Why most providers will not tell you this number, what is in ours, and how it compares with what the big EOR platforms charge for employment alone
By Andy Schachtel, CEO of Sourcefit | Global Talent and Elevated Outsourcing
Key Takeaways
- Offshore staffing providers charge for their service in one of four ways: a flat management fee on top of salary at cost, a percentage markup on salary, a bundled all-in rate with no breakdown, or a price per unit of output. The flat fee is the only one you can check line by line.
- Sourcefit’s management fee is $395 per employee per month for staff working from home and $495 for staff in our offices. It is the same in every country we operate in. Salary and statutory benefits are passed through at cost and itemized on every invoice.
- The fee covers the things a company would otherwise have to pay for itself to employ someone in the Philippines: recruitment, HR, equipment, IT support, network security, certifications, insurance, training and quality, licenses, legal and administrative costs, and for office-based staff, the office. We charge no setup, recruitment, workstation, exit or team transfer fees on top of it, and the team belongs to you.
- The fair comparison is fee against fee. A global Employer of Record platform charges $599 to $699 a month to be the legal employer and nothing else. Our $395 and $495 cover legal employment and the whole operation around the person.
If you ask an outsourcing provider what they charge on top of salary, you will usually get one of two answers. The first is that the fee is built into the rate, which means you cannot see it. The second is a change of subject to the all-in savings. I have been building offshore teams for 17 years and I understand both answers. Ours has always been a number. Our quotes and invoices show the management fee as its own line, separate from salary, so our clients have always known what it is. What we never did was put it on our website or talk about it in public, which in practice meant that only our clients knew it. I have come to think that does more harm than the number would, so in this article I am going to put our fee where anyone can see it and explain what it pays for.
The model I am describing is what we call staff augmentation. In the Philippines it is often called staff leasing, and a lot of buyers just say offshoring. The names all describe the same arrangement: you direct the day-to-day work of a dedicated person, and the provider employs that person, equips them, houses them and supports them.
What is a BPO management fee?
A management fee is the amount a provider charges each month, per employee, for everything other than the employee’s own pay. Salary, government contributions and benefits belong to the person. The fee is what the provider charges to run the operation around that person, and it includes the provider’s margin.
Providers express this in four different ways, and in my experience the method tells you more than the number does.
| Pricing method | How it works | What you can see | Who uses it |
|---|---|---|---|
| Flat fee plus salary at cost | A fixed monthly fee per employee. Salary and statutory costs are passed through and itemized | Everything: the person’s pay, the government contributions, and the fee | Sourcefit and some other operating companies |
| Percentage markup | The provider adds a percentage to salary, often 30 to 70 percent | The percentage, sometimes; the underlying salary, rarely | Many staffing agencies |
| Bundled rate | One monthly rate per seat with no breakdown | Nothing. The fee, the salary and the benefits are blended | Most traditional BPOs and fully managed providers |
| Output-based | A price per unit of work: per transaction, per ticket, per record processed | The unit price. Nothing about who does the work or what they earn | Fully managed providers, for defined, repetitive processes. Sourcefit offers it for the right kind of work |
The flat fee is the only method that lets you check that your team is being paid what you were told, that their government contributions are being remitted, and that a raise you approve reaches them in full. With a bundled rate, a $1,900 seat might contain a $600 salary or a $900 salary, and there is no way for you to know which one you bought.
Where output-based pricing fits
There is a growing view that pricing per unit of output is the future of outsourcing, because AI makes more and more work countable. For some work it is already here. When a process is simple, repetitive and easy to measure, a price per transaction, per claim or per ticket is fair to both sides, and it lets automation bring the cost down without anyone having to renegotiate headcount. We offer output-based pricing for that kind of work.
It does not fit nuanced roles. An accountant closing the books, a support agent dealing with an upset customer, a developer shipping a feature: none of these jobs break down into units you can count without changing what the job is. If you price them per unit, you will get the units and lose the judgment.
There is a second problem with output pricing that gets less attention. A unit price is the least transparent number in outsourcing. It has the people doing the work baked into it, along with the supervisors, the quality staff, the technology, the overhead and whatever margin the vendor can get away with, and you will never see how it was put together. The vendor also controls the process from end to end: who does the work, how many people, how they are trained, what tools they use, and what happens when AI takes over part of it. If that process is central to how your company operates, you have handed over something that was yours. For a commodity task, that is a reasonable trade. For a core process, I think it is a poor one.
