What is the reasonable rate to give a Filipino freelancer?

Posted March 3, 2010 in Employer Tips, Philippines by

Most employers, especially those new to outsourcing, have this very important question foremost in their minds:  “What is the fair rate that I should give my Filipino provider(s)?”

An online freelancer’s rate is determined by a lot of different factors, the most important being: the cost of living in their country, the skills and abilities of the said freelancer, and whether you are hiring for a full time position or a project-based endeavor.

It is a no-brainer that the cost of living in the Philippines is much lower than that of first-world countries like the US and the UK.  Consequently, you could get the same quality of work, if not better, from a Filipino provider for a much lower rate than what you would expect to pay providers in your own country.  However, contrary to what some people believe, paying a Filipino freelancer $200/month for 40 hours of highly-specialized work per week is hardly enough.  Between spending for food, rent, utilities, and expenses necessary for online work – like PC maintenance and internet connection, $200/month is not a livable rate.

The old adage, “You get what you pay for”, is also very much applicable to outsourcing.  You may be able to hire somebody for $1/hr, but  more often than not, you will get better quality work if you hire someone for a slightly higher rate.  If you are willing to pay a reasonable rate, you will easily find an intelligent, hardworking, trustworthy, and loyal contractor that will stay with you and grow with you and your business.

So how much is reasonable?  Now, that would really depend on the kind of work you are outsourcing. But before I get to that, let me give you a basis for the rates that I will be suggesting.  The minumum wage in the Philippines in the national capital region is roughly P8,000/month.  With the current exchange rate of P46.46 per $1 ( with paypal and xoom exchange rates a few points lower than prevailing exchange rates), the minimum wage would come up to $172.20/month.  This wage is given to rank and file employees, factory workers, fastfood employees, etc.  Naturally, white-collar workers get more than this.

Let me take for example the average salary a call center agent gets per month.  Why call centers, you ask? Call centers are the top outsourced industry to the Philippines and since we are talking about outsourcing in general, it would be a good basis in terms of rates.  An average call center agent earns P15,000 or $322.86 per month.  That is roughly $2/hour for 40 hours of work per week.  Call center agents don’t have to buy their own PCs/laptops, pay for an internet subscription, and pay for electricity.  Plus, companies spend a lot in training and building facilities.

Below is a table of suggested rates that you may want to pay a Filipino online freelancer based on the kind of work you are outsourcing.  I have come up with these rates based on my research on prevailing rates, both for traditional and online jobs.  Please note that these are just suggested rates, not absolutes, and you may want to just use this as a guide. These rates assume we’re talking about a worker of average to above average skill and experience.

freelancer rates

Note that there is a significant difference between the project-based rates and the full time rates.  Full time rates are mostly lower because these jobs, more often than not, are long term as opposed to project-based jobs that are piecemeal. I’ll be writing a post about this later.  Also, these rates are given under the assumption that you are to hire average to above average-skilled workers.  Less skilled workers will naturally be paid less as you would need to spend time in training and teaching them the skills they will need to do the kind of work you’d want.

At the end of the day, what you decide to pay your worker will ultimately depend upon you and your business – the amount of responsibility you are willing to delegate, the role this worker plays in your administration, and the amount of money you are looking to earn with their help.  Whatever you decide, one thing remains certain: outsourcing to the Philippines may just be one of the best things you can do for yourself and your business.

68 responses to What is the reasonable rate to give a Filipino freelancer?

  1. Nice post. Very informative and certainly a great blog for those who wanted to be a freelancer.

  2. Thanks, Ryan! We will have more posts about this topic and we hope that through this blog, we will be able to help guide freelancers and employers alike.

  3. Great post.It could also an eye opener for employer & workers here.

  4. Thanks, Jeanet! Our aim is to help and guide both employers and workers and suggest outsourcing best practices for the benefit of everyone.

  5. The biggest factor I think an employer should factor in is experience.

    Most people are brand new, just starting out as freelancers, either still in College or just graduated.

    There are the seasoned workers who have been doing this for several years as freelancers and they know what they are worth and they know what they should be paid.

