The Total Cost to Hire an Offshore Developer in the Philippines
Most budgets start and end with the headline salary. That is a mistake. The real cost to hire an offshore developer in the Philippines includes benefits, equipment, recruitment and the risk of losing someone six months in. This guide breaks the numbers down so you can build a realistic budget.
Start with base salary, but treat it as indicative
Base salary is your anchor, not your total. Rates vary by seniority, stack, English fluency and whether the role is niche or common. A senior backend engineer costs more than a mid-level front-end developer, and demand shifts these figures over time.
Any salary number you read online is indicative and should be caveated. For a grounded view, see our Filipino software developer salary guide and our offshore developer rates guide. Use them as ranges, then confirm the real number for your role in a discovery call.
Add statutory benefits and mandatory bonuses
Employing someone in the Philippines means paying into government schemes. As the employer, you contribute to SSS (social security), PhilHealth (health insurance) and Pag-IBIG (the housing fund). These are shared between employer and employee, and the exact rates are set annually by the agencies, so treat them as a moving cost rather than a fixed percentage.
There is also 13th month pay. This is legally required under Presidential Decree 851. It is roughly one twelfth of the employee’s basic annual salary and must be paid on or before 24 December. For a fuller explanation, read our guide to 13th month pay. Budget for it from day one, because it is not optional.
Do not forget equipment and software
A developer needs tools. That usually means a laptop, a second monitor, a headset and a reliable internet setback or allowance. Then there are software licences: IDEs, cloud accounts, design tools, project management seats and security software.
These costs are easy to overlook because they feel like one-off purchases. They are not. Hardware needs replacing, and licences renew monthly or yearly. Fold them into your running budget.
Count the cost of finding the person
Recruitment is a real cost, whether you pay it in cash or in your own time. Sourcing, screening, technical assessment and interviews take weeks. If you run it yourself, that is time your team is not building product.
With Direct Sourcing, ITVA recruits and vets the candidate, you employ them directly, and you pay a one-time placement fee scaled to seniority. The exact fee is confirmed in a discovery call. Either way, factor recruitment into the total, not the margins.
Management overhead is a line item
Someone has to onboard, manage and support the new hire. That means time zone coordination, payroll administration, compliance filings and the general work of keeping an employee productive and paid correctly.
If you handle employment yourself, you also carry the compliance burden. Local labour law, contributions, filings and bonuses are your responsibility, and mistakes are expensive. This overhead rarely shows up in a spreadsheet, but it is a genuine cost.
Budget for attrition and replacement risk
People leave. When a developer resigns, you lose their salary investment, the onboarding time and the momentum on their work. Then you pay to recruit and train a replacement. Attrition is a cost even when nobody is thinking about it.
Good hiring and fair, compliant employment reduce this risk. Underpaying or mishandling benefits increases it. Build a small buffer into your budget so a single departure does not derail the plan.
A simple all-in cost breakdown
Here is how the components stack up. Figures are indicative and confirmed for your role in a discovery call.
| Cost component | What it covers | Who carries it |
|---|---|---|
| Base salary | Monthly pay for the role | Always you |
| Statutory benefits | SSS, PhilHealth, Pag-IBIG contributions | Employer |
| 13th month pay | Legally required bonus by 24 December | Employer |
| Equipment and software | Laptop, monitor, licences, tools | Employer |
| Recruitment | Sourcing, vetting, placement | You or ITVA |
| Management overhead | Onboarding, payroll, compliance | You or ITVA |
| Attrition risk | Replacement and lost momentum | Always you |
Do it yourself, or bundle it into one fee
If you employ directly, you carry every line above plus the compliance work. That gives you full control, and it suits teams with local knowledge and appetite for admin.
The alternative is a fixed monthly fee. With our All Inclusive Solution, ITVA recruits and employs the developer in the Philippines, and one fee covers the pay band, statutory benefits and required local bonuses. If you already have staff and only need compliant employment, our Employer of Record service does the same for people you have found yourself.
Bundling turns a scattered budget into a single, predictable line item. You still pay the true cost, but you stop managing seven separate ones.
The cleanest way to see your real numbers is to compare a self-managed build against a fixed fee. Start with our pricing overview and confirm the figures for your role in a discovery call.