HUSBAND. FATHER. DISCIPLE OF JESUS CHRIST.
ENTREPRENEUR. MEDIOCRE GOLFER.
I’m John Jonas. I live in Utah and I founded OnlineJobs.ph. My life is better because of my Filipino OFS (Online Filipino Specialist). My team.
I had a normal “job” for 8 months after college and my biggest goal at that time was to be able to quit that job. I managed to quit back in 2004 and worked from home for myself ever since then.
When I first hired someone from the Philippines in January of 2006, I knew I was onto something special. Since then I’ve learned that for most people, life is definitely better with Filipino workers on your team.
Yes, because of my Filipino workers I get to play a lot of golf, spend a lot of time with my wife and kids, and get out backpacking in the middle of the week. I work for about 17 hours a week because of the amazing work they do. However it’s not just better for us; it’s better for them too.
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P.S.
I DON’T DO SOCIAL MEDIA…
MY OFS DO IT FOR ME.
Compliance and Taxes with VAs…the real story
It’s SHOCKING how much bad information is online about this!
In researching this (again), I asked Chat and read a bunch of the references.
Everything said compliance was much harder than the attorneys and accountants have said over the years, and different than what hundreds of thousands of our customers have experienced.
Then…I noticed a pattern.
Everything written about compliance for Philippine VAs online is by a company trying to get you to pay them.
Every. Single. Thing.
They’re all trying to get you to pay them for their EOR service. So of course they make it sound like compliance is super hard.
I was shocked and disgusted.
I’ve been hiring VAs in the Philippines since 2006. Here’s what I know about compliance.
1. The Philippines government won’t allow you to consider the VA an employee unless you have a legal entity in the Philippines (you probably don’t…I don’t).
2. They’re an independent contractor. Yes, there are Philippine rules similar to the rules in your country about independent contractors (using your equipment vs theirs, working required specified hours, wearing a uniform or not, requiring them to only work one job for you, …), but I’ve never seen a Philippines VA be turned into an employee (except once in Australia…more on that later).
They’re an independent contractor in the US.
They’re an independent contractor in the UK.
They’re an independent contractor in Canada.
They’re an independent contractor in the EU.
Do I need to keep repeating myself?
3. You don’t withhold taxes. You don’t send them a 1099. You don’t pay insurance. You don’t have to pay any benefits (you might want to…more in a later email). PTO is not required (but it’s nice).
4. You deduct the wages you pay them on your taxes. It’s a subcontractor expense.
We’ve researched this over and over. We’ve talked to attorney after attorney.
Tax treaties prevent you from having to do tax withholding.
In all of this, I’m not an accountant or attorney and am not qualified to give you advice. You should consult yours.
I’m just telling you what I’ve seen hundreds of thousands of times.
When you ask your accountant about this they’re going to freak out and say “You need to be careful, this person might be considered an employee.”
When they say this, push back. Ask “Have you ever seen a VA in the Philippines be classified as an employee?” (I haven’t). “What does the tax treaty say about this?”
Now, the Australia caveat. A couple years ago there was one case in Australia where a government agency decided that a Philippine VA had been wrongly discharged and wrongly classified as an independent contractor. It wasn’t tried in court. It wasn’t made a law. And it hasn’t happened since (in any country I’m aware of). I’m just letting you know what happened. If you’re in Australia this might (MIGHT) apply to you. We have ~60,000 employer customers in Australia, I haven’t heard of any of them doing anything different…doesn’t mean some aren’t.
The bottom line is we’ve seen hundreds of thousands of businesses hire over a million Filipino VAs.
• Independent contractor
• No taxes
• No EOR
• No withholding
• No 1099
John
PS: Every time I’ve seen a company offering EOR (employer of record) services for Philippine VAs, I see them preying on people’s fear and lack of knowledge. I’m not saying EOR’s don’t have their place…I’m just saying with 99% confidence that you don’t need one.
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