    Our general rule when hiring is $75-$150 a month for a Part Timer.

    $250 to $400 a month full timer.

    If you find an exceptional worker with several life skills many years out of college and you are not sure where to begin…. Begin at $400 the first month and call it a trial.

    See if they are faster, more knowledgeable, and less hands on for you to micromanage. After 30 days, if you find they are certainly the top of their game, give them more money and continue on. How much? $100-$200 max for the exceptional worker, which brings them to $500-$600 a month.

    In my experience, never start people at $500 or $600, but allow them to work into it quickly, if they show you over time, they have the talent to quickly provide a return on that investment for you, as the contractor.

    Keep in mind, these are NOT EMPLOYEES. They are independent contractors, paid as CONSULTANTS to your international companies. With that comes some great benefits for USA Entrepreneurs, as you will not pay any taxes, sick pay, vacation pay or time spend when brownouts or monsoons disrupt power or ISP services.

    But these can also be negotiated into the consulting fees, on a case per case basis.

    Jeff Mills
    http://freeoutsourcingcd.com
    Attempting to live the 4 hr work week

  6. Thank you very much for your input, Jeff :-) We really appreciate your comment as it is very useful for employers/buyers to help them determine correct rates to give their providers/contractors.

  7. Any current employee perspectives?

  8. This is one of my biggest struggles.. Some Freelancers “dive” the rate just to get the job. I used to have an hourly rate of $5-$6 in GAF and Odesk but had to lower it down to get clients. Anyhow, I got most of my clients from personal contacts and not from those sites I mentioned.

    It’s good to have a “basis” of the pricing. Employers have to keep this in mind, ” You get what you pay for”. If you are looking for quality outputs, dont look for the cheapest on the list of freelancers, look for those who have the skills and experience and weigh if he has the price tag worth the skills and experience that the freelancer has. By doing this, you’ll never regret every buck you spend on a Freelancer. ^_^

    Anyhow, 2 days in EasyOut and no luck yet. teehee

  9. i surely love your own writing way, very useful,
    don’t give up as well as keep writing simply because it simply just worth to follow it.
    excited to see more of your current well written articles, cheers :)

  10. @usalomiarma: Thanks!

  11. Thank you for this post. Contains good information and very reliable.

  12. Hi – Jeff Mills summed up my expectations on hiring -… NOT EMPLOYEE – but they are independent contractors, paid as CONSULTANTS to your international companies. With that comes some great benefits for USA Entrepreneurs, as you will not pay any taxes, sick pay, vacation pay or time spend when brownouts or monsoons disrupt power or ISP services.

    I too am not hiring an employee – but seeking an independent contractor to assist with data entry type work – and I understand that to mean the SS and benefits (and tax reporting) required by the Philippine government are not required for me to pay ??

    Want to make certain of the wording and requirements before I determine a salary offer. Thanks!

  13. @Cheryl: I updated the post to replace where I referred to contractors as “employees” to “contractors” or “workers”. :-) Hiring Filipino online contractors doesn’t bind you with Philippine labor and tax laws. Only physical, brick & mortar companies located in the Philippines are bound to follow these laws.

    I cited the employee benefits in our country on a separate post to serve as a guide to foreign buyers who wish to outsource to the Philippines on the rates they may want to offer their Filipino contractors.

    I hope this helps. Thanks!

  14. @Joyce: Thanks! Do continue to read our blog as I will be posting more articles relevant to outsourcing and working online.

  15. This is a well written article. I sure am eager to read all of your articles.

  16. Thank you for hosting such a creative weblog. Your website happens to be not only informative but also very inventive too. There are very few people who can think to write not so easy content that creatively. we keep searching for content on a subject like this. I have gone in detail through dozens of websites to find knowledge regarding this.Looking to many more from your site !!

  17. Your comment on Yaro’s blog on his post, “Is Outsourcing Exploitation?”, is something to really give value in behalf of freelancers here in the Philippines.

    I was about to write a blog post on my insight in parallel with ( and skewed with) Yaro’s. But before going further with my blog post, this post has really aroused my interest about the same plight as you have with regards to freelancer’s pay.