For those roles you are paying for a person, and the honest way to price a person is salary at cost plus a fee you can see. That fee is what this article is about.
Why do BPOs keep the fee private?
The reason is a comparison that looks bad and is misleading. Put a $495 fee next to the $550 or $600 monthly salary of an entry-level customer service representative and it looks like a markup of 80 or 90 percent. Put the same fee next to a senior accountant earning $1,500 and it is about a third. Next to a software developer at $2,500 it is a fifth. The fee is flat because the costs behind it are flat. A seat, a computer, a help desk, an HR team and a set of certifications cost the same whether the person using them is junior or senior.
The right comparison is between the fee and what it replaces. A company that wants to employ that same customer service agent directly in the Philippines needs a legal entity or an Employer of Record, a recruiter, a laptop, someone to run payroll and HR, someone to answer an IT call at 3 a.m., insurance, and somewhere for the person to work. Every one of those is a cost somewhere. The management fee gathers them into one number.
So we are putting ours on the website. Our clients already see it as a separate line on their quotes and invoices. The only people an unpublished fee keeps in the dark are the prospects who are trying to compare us with someone else, and those are the people I would most like to have the full picture.
The engagement matrix: what each model costs and includes
The fee only makes sense when you see it inside the full range of ways a company can put someone to work offshore. Here is that range, from the lightest arrangement to the heaviest, with our own pricing where it applies. The competitor fees are taken from the providers’ own websites and were checked on September 30, 2026.
| Engagement model | Monthly fee per employee | Legal employer | What the fee covers | Who directs the work |
|---|---|---|---|---|
| Independent contractor | None; you carry the misclassification risk | Nobody | Nothing | You |
| Contractor support (Sourcefit) | From $90 | The contractor | Compliant contractor engagement, payments, documentation | You |
| Global EOR platform (Deel, Remote, Oyster, Papaya Global) | $599 to $699 | The platform or its local partner | Legal employment, payroll, compliance, HR software | You |
| Operating-company EOR (EORganic by Sourcefit) | $199 | Sourcefit | Legal employment, payroll, compliance, Knit HRIS, HR team on the ground | You |
| Staff augmentation, work from home (Sourcefit) | $395 | Sourcefit | EOR plus recruitment, equipment, 24/7 IT and secure network, training and quality, insurance, certifications, client success | You |
| Staff augmentation, office-based (Sourcefit) | $495 | Sourcefit | Everything above plus the office seat, office network, utilities and on-site support | You |
| Sightline (Sourcefit) | $395 or $495; per-unit billing available with the calculation shown | Sourcefit | Everything above plus workforce management behind a leader you choose | Your leader, with us behind them |
| Fully managed (SourceCX, SourceCycle) | Bundled per-seat rate, quoted | Sourcefit | Everything above plus the team lead, QA, reporting and the outcome | Sourcefit |
Salary and statutory benefits pass through at cost in every Sourcefit row. EORganic carries a refundable deposit equal to one month’s total fee, as most EOR services do; staff augmentation carries no deposit.
Sightline needs a word of explanation, because it sits between the two halves of the table. The structure is the same as staff augmentation, with the same $395 or $495 fee and the same itemized invoice, plus our workforce management and quality processes behind a leader you have chosen. If your work runs on countable units and you would rather be billed per unit, we can do that as well, and we show the calculation: this many people, at these salaries, with this fee, producing this volume, gives this unit price. The problem with output pricing is not the arithmetic. It is that most vendors will not show it to you.
If you read down the table, each step adds a layer of operation and takes a layer of work off your plate. The step that surprises most people is the one from the platform EOR row to our staff augmentation rows, because the platform charges more and does less. The reason is the cost base. A platform has to fund a global software company from its fee. We are an operating business that already runs offices, HR and IT for thousands of people, so adding one more employee to that costs less than you would expect.
What the $395 work-from-home fee covers
This is the list I would want to see from any provider before signing, so here is ours. Everything below is included in the fee. None of it is an add-on.
Employment, compliance and a real HR team. Legal employment through our own Philippine entity, payroll, government contributions and filings, statutory benefits administration, employment contracts and HR policies, and the legal, corporate, permit and administrative costs of running a registered company in the country. Behind all of that is an HR team on the ground, in the same city and the same time zone as your staff. They handle onboarding, leave, performance conversations, grievances and separations under Philippine labor law, and they are the people your employee can go to when something goes wrong at 2 p.m. Manila time. At a platform that request goes into a ticket queue. Here it goes to a person.
