The Insider’s Guide to Offshore Hiring — Q4 2026

The national labour market has loosened steadily since its 2022 peak, but it has not turned slack. For a small business owner, the picture that matters is narrower than the headlines: hiring is still harder for small firms and for skilled roles, wages are rising faster than output, and every local hire now carries a bigger fixed cost than it did two years ago.

More candidates and fewer vacancies, but demand is still well above 2019

Trend unemployment was 4.6% in September 2026 (4.7% seasonally adjusted), up from about 3.5% in September 2022.^10,11 Employment is still growing: trend employment rose 1.4% over the year to 14.83 million people, and it is about 1.14 million (8.3%) higher than four years earlier.¹¹ The Reserve Bank still described the market as “a little tight” in August, with unemployment below its estimate of full employment.⁴

Vacancies tell a similar story. There were 325,000 job vacancies in August 2026, 31.2% below the May 2022 peak but still 43% above February 2020.^12,13 Online job ads were 212,400 in August, up 4.8% over the year and about 25% above the 2019 monthly average.^14,15 Clerical and administrative ads went the other way, falling 2.5% over the year.¹⁵ Vacancies in professional, scientific and technical services fell from 38,400 in May 2025 to 29,500 in August 2026 (original series).¹²

Business surveys point to softer hiring ahead. NAB’s September 2026 survey recorded its employment index at “its lowest level in five years”, with business confidence at −13.¹⁶

Small businesses and skilled roles carry the hiring pain

The government’s Recruitment Experiences and Outlook Survey (REOS), which covers employers with five or more staff, shows recruitment difficulty falling from a peak of 75% in July 2022 to 45% in August 2026. That August figure was up 5 points on a year earlier and the highest since March 2026.^17,1 The gap between small and larger firms has persisted the whole way down. In August 2026, 50% of firms with 5–19 staff reported difficulty, against 39% of firms with 20 or more staff, and 40% of small firms still had a vacancy unfilled after a month, against 32% of larger firms.¹

Skill level matters too. More than half of employers recruiting for higher-skilled occupations reported difficulty (55%), against about a third of those hiring for lower-skilled roles (34%).^17,1 The government’s vacancy fill rate fell to 68.2% in the March 2026 survey, after hovering around 70% through 2025, and the government noted that “recruitment conditions weakened across both metropolitan and regional Australia”.¹⁸

Small businesses dominate the economy, so this gap is not a niche issue. Of the 996,203 Australian businesses with staff at 30 June 2026, 922,512 (92.6%) had 1–19 people.¹⁹ The Australian Small Business and Family Enterprise Ombudsman reports that only 3% of surviving self-employed businesses took on staff in 2023-24, the lowest rate since records began in 2007-08. It points to “challenges accessing suitably qualified staff” and “increasing and more complex employer responsibilities”.²⁰ In a separate submission, the Ombudsman cites COSBOA’s 2025 survey, in which 43% of small businesses said they had trouble finding suitable staff.²¹

Two caveats apply. The REOS does not survey businesses with fewer than five staff, so there is no government hiring-difficulty figure for micro businesses. And the REOS asks whether hiring was difficult, not why, so it cannot separate a thin candidate pool from a candidate pool the business cannot afford.

The shortage list says admin is not scarce, and that changes the argument

Jobs and Skills Australia’s 2025 Occupation Shortage List, the latest edition as at 19 October 2026, found 29% of occupations in national shortage, down from 33% in 2024 and a 36% peak in 2023.²² Shortages are concentrated in trades (almost one in two occupations) and some professions (39%). “No occupations in the Clerical and Administrative Workers, Sales Workers, or Labourers occupational major groups were in persistent shortage.”²² By our count of the 2025 list, only 2 of 65 clerical and administrative occupations are rated in national shortage: Conveyancer and Clinical Coder.⁹

For the roles service businesses most often hire, the national rating is “no shortage”: bookkeeper, accounts clerk, payroll clerk, law clerk, legal secretary, credit or loans officer, finance broker, general and management accountant, marketing specialist, software engineer, receptionist, personal assistant, office manager and general clerk. The professional roles that are in national shortage include taxation accountant, external auditor, solicitor, conveyancer, software tester and several cyber security occupations.⁹ Jobs and Skills Australia has also observed that clerical and administrative roles have more applicants than they need, suggesting some applicants would be better matched to other work.¹⁸

This matters for how you think about offshore hiring. If you are hiring a bookkeeper, a loan processor or an executive assistant, the government data says you can probably find one locally. The reasons to look offshore are different: what that person costs, how long a small firm takes to land a good one, and how much talent you can buy for the same budget. The rest of this guide makes that case on those terms.

