitek Outsourcing, here in Australia. It sets out the role, the cost, the terms and what we are responsible for. If something goes wrong, you are dealing with an Australian business under Australian law, not chasing an invoice overseas.
Your staff member’s employment contract is with Digitek Operations Inc., our Philippine company. They are employed locally, under Philippine law, by a company that exists in the country they live in.
This matters more than it sounds. A lot of arrangements that call themselves Employer of Record are a payment platform in one country moving money to a freelancer in another, with no real employer at either end. Here, both ends are real companies. You have an Australian business to hold to account, and your staff member has a genuine local employer who pays their contributions and stands behind their contract.
What stays with you
This is the part most providers gloss over, and it is the part that decides whether the arrangement works.
You remain responsible for the work itself. That means allocating tasks, setting priorities and deadlines, training the person on your systems and your way of doing things, giving feedback, and managing performance. You decide which candidate to hire, and you decide when the arrangement should end.
You also control access. Your systems, your logins, your client data and your permissions stay in your hands, which is where they should be. We can talk you through how other clients structure that, and where secure remote access is a genuine requirement we can introduce you to Digitek IT, our sister technology company, who quote that separately.
Being direct about this matters. An Employer of Record removes the employment burden. It does not remove the management responsibility, and any provider who tells you otherwise is selling you something they cannot deliver.
How Employer of Record fits with our other two services
Digitek offers three ways to add offshore capacity. They stack rather than compete, and each one adds a layer to the one before it.
Direct VA Recruitment. We write the job description, advertise the role and screen the candidates. You make the final choice, then you employ that person, pay them and manage them. The employment obligations are yours.
Employer of Record. All of the above, and then we become the legal employer. We hold the contract, run payroll, pay the statutory contributions and carry the local compliance. You manage the work.
Managed VA Solutions. All of the above, and then we take on the people side of managing them as well. That means performance reviews and regular check ins, handling problems when they come up, communication training, productivity monitoring and reporting, and helping you work out what to delegate next and when a second hire makes sense.
| Direct VA Recruitment | Employer of Record | Managed VA Solutions | |
|---|---|---|---|
| Finding and screening the candidate | Digitek | Digitek | Digitek |
| The final hiring decision | You | You | You |
| The legal employer | You, or your contractor arrangement | Digitek | Digitek |
| Payroll, statutory benefits and 13th month pay | You | Digitek | Digitek |
| Local employment compliance | You | Digitek | Digitek |
| Allocating the work day to day | You | You | You |
| Training them on your systems | You | You | You |
| Performance reviews and regular check ins | You | You | Digitek |
| Handling problems, absence and replacement | You | You | Digitek |
| Communication training for your staff member | You | You | Digitek |
| Productivity monitoring and reporting | You | You | Digitek |
| Planning your second and third hire | You | You | Digitek |
| Fee | One off recruitment fee | Monthly Employer of Record fee | The Employer of Record fee plus a management fee |
Two rows are worth reading carefully.
Allocating the work stays with you in all three. No provider can decide what your business needs done this week, and we would rather say so than let you find out three months in. What Managed VA Solutions adds is the management of the person, not the direction of the work.
The fee row is deliberately transparent. Managed VA Solutions is the Employer of Record fee plus a management fee, shown as two separate numbers rather than one bundled figure. You can see exactly what the management layer costs and decide whether you want it.
Because Managed VA Solutions is built on top of Employer of Record rather than beside it, you can move between the two at any point, in either direction. Your staff member’s contract, pay and entitlements do not change when you do. Plenty of clients start with the management layer while they find their feet and drop it once they are comfortable, and plenty go the other way.
Not sure which one fits? Talk to us and we will tell you honestly, including when the answer is Direct VA Recruitment, the cheaper option.
Already have someone in the Philippines?
Not everyone comes to us before they hire. A lot of Australian businesses have already found someone good, usually through a freelancing platform or a referral, and are paying them by international transfer with no employment contract, no statutory benefits and no clear answer to the question of who actually employs them.
If that sounds like your situation, we can take over as the legal employer of the person you already have. They keep doing the same job for you. What changes is that they get a proper Philippine employment contract, their statutory contributions and 13th month pay, and you stop carrying a misclassification risk that gets larger the longer the arrangement runs.
It is worth doing before there is a problem rather than after. A working relationship that has run for two years on informal terms is harder to regularise than one that has run for two months, and the exposure grows with the length of it.
We do not put conditions on this. There is no minimum salary and no minimum engagement from our side. One thing to check at your end: if you are currently going through another agency rather than paying the person directly, your agreement with that agency may have terms about moving staff across. Have a look at it before you talk to us, or send it over and we will read it with you.
What employing someone in the Philippines actually involves
Australian owners are often surprised by how much sits on top of a Philippine salary. Here is what an employer pays, so you can see what the arrangement covers.
| Cost | What it is | 2026 rate |
|---|---|---|
| SSS | Social security | 15% of the monthly salary credit, 10% employer and 5% employee. Salary credit capped at PHP 35,000, plus a small employer paid Employees' Compensation contribution |
| PhilHealth | National health insurance | 5% of monthly basic salary, split evenly. Income floor PHP 10,000, ceiling PHP 100,000 |
| Pag-IBIG | Housing development fund | 2% each side, capped at PHP 200 each per month once earnings reach PHP 10,000 |
| 13th month pay | A legal entitlement, not a bonus | One twelfth of basic salary earned in the calendar year, paid on or before 24 December |
| Leave | Statutory minimum | Five days of service incentive leave after one year of service |
Two of these catch people out.
