For a $2,000/month employee, total EOR cost (salary + statutory contributions + management fee) ranges from $2,581 in Thailand to $3,197 in Indonesia, a $616/month difference driven almost entirely by statutory contribution rates and severance provisioning. The EOR management fee alone ($400-$650 across most markets) accounts for only 30-50% of the cost above salary. Indonesia's providers add 5-8% monthly for GR 35/2021 severance reserves; skip that provisioning, and you face a lump-sum invoice exceeding 10 months' salary when you terminate. Singapore EOR runs $7,115-$8,135/month all-in for a $6,000 salary, but $0 CPF for Employment Pass holders versus 17% for citizens changes the math entirely.
This breakdown covers management fees, statutory employer contributions, hidden costs (onboarding fees, FX markups, offboarding charges), and break-even headcount for EOR versus entity setup in all 6 countries, with total cost modeled at the $2,000/month salary level so the numbers are directly comparable.
Management Fee Comparison
|
Country |
Typical Monthly EOR Fee |
Fee Range (Low-High) |
Pricing Model |
|
Vietnam |
$400-$700 |
$350-$800 |
Flat fee per employee |
|
Philippines |
$450-$700 |
$400-$850 |
Flat fee per employee |
|
Indonesia |
$500-$800 |
$450-$1,000 |
Flat fee + severance provision |
|
Malaysia |
$400-$650 |
$350-$750 |
Flat fee per employee |
|
Thailand |
$400-$600 |
$350-$700 |
Flat fee per employee |
|
Singapore |
$800-$1,500 |
$600-$2,000 |
Flat fee or % of salary |
Volume discounts apply at 5+ employees (5-10% reduction), 10+ (10-15%), and 20+ (15-25%). Enterprise contracts with 50+ employees across multiple countries negotiate fees 25-40% below list price. Some providers offer percentage-of-salary models (typically 15-25% of gross salary) instead of flat fees, these become expensive for high-salary roles but cheaper for low-salary ones.
Total Employer Cost by Country
The real comparison requires adding statutory contributions to the management fee. Here is the total monthly cost for a hypothetical employee earning $2,000/month gross salary:
Vietnam
-
Gross salary: $2,000
-
Social Insurance (17.5%): $350
-
Health Insurance (3%): $60
-
Unemployment Insurance (1%): $20
-
Trade Union (2%): $40
-
EOR management fee: $550 (mid-range)
-
Total monthly cost: $3,020
-
Effective multiplier: 1.51x salary
EOR process in Vietnam handles monthly social insurance declarations to VSS and personal income tax filings. The contribution cap at 20x regional minimum wage limits exposure for salaries above VND 46.8 million/month (~$1,870 in Region I), above this threshold, the effective employer contribution rate drops.
Philippines
-
Gross salary: $2,000
-
SSS employer (9.5%): $190
-
PhilHealth employer (2.5%): $50
-
Pag-IBIG employer: $2
-
13th month provision (8.33%): $167
-
EOR management fee: $575 (mid-range)
-
Total monthly cost: $2,984
-
Effective multiplier: 1.49x salary
The 13th month pay is provisioned monthly but paid in December. EOR providers also handle separation pay provisioning for potential termination scenarios.
Indonesia
-
Gross salary: $2,000
-
BPJS Ketenagakerjaan. JKK (1%): $20
-
BPJS Ketenagakerjaan. JKM (0.3%): $6
-
BPJS Ketenagakerjaan. JHT (3.7%): $74
-
BPJS Ketenagakerjaan. JP (2%): $40
-
BPJS Kesehatan (4%): $80
-
THR provision (8.33%): $167
-
Severance liability provision (~5-8%): $100-$160
-
EOR management fee: $650 (mid-range)
-
Total monthly cost: $3,137-$3,197
-
Effective multiplier: 1.57-1.60x salary
Indonesia's total EOR cost is the highest after Singapore due to mandatory THR (Tunjangan Hari Raya) and severance provisioning under GR 35/2021. Reputable EOR providers build severance reserves into monthly billing, if they do not, the client faces a lump-sum invoice at termination that can exceed 10 months' salary.
Malaysia
-
Gross salary: $2,000
-
EPF employer (12%): $240
-
SOCSO employer (1.75%): $35
-
EIS employer (0.2%): $4
-
HRDF (1%): $20
-
EOR management fee: $525 (mid-range)
-
Total monthly cost: $2,824
-
Effective multiplier: 1.41x salary
Malaysia offers the lowest total EOR cost among the six countries at equivalent salary levels. Payroll processing is comparatively straightforward, which contributes to lower management fees. EOR in Malaysia is a mature market with multiple provider options.
