John Jonas breaks down annual costs for benefits Filipino virtual assistants typically receive: government programs, private health insurance, and how contributions affect maternity pay and pensions. Small employers can start with basics and add benefits gradually as they grow.
Questions this video answers
Approximately US$600 per year (depends on salary).
Approximately US$85 per year.
About US$400 per year (employer-paid cap; employees may top up).
About US$40–45 per year (roughly 200 PHP/month is mentioned as a common contribution).
About US$1,100–US$1,200 per year (combined estimate).
Chapters
Welcome to the Secret Sauce of Outsourcing podcast that's dedicated to making you better at working with OFS online Filipino specialists. This is episode 179, how much do benefits cost? A while ago I did a. I had a podcast episode about some benefits that we pay or benefits that you could pay to your ofs. And I got a lot of responses about that podcast and about the newsletter saying like, how much does this cost per year? Or give me a ballpark. So that's what I'm going to do today. Today I'm going to give you a ballpark cost, like back of the napkin math of how much benefits can or should cost for an OFS per year. I'm going to go through the cost and what they are really quickly and then I'll talk through these. So number one, SSS is like $600 a year. So that's basically like another month of salary and that's Philippine Social Security. PhilHealth is like $85 a year, so it's not very much. Health insurance, we pay about 400 do per year per person. And philhealth and health insurance are different things. Health insurance is their socialized medicine and it really is just like, like they decrease the cost of your bills. Whereas health insurance, like private health insurance, is actually like, it pays for their health care. And then poggibig, which is their housing fund, it's a government housing fund, is like 40, $45 a year, pretty, pretty cheap. So the total cost of these things, like, like $1100, 11 to $1200 per year. Now this will depend on how much you're paying the person, because our SSS is completely dependent on how much they make. So if depending on what they're making, it's going to be more, it's going to be less. And how much they pay will also affect the benefits they get from it. So like maternity leave, if they're paying their SSS premiums. Well, what they get from maternity leave is based on how much they're paying. So how much you pay into SSS tells the government, here's how much I'm making. And so if you get maternity leave or paternity leave, then what the government's going to give you from that is going to be based off of how much you're paying in. So that number can go up or down depending on how much they contribute. And they could contribute more than they're required to. They can contribute less and say that they're making less, eventually it'll affect their pension when they retire the pagibig. So this is the Philippines like government sponsored loan program and some of my, some of my people pay into it. It's like a contribution, it's like 200 php per month which is pretty low. It's like less than US$4 per month. It allows them to take a home loan from the government and then also to withdraw their like contributions with dividends after 20 years. So the Puggybig is kind of like a savings plan but it also has this loan benefit where you go to buy a house, you get a loan from the government. Because you've been paying into it, you're entitled to getting a loan. So the rule of thumb for these two things, SSS and Puggybig is the maximum you can contribute per year is 13% of your salary for SSS and 4% of your salary for Poggibig. Now those are maximums like if people want to contribute more because they're going to get more benefits down the road, the minimum required. There's a scale for it that we'll link to in the description here that like oh, if you're making this much then you need to be paying this much. So let's talk about health insurance now. So health insurance most we, when we started providing private healthcare to our team we let our actually we went around and we searched all these providers and we ended up with Value care for our entire team. And that was what we decided in the beginning. Everybody's going to use value care. They quoted US$400 a month per person. And so that's what we did. We signed everyone up for value care. It turned out that like value care wasn't, it wasn't super great in some areas of the Philippines. And so like some hospitals didn't want to take it. And so we ended up deciding to let all of our team members choose their own. And then we set a price of like we'll pay $400 a year for your health care for your private health insurance and then if you want to choose something that costs $600, well you're gonna pay the extra $200. We've also seen like cheaper things like even down to like $150 per year for health insurance. Now the benefit obviously is dependent on the amount that you pay. So the more you pay typically you're going to get more benefit from it. They're going to pay for more, your limits are going to be higher. You're going to get a private room instead of a shared room. When you Stay a night in the hospital. And that's the Philippines. Health insurance plans are pretty straightforward. It's like which do you want? Do you want a general room where like there's a bunch of beds or do you want a shared room with a bunch of beds or do you want a private room with a bunch of. A private room, sorry, a shared room with just two beds. A private room where it's just you. Or like a private room suite and that, that's kind of how they do it. And it's just the price tiers go up with those and the maximum amount, the maximum payout amount goes up with each of those things. So like a private room suite will have like a 2 million php per year maximum payout and a private room will have like a 1.5 million maximum payout and a shared room will have a 1 million maximum payout. Something like that. That's typically how it is. They're pretty simple. It's not like programs in the US where you get all kinds of craziness within the health care system here. So now about payments. So we generally pay their health insurance twice a year. So we will pay, we'll reimburse them in January and then in June or July or that could be different depending on when they signed up and when their premiums are due. But we pay them twice a year for their insurance and then we typically pay quarterly for the other things. So For SSS and PhilHealth and PocketBank we would pay them quarterly and that way they can make their contributions quarterly and it's not every single month which is easier for us. And it works out. We don't give these things right off the bat to someone. Typically we want someone to work for us for three to six months before we're willing to give it to them. And that three to six months kind of depends on how much do we trust this person. You know, if they're a family member of someone we already have working for us, well, we trust you pretty dang well and we're probably going to start paying it earlier. If you're a new recruit and we don't trust you super well yet, then we're going to wait a little bit longer. But we try and pay these things as quickly as we can generally because we want to take care of our people. So if you want more, we have a blog post that'll be linked in the description below or where I write about all these things and you can get more about the benefits. There's also we're going to have a really big, big comprehensive benefits post coming up that we're working on right now that'll detail all of these things for you and it'll put them all together into one and should be really, really helpful. So let me just say again, none of this is required. I talk about this because people want to know, but if you're just starting, do not let this push you off. Like, oh, there's one more complication. You don't need to do this. It's not required. This is something that we didn't do for years. It wasn't until we kind of started to realize, oh yeah, we should take better care of our people that we started just to explore some of these things. Then they came on one at a time and when we started making more and more money, we started adding more and more things to them. So don't feel like you need to pay all this stuff all at once.