13th month pay is not discretionary. It comes from Presidential Decree 851, as amended, and it needs to be in your budget from the first month rather than found in December.
Five days of leave is the floor, not the going rate. Competitive employers offer considerably more, and offering the minimum makes it harder to keep someone good once they are trained. We build the leave entitlement into the package when we scope the role, and we will tell you what it is before you commit to anything.
Probation runs to a maximum of six months, after which an employee becomes regular and the grounds for ending the employment narrow considerably.
Taken together, the statutory loading adds between 15 and 25 per cent on top of base salary before any provider fee, and most full time roles land near 20 per cent. The percentage is higher on lower salaries, because the SSS and Pag-IBIG caps bite sooner.
Figures current as at September 2026. Rates and thresholds change, and this is general information rather than legal, tax or employment advice. Your own accountant or adviser should confirm how any arrangement applies to your business.
Two risks worth understanding
Being treated as the real employer. Philippine law looks at the substance of an arrangement rather than the label on the contract. Where someone works set hours, uses your systems and answers to you, the fact that their invoice says contractor carries very little weight. If the relationship is found to be employment, the entitlements, statutory contributions and back pay that should have been paid all along become payable, and they are owed by whoever is found to be the employer. Engaging someone through a company that genuinely employs them, in their own country, is what puts that question beyond doubt.
Creating a taxable presence. If your Australian company employs people in the Philippines directly, or has staff there with authority to enter contracts on your behalf, you can create a permanent establishment and a Philippine corporate tax liability. Because the Employer of Record is the local employer, that exposure sits with them rather than with you. This is one of the main reasons businesses choose the model, and it is a question worth raising with your accountant early.
Again, general information rather than advice. Both points depend on the specifics of your arrangement.
How it works
Consult
We talk through the role, the hours, the software and the industry experience you need, and we tell you whether an Employer of Record is the right structure or whether one of our other two services fits better.
Recruit
We write the job description, advertise the role, screen applicants and run first round interviews. Technical and specialist roles get a second round. You receive a shortlist and you make the final decision.
Onboard
We prepare the employment contract, complete the government registrations and set up payroll. You bring the person into your systems, your processes and your team.
Support
We run payroll, remit the contributions, keep the employment records current and handle anything that arises on the employment side. You manage the work.
Frequently asked questions
Who is the legal employer of my staff member?
Digitek Operations Inc., our Philippine company, is the legal employer under Philippine law, and the employment contract is between your staff member and that company. Your own agreement is separate and sits with Digitek Outsourcing in Australia, covering the role, the cost and the terms. Two agreements, two entities, both of them real companies.
Do I have to pay superannuation or withhold Australian tax?
Generally no. Superannuation guarantee and Australian PAYG withholding apply to work performed in Australia, and a Filipino national working in the Philippines under a Philippine employment contract sits outside both. Your own accountant should confirm this for your circumstances, because the answer can change if the person spends time working in Australia.
Does the Fair Work Act apply to my offshore staff member?
Generally no, for the same territorial reason. That said, your obligations under the Australian Privacy Principles can still apply to the personal information your staff member handles, particularly Australian Privacy Principle 8 on disclosure to overseas recipients. This is worth thinking about before you give anyone access to client records.
How is this different from hiring a contractor in the Philippines?
A contractor arrangement leaves you exposed if the relationship looks like employment in practice, which is a common finding when someone works set hours, uses your systems and reports to you. Under an Employer of Record, the person is properly employed, receives their statutory entitlements and the employment risk sits with us.
What does it cost?
Cost depends on the role, the salary it commands and the hours you need. There is a monthly Employer of Record fee on top of the staff member’s salary and the statutory on costs described above. If you later add Managed VA Solutions, the management fee sits on top of that as a separate line, so you can always see what each part costs. Tell us the role and we will give you a full figure you can compare properly against a local hire, with the salary, the statutory on costs and our fee shown separately so you can see where every dollar goes.
Can I start with Employer of Record and add management later?
Yes, and you can go the other way as well. Managed VA Solutions is Employer of Record plus a management layer, so moving between them is a change to your service agreement rather than a change to your staff member’s employment. Their contract, pay and entitlements stay exactly as they are.
Can you employ someone I have already found?
Yes, and we do not put conditions on it. If you are already working with someone in the Philippines and paying them informally, we can take over as the legal employer and put them on a proper contract without disrupting the work they do for you. The only thing to check is your own end, because if you are going through another agency their service agreement may restrict moving staff across.
Can I end the arrangement?
Yes. Ending an employment relationship in the Philippines has to follow local process, particularly once a staff member has passed probation and become regular, and we manage that side of it for you. We will set out the notice requirements and the grounds in your service agreement before you sign, so there are no surprises at the end of the arrangement.
Do you only place staff in the Philippines?
Yes. Our recruitment, our employment structure and our local knowledge are all built around the Philippines, and we would rather do one market properly than claim several.
Talk to us about employing staff in the Philippines
Tell us the role you have in mind and how many hours a week it needs. We will tell you what it would cost fully loaded, whether an Employer of Record is the right structure, and what you would need to have in place to manage the person well.