Wages are rising faster than output

The Wage Price Index rose 3.2% over the year to the June quarter 2026, down from its 4.3% peak in December 2023 but well above the 2.3% recorded in June 2019.²³ Average full-time ordinary earnings reached $2,083.70 a week in May 2026 (about $108,350 a year), up 3.7%.²⁴

The minimum floor moved faster. The Fair Work Commission’s 2026 Annual Wage Review lifted modern award minimum wages by 4.75% from 1 July 2026, and a structural adjustment for the lowest-paid classifications took the National Minimum Wage to $1,004.90 a week ($26.44 an hour), about 6.0% above the previous $948.^2,3 About 21.1% of all employees are paid at an award minimum, and administrative and support services is one of the four most award-reliant sectors. Small businesses (1–19 staff) are over-represented: 30.5% of award-reliant employees work in them, against 24.0% of all employees.^2,25 The Reserve Bank has heard from firms that the decision is also feeding into pay talks for staff who are not on awards.⁴

Output has not kept pace. Non-farm labour productivity grew just 0.1% over the year to the March quarter 2026, and the RBA notes its level “is slightly lower than it was prior to the pandemic”. Unit labour costs grew 3.3% over the same year.⁴ The Fair Work Commission put it bluntly: “over the last five years, there has been no overall growth in productivity”.²⁵ Business owners feel it. Wage costs were again the top issue weighing on confidence in NAB’s June quarter 2026 survey, and about three-quarters of firms (76.1%) still named labour as a significant constraint on output.²⁶

When wages rise about 3% a year and output per worker does not, each local hire costs more for the same work every year. That is the structural pressure behind the interest in offshore hiring, and it does not depend on a shortage.

Remote work is already normal in Australian offices

In August 2025, 36% of employed Australians usually worked from home, up from 32.1% in August 2019, and the figure has been stable since 2023. Among managers and professionals it was 59%.²⁷ Most Australian service businesses already manage people they do not see every day. That does not prove offshore staff will fit every business, but it removes the biggest practical barrier: you already have the habits and tools to manage remote work.

An advertised salary is the smallest number in a hiring decision. Below is a line-by-line model for a full-time back-office role on an $80,000 base salary in NSW for the 2026-27 financial year. We chose $80,000 because it sits inside the range of official and advertised medians for the roles our readers hire most. Official ABS data (via Jobs and Skills Australia, May 2025) puts median full-time earnings at $72,800 for bookkeepers, $74,984 for accounting clerks, $83,512 for payroll clerks, $93,912 for credit and loans officers and $95,264 for personal assistants.²⁸ SEEK’s October 2026 advertised medians are $82,500 for bookkeepers, $87,500 for payroll officers, $80,000 for paralegals and marketing coordinators, and $100,310 for executive assistants.²⁹ Wages have grown about 3.2% since the ABS survey date.²³

A few notes on the lines. Super is 12% in 2026-27 and is legislated to stay there, but from 1 July 2026 it must be paid with every pay run and reach the fund within seven business days (Payday Super). The ATO’s free Small Business Superannuation Clearing House closed on 30 June 2026, so small employers who relied on it now need a paid payroll or clearing product.^30,37 Payroll tax only applies once total Australian wages pass the state threshold, which ranges from $1.0 million in Victoria and Western Australia to $2.5 million in the Northern Territory. Most firms with fewer than about 10–15 staff on salaries like these pay none.³⁶ Workers’ compensation is shown at the NSW scheme average; clerical and professional office rates are usually lower, so treat this line as conservative.³² Office space assumes prime CBD rent; suburban or B-grade space costs less, and this line excludes outgoings, fit-out and utilities.³⁴ We have not included equipment or software, because we found no authoritative Australian benchmark for them.

