What the Fee Does Not Cover
Recruitment, equipment, benefits beyond the statutory floor and most of what makes somebody want to stay.
The service agreement with the provider
The employment contract with the person
Who the employer is in law
What you are buying with the fee
YoursThe provider'sCrosses the twoNeither contract
Four matters, and no share: what any one agreement covers differs by agreement. One crosses both, and the handoff is where these arrangements fail. The distinction everything else in this collection rests on.
The fee does not cover recruitment, equipment, systems, benefits above the statutory floor, management, or anything that makes this particular person want to stay another year.
The handoff described in “What the Fee Does Not Cover” depends on records that both the operating team and payroll owner can understand. When evaluating check the implementation resource for employee monitoring for performance reviews, use project and time data to reconcile work before payroll cut-off, while leaving tax treatment and statutory calculations to the accountable local specialist.
Several of those cost real money and none of them appear in the quote, which is why first-year budgets for this arrangement are routinely wrong.
A broader benchmark for “What the Fee Does Not Cover” is the Slack remote-work guide. Read it alongside the service agreement and employment facts so that general guidance informs, rather than replaces, case-specific judgement.
Finding the person
Sourcing, interviewing, assessing and closing. Some providers sell recruitment as a separate service at a separate price; none include it.
Budget it as you would any other hire in a market you do not know, which usually means higher than at home rather than lower.
Equipment
A laptop, a phone, a monitor, a desk allowance. The provider does not supply these and in many countries you cannot simply ship one without a customs and tax consequence.
Decide the mechanism before the start date: ship, buy locally, reimburse, or stipend. Each has a different tax treatment and the provider will tell you which if asked.
A reimbursement that should have been treated as a benefit in kind is a small error that compounds monthly and surfaces at year end. Settling it once, in writing, takes twenty minutes.
Systems and licences
Accounts, seats, access, security tooling. All yours, all granted by you, all revoked by you.
The administrative work is the same as for an employee. The difference is that the leaving date you act on arrives from a third party, which is covered in its own note.
Benefits above the floor
Private medical cover, pension above the mandatory level, life assurance, extra leave. The provider supplies what the law requires and nothing more unless you buy it.
Some providers offer a benefits package at a price. It is usually worth comparing against buying locally yourself, and the comparison is rarely close in the direction you expect.
The relevant question is not what your people at home receive. It is what a comparable offer in that market looks like, which the provider can tell you and your own benefits team generally cannot.
Bonuses and variable pay
Payable, usually, but as a variable payment the provider processes on your instruction and your money, with a local tax treatment and a payroll cut-off.
The money is yours either way. What the fee does not cover is anybody reminding you that the cut-off is on the eleventh.
Anything resembling management
Setting work, reviewing it, correcting it, developing the person, deciding whether they are good. None of it is bought and none of it is offered.
A provider that appeared to offer it would be selling you a relationship it cannot have, since it does not see the work.
Keeping the person
Whether this person is still here next year. No clause, no fee, no owner.
The most common failure in these arrangements is a good person leaving in month nine, and nothing in the commercial relationship was ever pointed at preventing it.
Immigration, usually
Visas and work permits are frequently excluded or priced separately, and in several countries an employer of record cannot sponsor at all.
Establish this before you make an offer to somebody who needs sponsorship. A withdrawn offer in a small market is remembered.
Your own tax position
Whether your activity in that country creates a taxable presence is assessed against you. The provider's employment of the person does not answer it and the agreement does not address it.
That question has its own note. It is the exposure buyers most often discover last.
The gap between the quote and the budget
Service fee plus employer costs is the quote. Add equipment, software, recruitment, any benefits you intend to offer, the deposit, and the cost of the time somebody will spend administering it.
Work that figure out before the business case rather than after:
- Service fee for twelve months.
- Employer contributions and any mandatory bonus.
- Recruitment, at local rates.
- Equipment, software and licences.
- Any benefit you intend to offer above the floor.
- The deposit, and the cost of the money sitting there.
- The time somebody in your company will spend on it.
The arrangement is still usually worth it. It is simply more expensive than the comparison table implies.
Asking the provider what is excluded
An ordinary question with a short answer, and the quality of the answer is informative. A provider who lists the exclusions plainly is easier to work with later than one who defers.
Ask it in writing before signature and keep the reply with the agreement.
What nobody can price in advance
How much of your own time this will take. Some arrangements run for two years on an hour a month; others consume a day a week because a country is awkward, a provider is slow or a person is unhappy.
Nothing in the quote distinguishes those cases, and no provider can tell you which you will have. The honest planning assumption is that the first six months cost more attention than the steady state, and that the steady state only arrives if somebody is paying attention during those six months.