Remote Staffing ROI Calculator: How to Measure the True Value of Offshore Hiring
Authored by Vilbert Fermin
"How much will I actually save with remote staffing?"
It's the most common question business owners ask before hiring their first offshore team member. And it deserves a real answer, not vague promises.
The truth is, remote staffing can deliver massive returns, but only if you understand the complete financial picture. Some businesses save 70% on labor costs. Others break even or lose money because they didn't account for hidden factors.
This guide gives you the tools to calculate your actual ROI before making a hiring decision. We'll walk through the real costs of domestic employees, the true expenses of remote staffing, and a step-by-step framework to determine if offshore hiring makes financial sense for your specific situation.
No guesswork. Just math.
The ROI Formula for Remote Staffing
Let's start with the basic formula:
ROI = (Net Savings / Total Investment) × 100
Where:
Net Savings = (Cost of Domestic Employee) - (Cost of Remote Employee)
Total Investment = All costs associated with remote staffing (salary, management time, tools, etc.)
A positive ROI means you're saving money. The higher the percentage, the better the return.
But here's where most calculations go wrong: they only compare salaries. The real comparison requires understanding the total cost of employment on both sides.
The True Cost of a Domestic Employee
When you hire someone locally in the US, Canada, or Australia, their salary is just the beginning.
The 1.25 to 1.4x Rule
According to MIT research and the U.S. Small Business Administration, the true cost of an employee is typically 1.25 to 1.4 times their base salary. This accounts for:
Employment taxes (Social Security, Medicare, unemployment)
Benefits (health insurance, retirement contributions)
Paid time off
Workers' compensation insurance
For a more complete picture, some businesses use a 2.0 to 2.7x multiplier that includes overhead costs like office space, equipment, and management time.
Breaking Down Domestic Employee Costs
Mandatory Costs (US):
Social Security (FICA): 6.2% of salary (up to $168,600 in 2025)
Medicare: 1.45% of salary (no cap)
Federal Unemployment (FUTA): 0.6% on first $7,000 ($42/year)
State Unemployment (SUTA): 2.7-3.4% (varies by state)
Workers' Compensation: 0.5-3% (varies by industry)
Typical Benefits:
Health Insurance: $7,500-$11,000/year (individual), $15,000-$22,000/year (family)
401(k) Match: 3-6% of salary
Paid Time Off: 10-20 days (equivalent to 4-8% of salary)
Sick Leave: 5-10 days (equivalent to 2-4% of salary)
Overhead Costs:
Office Space: $3,000-$14,000/year per employee (varies dramatically by location)
Equipment: $1,500-$3,000/year (computer, phone, furniture)
Software/Tools: $1,200-$3,600/year
Training: $1,000-$2,500/year
Recruitment: $4,000-$7,000 per hire (average)
Example: US Customer Service Representative
Let's calculate the true annual cost of a customer service rep in the US:
| Cost Category | Annual Amount |
|---|---|
| Base Salary | $42,000 |
| Payroll Taxes (7.65% FICA + FUTA/SUTA) | $3,700 |
| Health Insurance (employer portion) | $8,500 |
| 401(k) Match (4%) | $1,680 |
| Paid Time Off (15 days) | $2,400 |
| Workers' Comp Insurance | $420 |
| Office Space (shared) | $5,000 |
| Equipment & Software | $2,500 |
| Training & Development | $1,500 |
| TOTAL ANNUAL COST | $67,700 |
| Multiplier vs. Base Salary | 1.61x |
That $42,000 salary actually costs $67,700 when you factor in everything. This is the number you should compare against remote staffing costs.
The True Cost of Remote Staffing
Now let's look at what you actually pay when hiring remote staff from the Philippines.