Our same model for Victoria (1.8% WorkCover average, 4.85% payroll tax above $1 million, Melbourne CBD rent) comes to about $103,100 below the payroll tax threshold and about $107,500 above it (1.29 to 1.34 times salary), mostly because Melbourne desks are cheaper.

The hidden costs: paid days off, slow hiring and the wrong hire

Leave and public holidays are already inside the salary, but they change what each working day costs. A full-timer gets four weeks of annual leave, ten days of personal and carer’s leave and, in NSW in 2026, about nine weekday public holidays.³⁸ That is about 39 paid non-working days out of roughly 260, so each productive day costs about 18% more than the daily base rate. (This assumes personal leave is fully used; many people use less.)

Finding the person is a cost in itself. No government body publishes Australian recruitment fees, time-to-hire or bad-hire costs, so the figures below are commercial and indicative. Agency placement fees are commonly quoted at 15–25% of first-year salary ($12,000–$20,000 on an $80,000 role).³⁹ In a Robert Half poll, more than half of Australian employers said they take five weeks or more to fill a permanent role.⁴⁰ Add a typical notice period of two to four weeks and a role is often empty for two months or more. SEEK-commissioned research with more than 950 small businesses (February 2026) put the measurable cost of a wrong hire at $19,215, or 21% of salary, and found that wrong hires lasted 11–14 months against close to three years for the right ones.⁴¹

Exit costs are lower for small firms than many owners assume. Businesses with fewer than 15 employees generally do not have to pay National Employment Standards redundancy pay, though notice of one to five weeks still applies.⁴²

Three years of one local hire

Holding salary flat for comparison with Section 4, three years of the $80,000 hire costs about $294,800 in statutory and award on-costs plus a one-off 17.5% recruitment fee ($93,602 × 3 + $14,000). With a Sydney CBD desk it is about $327,400, and above the payroll tax threshold about $342,000.

The Philippines is the most common destination for Australian offshore hiring, and the data explains why. It combines scale, strong English, a mature services industry and a time zone that lets staff work an Australian business day in daylight hours.

A large labour market with spare capacity

The Philippine labour force was 52.56 million in August 2026 (preliminary). Unemployment was 5.3% (2.77 million people), up from 3.9% a year earlier, and underemployment was 11.9%, meaning about 5.9 million people with jobs wanted more work.^5,6 Together that is roughly 8.7 million people either looking for work or wanting more of it. Higher education output has also grown: the chair of the Commission on Higher Education reported graduates rising from 277,000 in 2020-21 to 805,000 in 2023-24, although the starting year was depressed by the pandemic.⁴³

The country’s IT and business process management (IT-BPM) industry earned about US$40.3 billion in 2025 and has about 1.9 million workers, growing faster than the global industry.^44,45 That industry has trained a large pool of people in Western business processes, software and client communication. It is also under pressure. In July 2026 the industry body, IBPAP, cut its 2028 revenue outlook to US$43.3–50.5 billion (from an earlier US$59 billion target), citing AI’s effect on some entry-level work, slower buyer decisions and new competitor countries.⁴⁵ Section 6 explains what that means for the roles you hire.

More than 250 major Australian companies already operate in the Philippines, with more than 41,000 Filipino staff across business process outsourcing, banking, telecommunications, energy and other sectors. Australia’s two-way trade with the Philippines was A$10.8 billion in 2025, and the two countries have been strategic partners since September 2023.⁴⁶

English is an official language, and it shows

English is one of two official languages under the Philippine Constitution.⁴⁷ The Philippines ranks 28th of 123 countries in the EF English Proficiency Index 2025, with a score of 569 (global average 488), in the “High” band and second in Asia after Malaysia.⁷ The index is based on people who took EF’s test, not a random sample, and the Philippine speaking sub-score (539) is lower than writing (603), so a spoken-English interview remains worth doing for client-facing roles.⁷ In Australia, 97.6% of the 293,892 Philippines-born residents counted in the 2021 Census spoke only English or spoke it well or very well.⁴⁸ More than 400,000 Australians have Filipino heritage, the fifth-largest migrant community.⁴⁶

