Do You Pay Super for Offshore Staff in Australia? (2026 Guide)

If you are weighing up a hire in the Philippines, the first question is usually a money question. Do you pay superannuation for offshore staff? Generally, no. As a rule, superannuation, PAYG withholding and Australian payroll tax do not apply to a worker who lives in the Philippines and is engaged there under a Philippine contract, because that person is not your employee under Australian law. That is the general position, and it is why hiring offshore staff in Australia legally can be so much cheaper than a local hire. It is not a blanket guarantee for every situation, though, and the way you structure the arrangement matters more than most people realise.

This guide walks through the Australian side (Fair Work, PAYG and the misclassification risk), the Philippine side (the statutory contributions and 13th month pay that make an arrangement compliant and fair), what the true cost of an offshore hire actually looks like, and how a direct-hire model keeps everything clean.

Why super and PAYG usually do not apply

Superannuation guarantee, PAYG withholding and state payroll tax are obligations that attach to Australian employees. When you engage someone who is a resident of the Philippines, works from the Philippines, and is hired under a local Philippine contract, they sit outside the Australian employment system. They are covered by Philippine labour law instead. In that scenario you are not running Australian payroll for that person, so the usual Australian on-costs do not sit on top of their salary.

That is the general position. Individual circumstances can change the picture, which is why the disclaimer above is not just boilerplate. A worker’s tax residency, the exact contracting structure, and how the relationship operates day to day can all affect where obligations land. This is a conversation to have with your accountant before you sign anything.

Is it legal to hire offshore staff in Australia?

Generally, yes. There is nothing unlawful about an Australian business engaging talent overseas. Many Australian firms do it, from sole traders to listed companies. The legal risk is not in hiring offshore. It is in dressing up an Australian employee as an offshore contractor to avoid obligations you actually owe.

Fair Work and the misclassification risk

This is the part that trips people up. You cannot take an existing Australian employee, relabel them as an offshore contractor, and expect the obligations to disappear. Regulators look at the substance of a relationship, not the label on the contract. This is the territory of sham contracting, and it carries real penalties.

What regulators actually look at

If you fully control how, when and where the work is done, set the person’s hours, supply all their equipment, and integrate them into your business exactly like a staff member, then calling them a contractor on paper will not hold up. The more the arrangement looks and behaves like employment, the more likely it is to be treated as employment, with all the obligations that follow.

How a properly structured arrangement avoids the problem

A compliant offshore arrangement is actually offshore. The person is a resident of the Philippines, working in the Philippines, engaged under a proper local contract or through a compliant local structure. They are paid in line with Philippine labour law, including the statutory contributions and entitlements set out below. Structured this way, the arrangement reflects reality rather than a workaround, and that is what keeps it clean under both Australian and Philippine rules. If you want the detail on doing this without an outsourcing middleman, we cover it in the compliant way to hire offshore talent in Australia without an outsourcing agency. As with this article, it is general information; have your own structure checked by an adviser.

The Philippine side: what compliant and fair looks like

Paying someone in the Philippines correctly is not just about a salary. Philippine law sets out employer-funded statutory contributions and a mandatory annual payment. A compliant arrangement covers all of them.

Statutory contributions the employer funds

Employers in the Philippines contribute to three government schemes on behalf of staff: SSS (the Social Security System, covering retirement, sickness and similar benefits), PhilHealth (national health insurance), and Pag-IBIG (the housing and savings fund). These are the Philippine equivalent of the on-costs an Australian employer carries, and they are a normal, expected part of hiring someone there.

Mandatory 13th month pay

Philippine law requires a 13th month payment for eligible employees: one-twelfth of the basic salary earned in the year, paid on or before 24 December. Our 13th month pay guide explains the calculation. It is not a discretionary bonus. It is a legal entitlement, and any honest cost estimate for an offshore hire has to include it.

What an offshore hire really costs

Because super and PAYG usually do not apply, people sometimes assume the base salary is the whole cost. It is not. The realistic all-in figure is roughly the base salary, plus the employer-funded statutory contributions (SSS, PhilHealth, Pag-IBIG), plus the 13th month pay, plus paid leave. Even with those added, the total typically lands well below the cost of an equivalent local Australian hire once you factor in Australian super and on-costs. Treat any specific dollar figure as indicative rather than precise, because it moves with role, seniority and the individual arrangement. For a fuller breakdown by role, see the Filipino staff cost guide or run your own numbers in the cost calculator.

It is also worth understanding what you might be paying if you go through an agency instead of hiring directly. Many managed arrangements bundle a monthly margin on top of the real cost, and that margin is often invisible on the invoice. We break the numbers down in offshore agency markups: what Australian businesses really pay.

Where the direct-hire model fits

Many providers sell a monthly managed service. You pay them, they pay the staff member, and a margin sits in between for as long as the person works for you. Tarino works differently. We recruit: we start with 1,000+ candidates per role and screen them through CV and quality screening, video screening, a practical assessment and a structured interview, then send you a shortlist of 3–4, typically within about 2 weeks. You choose, then you engage and pay the person directly, under whichever structure you and your adviser decide on. Tarino does not hire your staff, run payroll or give tax advice. There is one fee per hire, $5,000 excl. GST ($250 upfront, credited back when you hire, plus $4,750 on hire), and after that the relationship (and the money) is between you and your staff member. See pricing.

The practical upshot is that you get the cost benefit of an offshore hire without a permanent agency margin sitting on top, and you stay in control of how the arrangement is structured on the Philippine side. Each placement includes 6-month replacement cover for the same role, under the conditions in your Scope of Work. Handling data correctly matters here too, especially for professional services and regulated industries, and our Australian data privacy compliance checklist for businesses hiring offshore walks through what to put in place.

The short version

Generally, you do not pay superannuation, PAYG or payroll tax for a truly offshore worker in the Philippines, because they are not your Australian employee. The risk to manage is misclassification: do not relabel a local employee as an offshore contractor. Pay the person properly under Philippine law (SSS, PhilHealth, Pag-IBIG and 13th month pay where they apply), and confirm your own situation with a qualified adviser.

Talk it through before you hire

If you want to work out what an offshore hire would look like for your business, and what it would actually cost, we are happy to walk you through it. Book a 30-minute call with Tarino and we will map out the hiring side with you and share general guidance on how other clients set things up. No pitch, just the practical detail. For the tax and employment questions, bring in your own accountant or employment lawyer.