Choosing between an employer of record and your own local entity turns on who absorbs the next rule change, not on what registration costs. An EOR holds the statutory employment obligations on its balance sheet. An entity moves them permanently onto yours, in a country whose rules you do not read. Outstaffer publishes USD $250 per employee per month for Employer of Record, so one side of the comparison is a number you can look up.
The other side is not. That is the whole argument.
Australia moved its own super rules under every employer this year
From 1 July 2026 Australian employers stopped paying superannuation quarterly. The Fair Work Ombudsman states that contributions must now reach the employee's nominated fund within 7 business days of each payday, against a previous obligation to pay at least every three months. The rate sits at 12 percent for 2026-27, and the maximum contribution base is now annual, at $270,830.
All of that happened in your own country. Your accountant flagged it, your payroll software shipped an update, and the ATO still ran a transitional year to 30 June 2027 because it expected employers to need one.
Now price the same event landing in Manila while you are asleep.
What setting up your own entity actually costs is the part nobody publishes
Start with the side you can see. At USD $250 per employee per month an EOR runs USD $3,000 per head per year, with no platform, onboarding or setup fees. Team Up Now, the only other Australian provider publishing a flat rate, lists A$300 per employee per month. Both are linear. Ten people cost five times what two cost.
An entity is the opposite shape. Registration, a resident director, statutory filings, a payroll provider and an accountant are broadly fixed whatever your headcount, so the break-even is one division. Take your annual fixed compliance cost, call it X, and divide it by 3,000. At an X of USD $30,000 you need ten people on the ground before the entity is cheaper. At two, you are weighing roughly USD $6,000 a year against a five-figure fixed cost, before anyone prices what an offshore hire really costs once every line is added up.
Is it better to use an EOR or set up a Philippine entity for two staff?
No. The fee is smaller than the fixed cost you would take on, and the fixed cost is the one that grows without asking your permission.
Can we transition from using an EOR to our own legal entity later?
Yes, and doing it in that order is the point. Prove the roles work, then buy the infrastructure once headcount justifies it.
The strongest case for building your own entity, stated properly
Past the break-even the entity wins outright, and it buys things a monthly fee never will: a local balance sheet, the ability to hold contracts and intellectual property in-country, and no per-head charge climbing with every hire. Plenty of Australian businesses have run offshore entities for years without incident. If you are heading for thirty people in one country and you intend to stay, build it.
What that case does not survive is uncertainty about the rules themselves. As at 7 September 2026 the ATO's advice under development register still listed SGR 2026/D1, its draft ruling on superannuation guarantee for work arranged by intermediaries, as unfinalised, with comments closed on 31 July 2026 and completion to be advised. Our own regulator is still deciding how super works when a worker is engaged through someone else, the same question underneath the five-question test we published for Australian founders.
Related reading
- Payroll tax on offshore employees in Australia
- The hidden cost of getting your first offshore hire wrong
Where I would land on this
Under ten heads in a country, take the fee and spend the saved attention on the hires. Over thirty, build. In between, decide it on one question: which party would you rather was holding the obligation the week a rule changes. Outstaffer sells the EOR side of this, so weigh the argument accordingly, and get advice on your own circumstances before acting on any of it. If you want the fee side of employer of record vs setting up your own entity as a published number rather than a quote, it is on our pricing page.
So what is your X, and have you worked it out?
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