A working day that overlaps yours

Manila is on UTC+8 with no daylight saving, so it is 2 hours behind Sydney in winter and 3 hours behind during daylight saving (4 October 2026 to 4 April 2027).⁴⁹ A Sydney 9-to-5 day is 6am to 2pm or 7am to 3pm in Manila. Your hire works daytime hours, not the night shifts common in US-facing call centres. No other major offshore market combines that overlap with a comparable level of English.

Sources: EF EPI 2025;⁷ standard UTC offsets against Sydney daylight saving dates.⁴⁹

South Africa has stronger English scores but works an eight-to-nine-hour gap. India has a far larger technology industry but lower English scores and a wider time gap. Latin American markets are built for US hours.

Infrastructure: good internet, but plan for power

Ookla’s August 2026 index puts median Philippine fixed broadband at 114 Mbps down and 105 Mbps up (62nd globally), close to the global median of about 130 Mbps.⁵⁰ That is ample for cloud accounting, practice management software and video calls.

Power is the weaker link in 2026. The Philippine Government declared a national energy emergency on 24 March 2026, tied to the Middle East conflict, and temporarily let economic-zone businesses move up to 90% of staff to work from home.⁵¹ Philstar reported red alerts and rotating brownouts on the Luzon grid on 12–14 May 2026, and the Daily Tribune reported red alerts on the Visayas and Mindanao grids in early September.⁵² Section 5 covers how to plan for this.

What Filipino professionals are paid

The salary figures in this guide are Philippine market salaries from JobStreet PH, based on pay disclosed in Philippine job ads (October 2026). They are not recruiter rates or fully loaded costs. Pesos are converted at the Reserve Bank’s 16 October 2026 rate of A$1 = ₱43.78.⁵³

Sources: JobStreet PH role salary pages, October 2026;⁸ ABS median full-time weekly earnings, May 2025, via Jobs and Skills Australia, annualised;²⁸ SEEK advertised salaries, October 2026.²⁹ The Australian column is context only: roles and seniority do not map exactly.

For scale, Metro Manila’s minimum wage for non-agricultural workers rose to ₱755 a day on 26 September 2026, about ₱16,400 or A$375 a month on a five-day week.⁵⁴ Experienced specialists earn more than these bands: JobStreet’s location averages for certified public accountants run from about ₱45,000 to ₱76,500 a month.⁸

Throughout this guide we model an offshore hire on A$1,000 a month (about ₱43,800). That is at the top of JobStreet’s October 2026 band for software developers and above the bands for accountants and executive assistants. In other words, it assumes you pay at the top of the local market to attract and keep good people. We also show A$1,500 a month for senior or specialist hires.

Statutory costs if the person is an employee

If a Filipino worker is legally an employee, the employer must pay a 13th-month salary (one-twelfth of basic annual salary, due by 24 December) under Presidential Decree 851.⁵⁵ The employer also pays social contributions: SSS at 10% of the monthly salary credit (capped at a ₱35,000 credit), PhilHealth at 2.5% of salary and Pag-IBIG at 2% of up to ₱10,000.⁵⁶ At ₱30,000 a month these add about ₱6,480 a month, or about 21.6% on top of salary. At our A$1,000 benchmark they add about A$194 a month. A genuine independent contractor is not an employee, so these are not legal requirements; Section 5 covers choosing the engagement structure.

What Filipino professionals want

The best large survey is dated but clear. In BCG and The Network’s “Decoding Global Talent” survey of more than 15,000 Filipinos (circa 2020-21, published by JobStreet), 49% said they would prefer a career working remotely for a foreign country, and Australia was among the top destinations.⁵⁷ We found no rigorous 2025-26 survey comparing Filipino workers’ preference for direct remote roles over BPO jobs, and we have left out the many unsourced vendor statistics on this topic.

