Cost
FX cushion
FX cushion is a budget reserve so a dollar-quoted seat still funds the peso contract when the rate moves.
How it works
If you quote dollars and pay pesos, someone eats the move. Put 5-10% in the annual plan or rewrite the offer in pesos. Do not take it from the worker’s 13th month. For a U.S. company hiring one Filipino teammate, write this into the brief, the employment contract, and the peso payroll file before the start date. Slack habits do not override the Labor Code, BIR, or NPC. If the local employer of record holds the paper, they run the statutory step; you still owe a clean operating definition so the seat does not fail in week three. Put a number on the example when you budget loaded cost, because a nameless allowance always returns as a December surprise or a missed SLA.
Example: plan $20,000 loaded, cushion $1,500. Rate shock in June uses the cushion, not a surprise pay cut.
How it differs
USD vs PHP is the quote design. Loaded cost is the total. Payroll savings charts usually ignore this.
Common errors
Cutting NSD to ‘make FX work.’
In practice
Treat FX cushion as a week-one operating object. Put a peso or dollar figure on the next twelve months. If the word cannot survive that arithmetic, it is marketing. Write an owner - founder, local employer, or worker - and a date you will look at it again: first cutoff, first holiday, or first miss. If nobody can show a contract clause, a payslip line, a calendar block, or a checklist box, you do not have fx cushion yet. You have a conversation. Convert the conversation before the person starts, while changing the deal still costs a paragraph rather than a resignation. Re-read the worked example above against the actual hire in front of you. If the numbers in that example cannot be swapped for this seat’s pesos, hours, and start date, the brief is still unfinished.