Direct Costs
Monthly Salary Ranges (Philippines, 2025):
| Role | Monthly (USD) | Annual (USD) |
|---|---|---|
| Virtual Assistant (Entry) | $600-$800 | $7,200-$9,600 |
| Virtual Assistant (Experienced) | $800-$1,200 | $9,600-$14,400 |
| Customer Service Rep | $800-$1,200 | $9,600-$14,400 |
| IT Helpdesk (Tier 1) | $1,000-$1,500 | $12,000-$18,000 |
| Bookkeeper/Accountant | $1,000-$1,800 | $12,000-$21,600 |
| Digital Marketing Specialist | $1,200-$2,000 | $14,400-$24,000 |
| Software Developer (Mid-Level) | $2,000-$3,500 | $24,000-$42,000 |
| Executive Assistant | $1,000-$1,500 | $12,000-$18,000 |
Additional Costs to Factor In
If Using a Staffing Partner (like Konnect.ph):
Management fee: Often included in quoted rate or 15-25% markup
Benefits administration: Handled by partner
Compliance/legal: Handled by partner
Recruitment: Typically included
If Hiring Directly:
Employer of Record (EOR) fees: $200-$600/month per employee
Philippines mandatory benefits (13th month pay, SSS, PhilHealth, Pag-IBIG): Add 15-20% to base salary
Recruitment costs: $500-$2,000 per hire
Legal/compliance setup: $1,000-$3,000 one-time
Universal Costs (Either Method):
Software/tools: $50-$200/month per employee
Communication tools: $10-$50/month per employee
Initial training time: 20-40 hours of your time
Ongoing management: 2-5 hours/week
Example: Philippines Customer Service Representative
| Cost Category | Annual Amount (USD) |
|---|---|
| Base Salary ($1,000/month) | $12,000 |
| Staffing Partner Fee (included in rate) | $0 |
| Software & Tools | $1,200 |
| Communication Tools | $300 |
| Management Time (3 hrs/week × $50/hr) | $7,800 |
| Initial Training (40 hrs × $50/hr, amortized) | $2,000 |
| TOTAL ANNUAL COST | $23,300 |
Calculating Your ROI: Step-by-Step
Now let's put it together with our example:
Domestic Employee Total Cost: $67,700/year
Remote Employee Total Cost: $23,300/year
Net Savings: $67,700 - $23,300 = $44,400/year
ROI Calculation:
ROI = ($44,400 / $23,300) × 100 = 190.6%
This means for every dollar invested in remote staffing, you're getting $1.90 back in savings compared to hiring domestically.
Percentage Savings:
Savings % = ($44,400 / $67,700) × 100 = 65.6%
ROI Calculator Framework
Use this framework to calculate your own ROI:
Step 1: Calculate Domestic Employee Cost
Base Salary: $_______
+ Payroll Taxes (8-10%): $_______
+ Health Insurance: $_______
+ Retirement Match: $_______
+ PTO Value: $_______
+ Workers' Comp: $_______
+ Office Space: $_______
+ Equipment/Software: $_______
+ Training: $_______
+ Recruitment (amortized): $_______
─────────────────────────────────────────
TOTAL DOMESTIC COST: $_______
Step 2: Calculate Remote Employee Cost
Monthly Salary × 12: $_______
+ Staffing Partner Fee: $_______
+ Software/Tools: $_______
+ Communication Tools: $_______
+ Management Time Value: $_______
+ Training Time Value: $_______
+ One-time Setup (amortized): $_______
─────────────────────────────────────────
TOTAL REMOTE COST: $_______
ROI by Role: What to Expect
Based on 2025 market rates, here's what typical ROI looks like for common roles:
| Role | US Total Cost | Philippines Total Cost | Annual Savings | Savings % |
|---|---|---|---|---|
| Virtual Assistant | $55,000 | $18,000 | $37,000 | 67% |
| Customer Service Rep | $67,700 | $23,300 | $44,400 | 66% |
| IT Helpdesk (Tier 1) | $78,000 | $28,000 | $50,000 | 64% |
| Bookkeeper | $72,000 | $26,000 | $46,000 | 64% |
| Digital Marketing | $95,000 | $32,000 | $63,000 | 66% |
| Software Developer | $165,000 | $55,000 | $110,000 | 67% |
Note: These figures include all costs (taxes, benefits, overhead, management time) and assume using a staffing partner. Direct hiring may reduce costs but increases management complexity.
Beyond Cost Savings: The Full ROI Picture
ROI isn't just about money saved. Consider these additional factors:
Quantifiable Benefits
Extended Coverage Hours
If your Philippines team provides after-hours support, calculate the value:
Hours of additional coverage per day × Value per hour = Annual benefit
Example: 8 extra hours × $50/hour × 260 days = $104,000 in coverage value
Faster Hiring
Staffing partners typically fill roles in 2-4 weeks vs. 6-12 weeks domestically.
Weeks saved × Weekly cost of vacancy = Hiring speed value
Example: 6 weeks saved × $1,500/week lost productivity = $9,000
Scalability
Ability to scale up or down without long-term commitments has real value for seasonal businesses or growth-stage companies.