There is no government statistic on how many Australian small businesses use offshore staff. The most recent Australian data is a vendor survey: in ConnectOS’s September 2026 survey of 214 organisations already using or considering offshore staff (98% headquartered in Australia), 62% already had offshore arrangements and the Philippines was the most common destination (36%), ahead of India (26%).⁵⁸ Because the sample only includes firms already interested, it is not a measure of how common offshoring is.

Whichever country you choose, there are four ways to hire, and providers price them in different units. The fair way to compare them is the total cost of one person over three years, which is what the table below does.

1. 1

   Freelance marketplaces (do it yourself)

   You post the job, screen applicants, hire and pay the person yourself. OnlineJobs.ph charges a subscription (Pro US$69 a month; you can cancel after hiring) and adds no salary markup.⁵⁹ Upwork charges clients a marketplace fee of up to 7.99% on every payment, plus a contract initiation fee of up to US$14.99.⁶⁰ It is the cheapest model. It is also the one where all the sourcing, vetting and admin sit with you.

2. 2

   Managed offshore staffing (a monthly per-seat fee)

   A provider recruits the person, is their legal employer, runs payroll and HR, and usually supplies a workstation or office. You direct the work and pay a monthly fee on top of salary for as long as the person works for you. Staff Domain, for example, publishes A$1,099 per person per month plus A$1,200 per hire, with no lock-in and 60 days’ notice.⁶¹ Its role pages list what the all-inclusive monthly price covers, including Philippine statutory benefits, 13th-month pay, HMO health cover, a workstation with backup internet, ISO 27001 certified facilities, HR and payroll administration, and a client success manager.⁶² Several large providers (Cloudstaff, MicroSourcing, Outsourced.ph and Remote Staff) do not publish dollar prices and quote on request.⁶³

3. 3

   Employer of record (EOR)

   An EOR becomes the legal employer in the Philippines, handles contracts, payroll, contributions and tax, and charges a monthly fee. It does not find or vet the person for you. Deel and Remote list EOR from US$599 per employee per month, Oyster US$699 and Multiplier from US$459 (billed annually).⁶⁴

4. 4

   Direct hire through a one-time-fee recruiter

   A recruiter sources, screens and shortlists candidates. You choose, and then you hire and pay the person directly, with no ongoing fee. Tarino charges $5,000 excluding GST: $250 upfront to start the search and $4,750 when you hire, with no monthly fees or markup and six months of replacement cover.⁶⁵

Three-year cost of one offshore hire

Assumptions: salary held flat for 36 months; prices exclude GST; US dollar prices converted at the RBA’s 16 October 2026 rate (A$1 = US$0.6947);⁵³ where the person is an employee (managed and EOR rows), Philippine statutory costs are added at about A$194 a month on a A$1,000 salary (SSS, PhilHealth, Pag-IBIG and 13th month); in the direct-hire and marketplace rows the person is engaged as an independent contractor. Excluded from every row: payment and FX fees, equipment, refundable deposits, and your own time.

Arithmetic for the A$1,000 column: salary 36 × A$1,000 = A$36,000. Statutory costs 36 × A$193.53 = A$6,967. Tarino: 36,000 + 5,000. Staff Domain: 36,000 + 36 × 1,099 + 1,200 + 6,967. Deel: 36,000 + 36 × A$862.2 + 6,967. Prices from the providers’ published pages, checked 19 October 2026.^{61,64,59,60,65}

What the numbers mean

Every offshore model is far cheaper than a local hire. Even the most expensive option in the table, a managed seat with statutory costs, costs about 72% less over three years than the $80,000 local hire. Direct hire costs about 86% less. The Australian and Philippine roles are not identical in every respect (an offshore hire will need training in Australian-specific rules and software), but the gap is large enough to absorb that.

Among models that include professional recruitment, direct hire costs least. At A$1,000 a month, direct hire is about A$42,700 cheaper than a managed seat and about A$33,000 cheaper than a US$599 EOR that does not even include recruiting. The difference is almost entirely the monthly fee: A$39,564 over three years at Staff Domain’s published rate against a single A$5,000 fee. Managed providers do provide things for that fee: an office or workstation, backup internet, health cover, HR and payroll, and the provider acts as the legal employer. That is real value for some firms, and we come back to it in Section 7.