Thailand
-
Gross salary: $2,000
-
Social Security Fund (5%, capped at THB 750): $21
-
Provident Fund employer (3-5%, if offered): $60-$100
-
EOR management fee: $500 (mid-range)
-
Total monthly cost: $2,581-$2,621
-
Effective multiplier: 1.29-1.31x salary
Thailand's low statutory contribution cap makes it the cheapest in absolute employer cost terms. The Social Security Fund employer contribution caps at THB 750/month regardless of salary, meaning a $5,000/month employee costs the same THB 750 as a $1,000/month employee. EOR in Thailand is competitive on pricing, though termination costs (severance of 30-400 days based on tenure) add a contingent liability component.
Singapore
-
Gross salary: $6,000 (minimum practical for EP-level roles)
-
CPF employer (17%): $1,020 (for citizens/PRs; $0 for EP holders)
-
SDL (0.25%): $15
-
EOR management fee: $1,100 (mid-range)
-
Total monthly cost (citizen): $8,135 | Effective multiplier: 1.36x
-
Total monthly cost (EP holder): $7,115 | Effective multiplier: 1.19x
EOR in Singapore is most cost-effective for foreign employees on Employment Passes. CPF does not apply, reducing statutory costs to just SDL. For Singaporean citizens/PRs, the 17% CPF employer contribution is a significant cost component. Singapore payroll requires monthly CPF filings and annual IR8A reporting.
Hidden Costs to Watch
Onboarding fees: Some providers charge $200-$500 per employee for contract creation, system setup, and compliance review. Others include this in the monthly fee.
Currency conversion markups: Providers paying employees in local currency from USD/EUR invoicing typically apply 1-3% FX markup. Over 12 months for a 20-person team, this adds $5,000-$15,000.
Benefits administration fees: Supplementary health insurance, life insurance, and other voluntary benefits may carry an additional $50-$150/month per employee administration fee.
Offboarding/termination costs: Beyond statutory severance, providers charge $500-$2,000 for termination processing, document preparation, government filings, final settlement calculations. In Indonesia, where termination calculations involve multiple components (UP, UPMK, UPH), this fee is justified by complexity.
Contract amendments: Changes to employment terms (salary adjustments, role changes, benefit modifications) may incur $100-$300 per amendment depending on the provider.
EOR vs Entity Break-Even Analysis
|
Country |
Entity Setup Cost |
Monthly Entity Overhead |
EOR Monthly Fee |
Break-Even Headcount |
|
Vietnam |
$20,000-$40,000 |
$2,000-$4,000 |
$550/employee |
15-20 employees |
|
Philippines |
$15,000-$30,000 |
$2,000-$3,500 |
$575/employee |
12-18 employees |
|
Indonesia |
$30,000-$80,000 |
$3,000-$6,000 |
$650/employee |
20-25 employees |
|
Malaysia |
$5,000-$15,000 |
$1,500-$3,000 |
$525/employee |
8-12 employees |
|
Thailand |
$10,000-$25,000 |
$1,500-$3,000 |
$500/employee |
10-15 employees |
|
Singapore |
$15,000-$25,000 |
$3,000-$5,000 |
$1,100/employee |
10-15 employees |
Entity overhead includes: accounting, corporate secretary, registered office, annual filings, local HR staff, and compliance management. The break-even calculation assumes equivalent compliance quality, a poorly managed entity may cost more in penalties and inefficiency than EOR at any headcount.
Companies choosing between EOR, PEO, and entity setup should model 3-year total cost of ownership, not just monthly fees. EOR flexibility (ability to exit a market in 30-60 days) has real option value that pure cost comparisons miss.
When EOR Is Always Cheaper
Regardless of headcount, EOR is cheaper than entity setup in these scenarios:
Multi-country, small teams: A company with 3 employees each in Vietnam, Philippines, Indonesia, and Thailand would need four entities ($75,000-$175,000 setup) vs four EOR agreements ($2,250/month total fees). The entity approach never reaches break-even unless each team grows to 15+.
Project-based hiring: 6-12 month engagements do not justify entity setup in any market. EOR's 12-month typical minimum commitment aligns with project timelines.
Market testing: Companies unsure whether to scale in a specific country should use EOR for 12-24 months before committing to entity infrastructure. The cost premium is the price of optionality.
Compliance complexity avoidance: In markets like Indonesia where payroll involves multi-tier BPJS calculations and annual THR processing, outsourcing compliance to an EOR eliminates the risk of penalties from filing errors, penalties that can exceed the annual EOR fee savings from running an entity.