Qualitative Benefits
Access to larger talent pool
Reduced administrative burden (if using staffing partner)
Diverse perspectives and skill sets
Business continuity across time zones
Potential Costs/Risks to Consider
Ramp-up time: New remote employees may take 1-3 months to reach full productivity
Cultural learning curve: Initial communication adjustments
Quality variance: Importance of proper vetting and hiring process
Turnover costs: If employee leaves, recruitment and training restart
When Remote Staffing Doesn't Make Sense
Be honest about when the ROI doesn't work:
Low ROI Scenarios:
Roles requiring physical presence (on-site IT, in-person customer service)
Highly regulated work requiring local licensing
Short-term projects (less than 6 months) where setup costs don't amortize
Roles requiring deep institutional knowledge that can't be documented
Very small tasks (less than 20 hours/week) where management overhead exceeds savings
Break-Even Considerations:
If your management time costs more than your savings, the ROI turns negative. This is why roles under 20 hours/week often don't make financial sense unless combined with other remote staff.
Real ROI Examples
Example 1: MSP with 3 Helpdesk Staff
Before (US-based team):
3 Tier 1 technicians × $78,000/year = $234,000
After (Philippines-based team):
3 Tier 1 technicians × $28,000/year = $84,000
Annual Savings: $150,000
Additional Benefit: 24/7 coverage (previously had gaps)
ROI: 179%
Example 2: E-commerce Company with Customer Service
Before (US-based team):
5 customer service reps × $67,700/year = $338,500
After (Philippines-based team):
5 customer service reps × $23,300/year = $116,500
Annual Savings: $222,000
Additional Benefit: Extended hours reduced response time from 24 hours to 4 hours
ROI: 191%
Example 3: Startup with Virtual Assistant
Before (US-based part-time admin):
Part-time admin (20 hrs/week) × $30/hr × 52 weeks = $31,200
Plus taxes/overhead: ~$40,000 total
After (Philippines-based full-time VA):
Full-time VA (40 hrs/week): $18,000/year total cost
Annual Savings: $22,000
Additional Benefit: Doubled the hours for less money
ROI: 122%
How to Maximize Your ROI
1. Start with the Right Roles
High-ROI roles for remote staffing:
Customer service and support
Administrative and executive assistance
Data entry and processing
Bookkeeping and accounting
Digital marketing and content
IT helpdesk (Tier 1-2)
Software development and QA
2. Invest in Onboarding
The first 30-60 days determine long-term success. Proper onboarding reduces:
Time to productivity
Early turnover
Management overhead
3. Use the Right Tools
Invest in:
Project management (Asana, Monday, ClickUp)
Communication (Slack, Teams)
Time tracking (if needed)
Documentation (Notion, Confluence)
4. Work with Experienced Partners
Staffing partners like Konnect.ph add cost but provide:
Pre-vetted candidates
HR and compliance handling
Backup coverage
Performance management support
The fee is often offset by reduced management burden and faster, better hires.
5. Think Long-Term
ROI improves over time as:
Training costs amortize
Employees gain institutional knowledge
Management becomes more efficient
You scale with proven processes
Quick ROI Estimator
For a fast estimate, use these multipliers:
If hiring through a staffing partner:
Your domestic employee cost × 0.35 = Approximate remote cost
Savings = Domestic cost × 0.65
If hiring directly with EOR:
Your domestic employee cost × 0.30 = Approximate remote cost
Savings = Domestic cost × 0.70
Example:
Domestic cost: $70,000
Estimated remote cost (staffing partner): $70,000 × 0.35 = $24,500
Estimated savings: $70,000 × 0.65 = $45,500
Conclusion: The Numbers Don't Lie
Remote staffing delivers real, measurable ROI for most businesses. The typical range is:
50-70% cost savings compared to domestic hiring
100-200%+ ROI when all factors are considered
Payback period of 2-4 months for setup and training costs
But ROI varies based on your specific situation. The framework in this guide helps you calculate your actual numbers rather than relying on averages.
The businesses that succeed with remote staffing are the ones who:
Calculate the true costs on both sides
Factor in management time honestly
Invest in proper onboarding and tools
Choose the right roles for remote work
Work with partners who reduce complexity
Run your own numbers. If the ROI makes sense, remote staffing can be one of the highest-return investments your business makes.
Ready to Calculate Your ROI?
Konnect.ph helps businesses in the US, Canada, and Australia build high-performing remote teams in the Philippines.
We'll help you:
Calculate your specific ROI based on the roles you need
Find pre-vetted candidates matched to your requirements
Handle all HR, payroll, and compliance
Provide ongoing support and performance management
Get a personalized ROI analysis for your business.
Schedule Your Free Strategy Session →
About the Author
Vilbert Fermin is the founder of Konnect, a remote staffing company connecting North American and Australian businesses with top Filipino talent. With deep expertise in offshore hiring and remote team management, Vilbert has helped hundreds of businesses calculate their ROI and build successful remote teams. His mission is to showcase Filipino excellence while helping businesses scale efficiently through strategic remote staffing.