Direct hire costs slightly more than doing it yourself, and buys a lot for the difference. The A$5,000 fee is about A$2,100 more than Upwork’s fees over three years and about A$4,700 more than an OnlineJobs.ph subscription. What it buys is someone else’s sourcing, screening, assessments and interviews, plus a replacement search if it does not work out in the first six months. For an owner whose own time is the scarce resource, that is the cheapest insurance in the table.

A sensitivity worth knowing: if a direct hire leaves after the six-month replacement window and you rehire through the same recruiter, add another A$5,000 (A$46,000 at A$1,000 a month).

Who controls the relationship

Cost is only half the comparison. The other half is who the person really works for. With direct hire and DIY, you are the contracting party: you choose the person, set their pay, decide on raises and control the exit, and there is no provider margin on their pay and no buyout fee if you want to keep them. In managed and EOR models, the provider is the legal employer. That brings payroll, HR and compliance support, but the relationship runs through the provider’s contract,. Every model’s marketing claims better loyalty. No independent study compares retention across them.

A successful offshore hire starts with clear agreements, appropriate systems and a well-managed working relationship. The considerations below can help businesses establish a sound arrangement from the outset. This section provides general information; requirements will depend on your circumstances.

Choosing the engagement structure

Offshore hires are commonly engaged under an independent contractor agreement (ICA), or through an employer of record (EOR) or managed provider that acts as the legal employer in the Philippines. Under Philippine law, whether someone is a contractor or an employee depends on the actual working relationship as well as the agreement. Courts apply a four-fold test: who selects and engages the worker, who pays, who can dismiss, and who controls how the work is done. If a worker’s status is challenged, the business needs to show that the relationship is one of independent contracting (Mendaros v Lazada, 2024).⁶⁶

In practice, that means choosing a structure that suits the role and making sure day-to-day working practices match it. An ICA can suit a full-time role when the agreement and the working arrangements are set up consistently, for example around agreed services, deliverables and availability. Review both as the role develops, and handle any exit with notice and a fair process. An EOR is another option, for example if you would prefer a Philippine legal employer to run payroll, contributions and HR. The right choice depends on the role and your circumstances, and a Philippine labour lawyer can review your agreement at the start.

13th-month pay and other benefits

For employees in the Philippines, 13th-month pay is a legal entitlement under Presidential Decree 851, alongside employer contributions to SSS, PhilHealth and Pag-IBIG (see Section 3).⁵⁵ These are not legal requirements for a genuine independent contractor. Some businesses choose to pay a 13th month as an optional benefit, which adds one month’s pay a year (A$1,000 on a A$1,000 monthly rate).

Australian employment law: where the agreement is formed

Engagement structure and contract formation also matter on the Australian side. Under section 35 of the Fair Work Act, an offshore employee of an Australian employer is outside the Act only if they were both engaged outside Australia and engaged to work outside Australia, and where a contract is formed depends on where the acceptance is received. In Sanderson v Brightest Australia Pty Ltd [2026] FWC 1633, the Commission found that a New Zealand-based employee’s contract was formed in Victoria, which gave them access to unfair dismissal remedies.⁶⁷

Seek advice on the engagement structure and on how and where the agreement is formed, and keep the agreement consistent with how the relationship works in practice.

Intellectual property

Under the Philippine Intellectual Property Code, when a work is commissioned, the person who commissioned it owns the work, but copyright stays with the creator unless there is a written agreement saying otherwise.⁶⁸

Whichever model you use, include a written IP assignment and confidentiality clause from day one. Where an EOR or managed provider is the legal employer, make sure your contract with the provider passes IP rights on to you.

Privacy and data security

If your business is covered by the Privacy Act, you remain accountable when offshore staff access personal information. Under APP 8 and section 16C, a breach by an overseas recipient is treated as your breach.⁶⁹ Since December 2024, APP 11.3 has made clear that reasonable security steps include “technical and organisational measures”.⁷⁰ Businesses with annual turnover of $3 million or less are generally exempt, but health service providers are covered whatever their size. That matters for allied health practices.⁷¹ The Philippine Data Privacy Act can also apply to data about Philippine residents.⁷²

The same setup works across hiring models: access through a managed cloud desktop or virtual desktop, multi-factor authentication, least-privilege access and no client data stored on personal devices, with confidentiality and data-handling terms in the agreement. Most businesses can set this up with tools they already pay for.