Recruitment. Sourcing, screening, testing and shortlisting. You interview the candidates and make the choice. There is no placement fee, and if someone leaves, replacement hiring is part of the service.
Equipment. An Intel Core i5 computer with dual monitors, a webcam and a noise-cancelling headset, provisioned, maintained, repaired and replaced by our own IT staff.
IT support and network infrastructure. A 24/7 help desk staffed by our own people. Home-based staff do not work on their own home network. We set up a virtual VPN for each person, route their traffic through Cloudflare, and manage and patch their computers remotely. The firewalls, the security tooling, the endpoint management and the firmware and software licenses behind all of that are ours to carry, and those licenses are expensive and come up for renewal every year.
Security and certifications. ISO 27001:2022 and ISO 27701 certification held directly by Sourcefit, PCI DSS validation, SOC 2 reporting, HIPAA business associate agreements where they are needed, and GDPR-aligned data handling. The audits, the controls and the people who maintain them are covered by the fee.
Insurance. General liability, employer liability, cyber liability and professional liability coverage.
People development and retention. Continuing education and upskilling programs, plus the things that keep people with us for years: community outreach, social programs, and the practices behind our Great Place to Work certification. Attrition is the cost that never shows up on a cheap quote, and this is where we spend money to keep it down.
Training, quality and operational success. A training and quality team is part of the standard fee, not something reserved for managed services. That means onboarding curricula, train-the-trainer programs so your process is taught the way you would teach it, quality monitoring, and coaching when the numbers slip. Alongside them, an account team works with you to set KPIs and then runs a regular cadence of performance reviews. Knit, our workforce platform, gives you attendance, scheduling, performance and engagement data on your team in real time.
Transparency and terms. Itemized invoices that show salary, contributions and the fee as separate lines. No long lock-in, and a clear notice period.
No other fees. This is where a lot of quotes grow after the contract is signed, so I want to be exact. We charge no setup fee, no recruitment or placement fee, no workstation or seat fee, no equipment fee, no deposit, no onboarding charge and no exit charge. We also charge no transfer penalty. The team is yours. If you decide to bring them in house, move them to your own entity or take them with you, they go with you, and there is no buyout fee and no conversion charge. Several providers write a per-head penalty into the contract for exactly that situation. There are only three things that can appear on one of our invoices beyond salary, statutory costs and the management fee: a computer upgrade above our standard package, which we bill at cost; specialized software your process requires, which is normally licensed by you; and overtime, which only happens after you have approved it.
Industry participation. Membership in the industry bodies and standards organizations that keep us current on labor law, data protection and compliance.
What the extra $100 for an office seat covers
Office-based staff cost $495 because a seat is a physical thing with real bills attached to it. The secure network described above comes with both fees. What the office adds is the physical layer.
The office itself. Fitted-out space in Manila, Cebu and Pampanga, with security, facilities management and the amenities that make people want to come in to work.
Office network. Redundant internet connections, enterprise firewalls and switches on the floor, and the firmware support and licenses that go with them, on top of the secure network every Sourcefit employee already works inside.
Utilities and running costs. Power, cooling, internet, cleaning, and the backup power that keeps a night shift running through an outage.
On-site support. IT staff on the floor as well as on the phone, plus the physical security and access controls that certifications like PCI DSS require.
For roles that handle payment data, regulated records or anything a client’s auditor is going to ask about, the office seat is usually the right answer. For most knowledge work, home-based staff on the $395 fee do the job just as well, and the choice is yours.
Compare fees with fees, not fees with salaries
Here is the comparison I would ask every buyer to make. A global EOR platform charges $599 to $699 a month to be the legal employer of your person, and that is all it does. Sourcefit charges $395 to employ the same person and run the whole operation around them from home, and $495 to do it from our offices. The fee is the same whether that person is in Manila, Johannesburg, Santo Domingo or Antananarivo.
That is the comparison the fee belongs in. The platform product is a good one for what it does, and our own EOR service exists at $199 for companies that only want that layer. The point is that once you need recruitment, equipment, IT, training and somewhere for the person to work, the fee for all of it is lower than the fee some providers charge for the employment paperwork alone.