    Freelancers should be provided “real” value with their work. But on the matter of outsourcing, it should be even more. Although the average monthly pay for Filipinos here even me in Cebu is now between 7k-8.5K , this salary is not sufficient enough to cover all the basic needs for a month. And most of the freelancers might even complain for even $400 a month or roughly 17,600 in pesos based on US-Peso exchange. Because really, this monthly earning is not enough to grow a family of 3 or 4.

    Though I am thankful for being single but still I have wants and needs to meet. The $500/month is, I think, reasonable enough even for entry-level freelancer, but when standard of living rises, the desire for more also drives up proportionately.

    I am back from freelancing after almost a year of temporary retirement (I went back to offline business but found it very stressful). I have had experiences in web content writing for over 4 years now. However, I was appalled looking at freelancers.com and even at ODesk for having rates as low as $1.25 for 400-word article on their posted ads. Looking at it has been my reason not to pursue with freelancing for five months and just wait for someone to recognize my works ( I have created a portfolio fortunately but still I’m looking for more with good-paying prospects). And luckily I’ve been contacted and have started writing for a client but still looking for more.

    I consider my freelancing endeavour as supplemental income for my blogging and Internet marketing career but I still treat it as my primary income source.

    Saying “great post” or “this article is great” has become a cliche so I refrain using it to appreciate this noteworthy post.

    And btw, whenever you need a signature or something to bring this to a new level of activism, you may contact me. I am really with you on this.

    PS

    My blog post as a response to Yaro’s post will be postponed tomorrow. It’s late now and I need to say adieu to the world for a fresher mind tomorrow.

    And I apologize for the long comment… got carried away.

    • I totally agree with you, Bjorn. $500 a month is not enough to support a family of 4 members. I live in Tarlac and started online work as part-time. I finally decided to go full time last May 2011. I started with odesk. During that time, a provider can still find clients who pay well. I am lucky for most of my clients paid me well. Some were only for a short period of time, though. I have maintained a good working relationship with one of my clients. I’ve been writing SEO articles, blog posts, product descriptions and maintaining his social media sites for 3 years. He does not take advantage of my talent and pays me well. He is one of those good clients from odesk.

      It saddens me, though, that most of the clients now on odesk pay poorly with $ 0.001 per word or $ 0.25 for a 500-word article. I already brought this attention to odesk and some have the nerve of not paying workers. I did experience this myself and have friends who were also duped and used. Nothing has been done. I thank odesk for helping me find good clients but they should really do something on this growing number of “unpaid work incidences”.

      I am happy to be part of easyoutsource. Yes, I still go and search for new clients but do not easily succumb to cheap rates. I hope that easyoutsource will continue to take care of their providers’ welfare but ensuring that they get paid and receive at least a decent amount for their work.

      I also plead on some providers to not accept cheap rates, as this only motivates clients to offer lower rates. I still believe that Filipinos are at par with our foreign counterparts.

      Thank you,

      Daffny

  18. Hi Bjorn,

    I totally agree with you and seeing these really low rates posted by workers really is devastating. It would really be nice if there are standards set for certain online work and certain skill levels.

    What’s your blog? I would love to check it out. Thanks.

  19. This is a great article. I would just like to add that the best freelancers respect their employer’s deadlines. Thus, we submit our work right on time. However, employers should also do their share by paying their writers/programmers/virtual assistants on time. I have been a freelancer for quite some time and I have friends who are also into this career path. I have heard stories of employers suddenly disappearing when the freelancers are asking them for feedback regarding payments.

  20. @Rica:

    You are right. While there are “disappearing” freelancers, there are also “disappearing” employers. There are always flakers at opposite ends of the spectrum.

