What Your Offshore Agency Is Actually Charging You — And How to Work It Out

Most Australian businesses that use an offshore staffing agency have no idea what the person they've hired is actually being paid. They approve a budget, sign a contract, and every month the invoice arrives — but the salary line is nowhere to be found. That gap between what you pay and what your staff member earns is where agency profit lives. And for a team of three, it's often six figures a year.

How agency pricing actually works

Here's the model most offshore staffing agencies use. They hire the staff member directly — as an employee or contractor in the Philippines, India, or wherever — and pay them a local salary. Then they charge you, the Australian client, an "all-in monthly fee" or "service rate" that bundles everything together: the person's salary, equipment, employer contributions, HR administration, compliance, a "management fee", and their profit margin.

The typical multiplier sits somewhere between 1.5x and 2.5x the actual cost of the staff member. So if your offshore EA earns AUD $1,600 a month, the agency charges you $4,500. The difference — roughly $2,900 — is split between genuine overhead (equipment, HR, compliance, roughly $800–$1,000/month) and pure margin (roughly $1,200–$1,500/month).

The reason you don't know this? The salary line doesn't appear on your invoice. It's bundled into the fee. Agencies don't volunteer this information, and most contracts don't require them to disclose it. Opacity isn't accidental — it's the business model.

What the numbers actually look like

Here are three common offshore roles with realistic AUD figures, based on current market benchmarks.

How it adds up for a team of three

Say you have the EA, the developer, and the accountant above. Here's how the maths looks:

What you pay the agency per year: approximately AUD $228,000–$261,000

What the three staff members actually earn per year: approximately AUD $73,000–$95,000

Reasonable overhead for all three (equipment, HR, compliance, employer contributions): approximately AUD $36,000–$44,000

Agency profit extracted from your team of three, annually: approximately $70,000–$98,000

That's not a service fee. That's a recurring royalty on your own workforce.

Why agencies get away with it

The short answer: because clients don't ask, and contracts aren't written to encourage it. Most offshore staffing agreements are structured so the agency retains the employment relationship. That means they control the salary information. You're the client, not the employer — so technically, the staff member's pay is none of your business.

It also creates lock-in. By the time you realise the markup, you've invested months onboarding someone you don't technically employ and can't easily take direct without renegotiating.

Warning signs you're in this situation:

• Your agency won't tell you what the person you've hired earns

• Fee breakdowns show a single "service fee" line with no components

• You're discouraged from direct communication with your staff outside the agency's platform

• Your contract has no salary disclosure clause

• The fee increases annually but you see no evidence of the staff member's salary increasing

What direct hire actually looks like

Tarino works differently. Instead of employing your offshore staff and charging you an ongoing fee to access them, we find and place the right person — then step back. You employ (or directly engage) the person yourself. You see exactly what they earn. There's no ongoing monthly margin built into the arrangement.

Our fee is a one-time placement fee, paid when we successfully place someone. After that, the relationship is directly between you and your hire. It's the same model you'd use with any recruiter filling a local role — except we're placing people in the Philippines, India, and other offshore markets where we know the talent pool and the salary benchmarks.

The result: instead of paying an agency $4,500/month indefinitely for your EA, you pay a one-time placement fee and then pay your EA's actual salary directly — say, AUD $1,600–$2,000/month, depending on their experience and your arrangement. Year one, you're already ahead. Year two, the savings compound.

Work out what you're currently paying — right now

You don't need to wait for a new contract to find out if you're being overcharged. Try this:

Step 1: Ask your agency directly — "What is [person's name]'s base salary or total cost-to-company?"

Step 2: If they won't tell you, that's your answer.

Step 3: If they do provide it, use this formula:

Monthly markup = what you pay the agency – (staff member's salary + $1,000 overhead)

Annual markup = Monthly markup × 12

The $1,000/month overhead estimate covers equipment, HR administration, employer contributions, and compliance in a typical offshore setup. It's a reasonable allowance for genuine operating costs.

If your annual markup per person is above $12,000, you're paying agency margin — not agency value. If it's above $25,000, you're funding someone's business with your operating budget.

For a team of five offshore staff, even a conservative $15,000/year per person markup adds up to $75,000 annually. That's a salary. That's the salary of another person you could be hiring.

Ready to run the numbers on your setup?

If you want to work out what your current offshore arrangement is actually costing you — or find out what hiring offshore directly would look like — we're happy to walk you through it. No pitch, just the maths.

You can reach us at tarino.au. Bring your current monthly invoice and we'll help you work out exactly where the money is going.