Hiring guides
Hiring a Filipino contractor as a UK company: what you actually need
No UK payroll, no local entity, and less paperwork than people expect. But three things do matter: classification, how you pay them, and the data protection step almost everyone misses.
The Adarna Team
Editors
The most common reason a UK founder does not hire abroad is a vague sense that it must be complicated. It is less complicated than they fear and more consequential in three specific places than they expect. This is the practical version: what you genuinely need, what you can ignore, and the parts where getting it wrong is expensive rather than embarrassing.
What you do not need
Start here, because it removes most of the imagined difficulty. You do not need a Philippine entity. You do not need to run UK payroll for them, because a genuine contractor who is resident in the Philippines and does the work there is not a UK employee and is not on your PAYE scheme. You do not, for a first-line support role, typically need an Employer of Record, which is a product built for salaried employment in-country and priced accordingly.
The overwhelmingly common arrangement is straightforward: a UK company engages an independent contractor in the Philippines under a written contract, pays them monthly, and the contractor registers with the Bureau of Internal Revenue and handles their own Philippine tax. It is standard, it is workable, and it is what most UK startups with a Manila-based support person are doing.
The three things that do matter
1. Classification is a fact, not a label.
This is the one people get wrong. Writing "independent contractor" at the top of a document does not make someone a contractor. What decides it is how the relationship actually runs. If you set their hours, supply their tools, direct their methods, require them to work only for you and manage them exactly like an employee, then a Philippine authority can look past the label and apply labour standards regardless of what the contract says.
The honest position for most support roles is that they sit closer to the employee end of that spectrum than founders like to admit. You probably do want them on your hours, in your helpdesk, following your standards. The answer is not to pretend otherwise in a contract. It is to pay properly, give the benefits an employee would get, and treat the classification as something to respect rather than a loophole to exploit. If the arrangement is genuinely employment in all but name, the honest options are an Employer of Record or a partner who employs them for you.
If your contract and your Slack messages describe two different relationships, the Slack messages are the true one.
2. How you pay them is a retention decision.
Bank transfers from a UK account to a Philippine one are slow and the FX spread is worse than it looks. Wise, Payoneer and the contractor platforms all work; what matters is that the amount is predictable, arrives on the same date every month, and does not quietly shrink because of a rate you did not agree. Decide who absorbs the transfer fee and write it down. Agree the currency and stick to it. A payment that lands three days late and 4% short, twice, will cost you a good person faster than a mediocre rate ever would.
3. Data protection, which almost everyone misses.
Here is the step that gets skipped, and it is the one with a regulator attached. A support person reads your customers' personal data. That is the job. If they are in the Philippines and your customers are in the UK or the EU, you are making a restricted international transfer of personal data, and UK GDPR expects you to have a lawful mechanism for it. In practice that means a data processing agreement with the right clauses, plus the appropriate transfer tool for your situation.
None of this is hard or expensive to get right at the start. It is genuinely unpleasant to fix after a subject access request or a customer's procurement team asks where their data is processed. Your privacy policy should also say it. This is the part to take actual advice on, and the only part where we would say do not improvise.
The paperwork, in full
| Document | Why | Fussy? |
|---|---|---|
| Contractor agreement | Scope, rate, hours, notice, IP ownership, confidentiality | No. A good template plus a review. |
| Data processing terms | They handle customer personal data. Non-optional. | Take advice. Worth it. |
| International transfer mechanism | UK GDPR expects one for data leaving the UK | Take advice. |
| Invoice trail | Their BIR registration, your records. Keep every one. | No, but be disciplined. |
| Equipment and security terms | Whose laptop, whose password manager, what happens at the end | No, but write it down. |
What to put in the contract that people forget
- Which public holidays. The Philippines has around 18 a year and they do not map to UK bank holidays. Decide whether they are covered, paid, or a gap in your cover, and say so before month one rather than during it.
- Intellectual property. Macros, help articles, process docs they write for you. Say who owns it. It is a one-line clause and an unpleasant conversation if it is missing.
- Notice, both directions. Contractors can leave on no notice unless the contract says otherwise, and so can you. Neither is what you want.
- What happens to access. Helpdesk, email, password manager, customer data. Write the offboarding step down while you are still in the honeymoon, because you will not want to think about it later.
The realistic effort
A day of setup, mostly getting the contract and data terms right once, then almost nothing. Month two onwards is a monthly payment and a helpdesk licence. The administrative load of a Philippines-based contractor is genuinely lower than a UK employee: no payroll, no pension enrolment, no employer NI, no HR calendar.
That is a real advantage and it is also the thing that tempts people into treating the arrangement more casually than it deserves. The paperwork is light. The obligations underneath it are not, and the person on the other end has a career and a family and a tax return. What that arrangement actually costs, paid fairly, is set out in our guide to what Philippines customer support really costs.