    All we can do is hope and pray that we don’t encounter such employers :-)

  21. This is a nice article but I would disagree on a few factors as to why I do not limit myself to companies who can offer as much as $5/hr based on the services I offer as I know i later will be maximized based on what my capabilities are… one day you’ll be doing SEO, the next thing you know, you’re doing a lot more than what you both have discussed as to how far your work coverage is. One thing that I also put to consideration is the fact that most lowballers are high maintenance and can take so much of your time with less profit. I also put to consideration the fact that most of the software that they’d be needing are readily available for them to invest any further for these things. And lastly, a $5 per hour may be reasonable for freelancers who live with their families, but if you’re on your own and having the need to pay your monthly rent, electricity, internet connection etc… I don’t think $5/hour specially for VA-SEO jobs would be a reasonable amount of service fee… but of course, with the rate I ask, follows the continuous proving that I am able to deliver far better.

  22. @Jefferson:

    Thanks. The rates I suggested in the post above is just a starting point for online workers with average skills. Of course, rates vary according to a freelancer’s skills set and experience and the scope of work that the project entails.

    For more experienced and highly-skilled workers, it follows that they should be given higher rates. Of course, the rates will be agreed upon by the employer and worker and it is at the employer’s discretion to offer a higher or lower rate based on his evaluation of a worker’s skills.

  23. I have a private client who contacted me and offered $150 a month for 40 hours of work each week. In other words, a full time job at less than $1 an hour.

    FYI, just the internet connection for one hour using wireless prepaid is already roughly half that amount (P20/hour). Add in the electricity and costs of setting up a workplace at home with a computer and furnishing and you might as well not be working.

    • @Mei Li:

      There are really clients out there who do not take into consideration other factors that affect a freelancer’s rate. Just explain to this client that the rate he is offering you is too low and explain to him the overhead expenses involved in working online. Suggest to him a reasonable rate for the kind of work that he is asking you to do. If he doesn’t agree, it will be best not to take the offer at all. Just my thoughts.

  24. This is a great article that can really enlighten employers to the situation of Filipino freelancers and, from the replies, remind us that when we continue to deliver excellent work on time, we can reap greater rewards.

  25. If Starbucks costs $1.50-$2.50 a cup and a regular meal costs $5-10 per person, these lowballers should learn to have some common sense of decency of assessing their labor fees properly… and hopefully thinks before sending a message saying “i can get it for $_____ somewhere!” and insist on it. They better get the thought shoved in their *sses then ‘coz i really won’t mind people stupefying themselves for not doing any labor fee and maintenance cost research.

    And seriously, if some clients can bluntly say “THAT’S WHAT I’M PAYING YOU FOR!” like they’re providing you luxury, they better start sounding sensible instead of being cheesy when payments are due and need to pay them in installment basis… With that said, how about freelancers responding back with “I don’t care WTF you’re going through, just get your invoice PAID!” How does that sound like in return? (These people better realize how patient we are and how we respectfully continue to treat them despite their inadequacies).

  26. I have been using the services of Filipino freelancers for a few years now. I usually have limited funds, but worry about paying a fair rate. I’m about to start hiring more people in areas in which I have never outsourced before. Your post as both reassured me of my past rate of pay and given me good guidelines for the future. Thank you

    Tracey

    • @Tracey:

      I’m very glad that this post has been very useful to you. I really appreciate employers who are very concerned about paying their employees a fair rate.

      You may go through our other posts filed under employer tips for other useful information on outsourcing.

      I’m glad to be of help :-)

  27. As UK company how do I deal with VAT when hiring a Filipino?

  28. I wonder if Jeff Mills really wrote that, or if he outsourced someone to do it, since that entry was link building after all……

  29. @Ines

    You don’t have to worry about the VAT when hiring a Filipino. What Filipinos have is WTAX or withholding tax which is usually deducted from employee’s salaries for an employer-employee relationship. However, these are not applicable to online contractors because the employers or companies inside Philippines will remit those deductions to the government. You can check this link http://www.bir.gov.ph/taxinfo/tax_withld.htm

  30. @Matthew:

    I guess, he wrote it based on his experience working with online contractors. However, his insight and tips were helpful for our buyers and for independent contractors as well. :)

  31. LOL @Matthew’s post.

  32. “Debbie Mariano (Admin) said: On February 12, 2011

    @Ines

    You don’t have to worry about the VAT when hiring a Filipino. What Filipinos have is WTAX or withholding tax which is usually deducted from employee’s salaries for an employer-employee relationship. However, these are not applicable to online contractors because the employers or companies inside Philippines will remit those deductions to the government. You can check this link http://www.bir.gov.ph/taxinfo/tax_withld.htm

    I have a question about the “contractor’s vs employees” mentioned above.