Power and internet reliability

The 2026 energy emergency and grid alerts described in Section 3 make power the most practical item to plan for this year.^51,52 Internet speeds are adequate for office work.⁵⁰

Make backup power (a UPS or generator access) and a second internet connection (such as a 5G mobile plan) part of the role, and check them at interview. Agree in advance what happens during an outage: which tasks can wait, and who covers urgent client work.

Tax: mostly simple for GST-registered businesses

For most Australian service businesses, paying an offshore worker is straightforward. The ATO’s foreign-resident withholding rules apply to entertainment and sports, construction and casino junket payments, not to ordinary offshore services.⁷³ Super guarantee does not apply to “non-resident employees who work outside Australia”.⁷⁴ A GST-registered business that imports services generally should not be charged GST and only has to account for reverse-charge GST if it could not claim a full credit.⁷⁵ Payments are deductible like other business expenses if they relate to earning your income and you keep records.⁷⁶ On the Philippine side, a professional firm has noted that a worker’s home used continuously for a foreign business could in some cases create a taxable presence, so check this with an adviser if your hire will negotiate or sign contracts on your behalf.⁷⁷

Retention

The most-quoted Philippine attrition figures come from contact centres: a 2022 industry survey found 31% voluntary and 45% total annual attrition in the BPO industry, down from 60–70% before 2016.⁷⁸ These figures describe large call-centre floors, not a dedicated hire working day shifts for one Australian business, and no independent study measures attrition for direct hires. What the evidence and common sense support is to pay at the top of the market, give the person a real role with daylight hours, and use the replacement cover window to fix a poor fit early. Tarino reports that more than 95% of its placements are still in the role at six months (Tarino’s own figure).⁷⁹

Setting up well

Most of the setup above happens once, at the start: an agreement that fits the role, an IP and confidentiality clause, secure access and an outage plan. With clear agreements, appropriate safeguards and ongoing management of the working relationship, an offshore hire can be set up on a sound footing and reviewed as the role grows.

AI is the other honest caveat in this guide. Jobs and Skills Australia’s 2025 study found that generative AI is more likely to augment work than replace it, but that “the higher potential for automation is concentrated in routine clerical and administrative roles”. About 4% of the workforce is in occupations with high automation exposure and 79% in low-exposure occupations.⁸⁰ In its long-run modelling, the occupations that lose the most employment by 2050 relative to the base case include general clerks, receptionists, and accounting clerks and bookkeepers.⁸⁰ The World Economic Forum’s 2025 survey of more than 1,000 large employers lists administrative assistants among the fastest-declining roles.⁸¹ Jobs and Skills Australia also linked some business, finance and ICT occupations dropping off the shortage list in 2025 to faster adoption of digital and AI tools.²²

The Philippine industry is responding. IBPAP’s revised roadmap targets “2 million AI-enabled digital Filipino workers” and says success will increasingly be measured by “the value every Digital Filipino Worker creates” rather than headcount.^45,82

For a small business, the implication is practical. Offshoring a role that is mostly data entry is a short-term saving on work AI will increasingly absorb. Offshoring a role that combines process, judgment and client contact is a long-term gain, and AI makes that person more productive. A bookkeeper who reviews coding exceptions and prepares the BAS file is more valuable than one who keys receipts. A loan processor who chases documents, checks serviceability inputs and keeps clients informed is more valuable than one who re-types forms. Most Australian small businesses are early in this shift: MYOB reported in 2024 that 80% had yet to adopt AI.⁸⁰

This also favours the direct-hire model. If AI makes each offshore hire more productive, a fixed monthly per-seat fee pays for less and less of the value created, while a one-time fee stays fixed. That is our inference, not a measured result. It also means screening matters more: test candidates on the tools and judgment calls in your actual workflow, not only on typing speed and English.