What it looks like all in
Our public rate card lists an entry-level customer service representative at $980 per month, all in. That figure is the person’s salary and statutory benefits at cost plus the fee I have described above. The same page puts a US customer service representative at $39,000 to $46,000 a year in base salary before benefits, which works out to $3,250 to $3,833 a month before any of the costs the fee covers are added.
The all-in number is the one that tells you whether offshoring makes sense for your company. The fee is the number that tells you what you are getting for it, and whether the provider is willing to show you.
Questions to ask any provider about the fee
Whether or not you ever talk to us, these six questions will tell you what a quote is actually made of.
- What is your management fee per employee per month, and is it a flat amount or a percentage of salary?
- Will my invoice show salary, government contributions and your fee as separate lines?
- Which of the following are inside the fee, and which are extra: recruitment, computers, 24/7 IT support, insurance, certifications, training and quality, HR, office space?
- What else can appear on an invoice: setup, workstation, onboarding, deposits, exit charges? And if I want to take my team in house, what does that cost?
- Do you hold your certifications directly, and can I see current audit documentation?
- What are the contract term, the notice period and the exit cost?
A provider who can answer all six without hesitating is selling something they are comfortable with. A provider who answers with the all-in savings number is asking you to take the blend on trust.
Frequently Asked Questions
How much do BPO companies charge on top of salary?
Flat fees in the Philippines market vary widely, and most providers do not publish theirs. Sourcefit’s management fee is $395 per employee per month for work-from-home staff and $495 for office-based staff, on top of salary and statutory benefits passed through at cost. Providers that use a percentage markup commonly add 30 to 70 percent to salary, and bundled-rate providers do not disclose the split at all.
What is included in Sourcefit’s management fee?
Legal employment and compliance with an HR team on the ground, recruitment, an i5 computer with dual monitors and a headset, a 24/7 IT help desk, a secure managed network (VPN, Cloudflare, remote device management), security certifications held directly (ISO 27001:2022, ISO 27701, PCI DSS, SOC 2), four lines of insurance, training, quality and operational success, client success management, the Knit workforce platform, and itemized invoicing. There are no setup, recruitment, workstation, exit or team transfer fees. For office-based staff the fee also covers the seat, the office network and utilities.
Is a flat fee better than a percentage markup?
A flat fee is transparent and does not go up when you give your team a raise. A percentage markup means the provider’s income grows with your payroll, which creates an incentive you may not want. Either can be fair, but only the flat fee lets you see exactly what you are paying for.
Why is the staff augmentation fee lower than some EOR fees?
Because the cost base is different. A global EOR platform has to fund a software company and legal entities in dozens of countries from its fee. An operating company spreads its offices, HR, IT and recruitment across a large existing workforce, so adding one more employee costs less at the margin, even though far more is included.
Does the fee change by role or seniority?
No. The fee is the same for a customer service representative and a senior engineer, because the costs it covers do not depend on the person’s salary. The salary differences show up in the salary line, where they belong.
Is output-based pricing cheaper than a management fee?
For simple, repetitive, countable work it can be, and AI is pushing those unit prices down. For roles that depend on judgment, context or relationships, output pricing rewards the wrong behavior, hides the people and the margin inside the unit price, and leaves the vendor in control of the whole process. Sourcefit offers output-based pricing for processes that suit it and salary plus fee for everything else.
Does the fee apply outside the Philippines?
Yes. The same $395 and $495 management fee applies in every country where Sourcefit offers staff augmentation: the Philippines, South Africa, the Dominican Republic and Madagascar. Armenia is an Employer of Record market only. What changes from country to country is the salary line, which is passed through at cost, and the statutory contributions that go with it. The fee does not change.
What a lower quote usually leaves out
Putting a fee on the website invites comparison, and some of those comparisons will not favor us next to the cheapest quotes in the market. I would rather have that conversation than ask a buyer to trust a number they cannot take apart. If another provider shows you a lower fee, ask for the list above and see what has been left out. If they show you a lower all-in rate, ask what salary is inside it. Those answers will tell you more about who you are hiring than the price will.
For the record, I run Sourcefit, so the fees in this article are ours. The questions work no matter who you end up choosing.
Related reading: EOR Pricing in the Philippines Explained, Who Is Your BPO Actually Working For?, and the Sourcefit rate card.