    I was told by a friend that it’s customary for filipino employers to pay their “employees” a 50% bonus of one months salary every six months. I’ve heard that some employers from the USA frown upon this because, as is stated above, these are NOT employees, but independent contractor’s. Most independent contractor’s in the USA certainly don’t receive such a benefit.

    What are your thoughts on this?

  33. I can also appreciate the fact that most employers in the USA don’t understand how little a $200.00 per month salary is in the filipino economy. Honestly, I never knew that either.

    That being said, it’s still extremely difficult as a U.S. employer to verify the skill level of a filipino contractor without actual “hands on” training. A contractor may say that they have experience in a specific area, but it may not be anything close to the way the employer does it.

    Also, it’s much more difficult to verify experience and background checks on people hired overseas. So you never know exactly what you’re going to get, who can be trusted with certain aspects of your business that requires access to sensitive or personal information and more. Does that make sense?

    Personally, I want to be fair with everyone I work with and I want to keep them as long as possible. However, as a businessman, I simply can’t justify starting anyone out at a higher rate until they’ve proven themselves. It’s wasteful spending, and in today’s economy, most business owners simply can’t afford that.

    For a full-time VA, I could see paying $300.00 per month for 60 days until they were trained in all the basic aspects of the way I need to have tasks performed in MY business. I’d then give a raise after two months, four months and six months. By this point they should be earning the $500.00 per month. Maybe more than that after one year of loyalty.

    Some may think I’m being harsh or unfair, but let me make a point before you judge. Minimum wage where I live is $7.40 per hour and the cost of living is around 7-8 times higher at least. We have no guaranteed medical available and if it is available through our workplace, we must pay for it. We also must pay taxes. A raise for a filipino from $300.00 per month to $500.00 per month in six months is almost double! I guarantee you that you’d almost never see that kind of increase happen here. Most minimum wage workers work in fast food or hard labor jobs.

    Please don’t take this post as being arrogant or inconsiderate of others. That would be completely untrue and unfair. I’m just saying that there are two sides to everything that must be considered.

    Joe

  34. I also want to comment on the post above as follows in quotes:

    “You don’t have to worry about the VAT when hiring a Filipino. What Filipinos have is WTAX or withholding tax which is usually deducted from employee’s salaries for an employer-employee relationship. However, these are not applicable to online contractors because the employers or companies inside Philippines will remit those deductions to the government.”

    I’m referencing this because of the Filipino custom of giving a bonus to Filipino employees the equivilent of 50% of one months pay each year.

    Filipino “contractor’s” are NOT “employees, therefore those that employ them should not be expected or required to pay this. If contractor working for me is doing a great job then I can guarantee that they’ll be well taken care of, but out of my own kindness and gratitude, not because I “have” to do it.

    Joe

  35. @Joe:

    I am so glad that you post your insights about this. As we are emphasizing, the higher rate one contractor should bid, the more skills should he be armed on.
    And yes, “freelancer’s employers” are not required to pay for the contractor’s taxes but still any bonus given to them, as you have mentioned as a reward for a good job, will be much appreciated by your contractors.

  36. I found this site on the SEO blog I normally visit. As an owner of two small companies, and as the in house SEM, this site is a God send to me. Being fair to my future contracts is of the utmost importance to me this post gives me some insight as to what I should pay and so on. I just hope I can find some really competent, hard working people here.

    Thanks

  37. it’s very well interesting & informative….

  38. djam said on May 6, 2011

    @Alex:
    Thank you! We are also sure that you will find hard working Filipino contractors here!

    @March!
    Thanks! More interesting and very, very informative articles you might want to read about EasyOutsource Tips & Tutorials.