Offshore hiring is a strong option for the right roles

The evidence supports hiring offshore for Australian service businesses, for reasons that hold even in a softer labour market. The first is cost: a local $80,000 hire costs $93,600 a year before office or recruiter costs, and more each year as wages outpace productivity, while a Filipino professional paid at the top of the local market costs about A$12,000 a year. The second is small-business hiring difficulty: firms with 5–19 staff report more difficulty and longer vacancies than larger firms. The third is talent quality for the budget: the same money buys an experienced, well-paid professional from a deep, English-speaking pool rather than the cheapest local applicant. The fourth is hours and ties: a two-to-three-hour time difference, daytime working hours and long commercial and community links with Australia.

Offshore is not the right answer for every role. Keep work in Australia when it must be done in person, when a licence or registration attaches to the person doing it, or when the role is mostly routine keying that AI or better software will soon handle. And if your problem is a shortage-list occupation such as taxation accountant or solicitor, note that the shortage is in licensed, locally regulated work. Offshore support can free your Australian professional’s time, but it does not replace them.

Direct hire with a one-time fee is the best model for most SMBs

For a service business hiring one to ten people, direct hire through a one-time-fee recruiter gives the best combination of cost, control and quality. It has the lowest three-year cost of any model that includes professional recruitment: about A$41,000 per hire at A$1,000 a month, against A$74,000–A$84,000 for a global EOR or a managed seat. The relationship is yours: you choose the person, you hire and pay them directly and you set their pay, with no ongoing margin and no buyout fee. The structure is flexible: many roles run well on a well-drafted independent contractor agreement, and an EOR can be added where it suits the role. And quality and early-exit risk sit with the recruiter, through sourcing, vetting and a replacement search if it does not work out, which is exactly what the do-it-yourself route lacks.

To be fair to the alternatives, a managed provider is a reasonable choice if you need a secure, certified office environment, want the provider to handle equipment, HR and payroll entirely, or are building a large team quickly. An EOR alone suits businesses that already know exactly who they want to hire. A marketplace suits owners who have the time and experience to recruit and screen themselves. For most small service businesses, none of those trade-offs is worth the extra A$33,000 to A$45,000 per hire over three years.

Why Tarino

Here is what Tarino offers, using Tarino’s own figures:^65,79

The retention and funnel figures are Tarino’s internal data, not independently audited. Ask about them on your call, and ask for the salary benchmark for your role.

Practical checklist

1. Pick the role. Choose work that can be done remotely, is documented (or can be), and mixes process with judgment. Write down the five outcomes the person will own.
2. Apply the AI test. If most of the role is routine keying, automate or streamline it first and hire for what remains.
3. Set the salary. Benchmark against the Philippine market and pay at the top of the band for the experience you want. Decide whether to offer a 13th-month payment (a legal entitlement for employees, optional for contractors).
4. Choose the structure. Pick an engagement structure that suits the role, such as an independent contractor agreement or an EOR, and make sure day-to-day practice matches it.
5. Get the paperwork right. Written IP assignment, confidentiality and data-handling terms, notice and exit process. Get advice on the engagement structure and on where the agreement is formed (Fair Work Act section 35).
6. Secure the access. A cloud or virtual desktop, multi-factor authentication, least-privilege access, no client data on personal devices. Check your Privacy Act position, especially if you are a health service provider.
7. Plan for outages. Require backup power and a second internet connection, and agree an outage protocol.
8. Sort payments and tax. Pay monthly through a reputable transfer service and keep records. Give overseas platforms your ABN and GST registration so you are not charged GST.
9. Onboard properly. A 30-60-90 day plan, a daily overlap window, a weekly check-in and outcome-based KPIs. Train on Australian-specific rules and software.
10. Use the cover window. Review fit at 30, 60 and 90 days, well inside the six-month replacement period.

Next step

If you have a role in mind, the fastest way to test this guide against your business is a conversation. Book a 30-minute call at tarino.au/book. We will benchmark the salary for your role, walk you through the structure that fits it, and tell you honestly if the role is better kept in Australia.