Pay
Loaded cost
Loaded cost is what you spend to keep one Philippine employee working for a year, counted in the same currency you budget in. It is basic pay plus the law plus the tools plus the fees plus the hours you actually.
Also called fully loaded cost, total employer cost
U.S. teams under-quote this because they import a U.S. mental model: salary plus a 20-30% benefits pad. Philippine load is lumpier. 13th month lands as 1/12. SSS uses a salary credit cap. Pag-IBIG caps early. Night hours add a 10% line that does not exist on a dayside seat. An EOR or Desk fee sits on top of all of that.
How it is measured
Write five lines, then add.
- Annual basic (monthly basic × 12).
- 13th month (about 1/12 of basic earned).
- Employer statutory cash (SSS on MSC including EC, PhilHealth employer share, Pag-IBIG employer share).
- Hour premiums you committed to (night differential, rest day, holiday, overtime) using the hours in the brief, not a hope.
- Commercial wrap: placement fee amortized over the first year, or monthly EOR/Desk fee, plus equipment stipend, software seats, and a replacement reserve if your guarantee is not free.
Convert to dollars at a rate you are willing to live with for 12 months. Put an FX cushion on it if you quoted the worker in dollars and pay in pesos.
Example: ₱60,000 basic, dayside PHT, EOR fee $400/month, $600 equipment in month one, no night hours. Annual basic ₱720,000. 13th month ₱60,000. Employer statutory roughly ₱60,000-₱70,000 depending on the year’s tables and the SSS cap. EOR fee $4,800. Equipment $600. Ignore FX and say ₱840,000 labor + $5,400 wrap. Quote that. Do not quote ₱60,000 as if it were the cost of the seat.
A Clock B seat with four night hours, 20 nights a month, adds Article 86 on those hours. That is a different loaded cost than Clock A. Same person. Different brief.
How it differs
Payroll savings versus a U.S. W-2 is a marketing comparison. Loaded cost is the number you can wire. Placement fee is a search cost. It belongs in year-one load and then drops. Statutory contributions are a subset. 13th month is a subset. If a vendor quote does not show the subsets, ask for the file.
Common errors
Comparing a U.S. fully loaded number to a Philippine basic. Booking 13th month only in December. Treating the EOR fee as a replacement for contributions. Forgetting that a dollar-denominated “$1,200/month VA” still needs a peso payroll and a 13th month on whatever basic you declared.