  39. I found this post to be very useful as I have just started using outsourcing and had no idea of what would be considered a fair rate. My first outsourcing experience with elance was not so good; I’m sure I can get a better result from EasyOutsource. Thanks Kathy & Honey

  40. djam said on May 13, 2011

    Good luck Trish! I’m sure it is going to be better here in EasyOutsource. :)

  41. Eric said on May 16, 2011

    I completely agree with the rates posted above even though they might seem a little low for North American standards. Workers from the Philippines tend to be great and constantly provide quality work.

    As with all my team members, I increase their rate the longer they are with me. (The longer they work with me, the more valuable they are… and therefore, I believe they should be compensated accordingly.)

    To maximize my profits, I make sure to use a time tracking tool (Hyperhour) that allows me to monitor how many hours they work during the week and to see what they are working on. I can’t count the amount of times that I had to intervene because the employees weren’t doing the work properly.

    When you can see what they are doing, you can correct it before they go too far in the wrong direction!

    For example, I was doing some link building via articles and I noticed that one of my employees was spending 30 minutes of research, 1 hour writing an article in Word, editing it… only to manually submit it to article directories. I was wondering WHY it was taking so long to post 1 article, but when I started using Hyperhour, I saw what she was doing and was able to help her increase her performance…. It’s been 3 months, and now we get quality articles posted in under 30 minutes!

  42. What a very nice article… Kudos to the writer.. :)

  43. yeah! It’s very helpful guide to those who are outsourcing in the Philippines for they have a guide on the standard rates.

  44. These are not followed now with most of the employers. They will just pay like in the local city in Philippines, what a very low. I don’t know what happen, most people even $1 for a 100 profiles will deal a job. tsk tsk tsk…

  45. this must be implemented wisely and surely!
    I have been a victim from this site

  46. How much would be the rate for an travel consultant who has 5 more or less five years experience and knows how to use Amadeus?

  47. Oooohhh…. That’s too low. I disagree.

  48. Great article, quick question, i really want to hire someone for only around a few hours per week initially is that possible, as the business grows, I would pay more for sure. Is that ok for some workers? salamat po

  49. @malcolm: Hi, sorry for the delayed reply.. if you want to hire a Filipino freelancer for only a few hours per week let’s say 20-30 hours per week, that is what we call a part time work. Full time work is 40 hours per week, sometimes more, depends on the client and their employee. There are workers in this site who are looking for part time work.
    Thanks-

  50. The pay rates now are really getting lower.

    Want to be a freelancer? Visit for a step-by-step process
    http://moneyfromtheinternet.weebly.com/start-earning.html

  51. I was just offered 6k for a job which requires a 40 hours a week and 9 articles that are 500 words each. I had to decline the offer. I was half-tempted to provide her a link to this article.

  52. Totally agree! This is not just true to online job employers but to all employers. Employers should make their employees “happy” working for them and they will certainly return the favor to the employer, their clients and or customers. In other words, “don’t give your employees the reason to not give their best doing their work”.

    • Very well said @Paul, we Freelancers/ Professionals are human beings too. We need to feel that we are appreciated by our employers/ clients. We need to be treated fairly nice and we need to be trusted as well. When these are given to us, we not only provide good quality of work and productivity. We also give our loyalty and this is quite important.

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    His products include energy (in some areas), cell phones, picture phones, computer services, and much more. Please take a look at his website:

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    If you would please post his information on your outside and inside signs, bulletin, e-mails, newsletter, TV/Radio, bulletin boards, website or anywhere else you feel would be appropriate to get the word out about his situation, we would appreciate it. Of course, feel free to browse his products for you and your family, as well.

  54. I am having trouble finding that rates now.

  55. Thank you for your helpful article.

  56. Geez… i see a $200 per month full time ad. This is sad. Whoever accepts that kind of salary is mad! You will also kills other online jobs because the rates will just continue to drop if people start accepting this kind of salary.

  57. How many of these employers go on to marry one of their female employees? Does anyone know?

  58. Two thumbs up….good job!

  59. I already know the good basis on how rate is being provided.

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