How to Negotiate Offshore Hiring Rates (Without Underpaying)

Frank Kight

July 27, 2026

You negotiate offshore hiring rates fairly by benchmarking to the talent's local market in the Philippines or South Africa, not by cutting down from Australian or New Zealand salaries. Fair pay is what delivers Pear Tree's 90% retention rate, while underpaying drives the turnover that erases your savings. Real savings of 50–80% come from the currency difference and removing agency markup, not from paying people less than they are worth.

In short

Fair offshore rates start from the talent's local market in the Philippines or South Africa, not from a discounted Australian or New Zealand salary. Anchor to the local range and pay at or above it. Your savings of 50–80% come from the currency gap and from removing the agency markup of three to five times what talent earns, not from underpaying. Fair pay is what drives Pear Tree's 90% retention rate, against a 60% industry average, and retention is what protects your savings. Negotiate scope, seniority, hours and commitment before you touch the base rate, and benchmark against real local data so every rate is fair, competitive and defensible.

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How do you set a fair offshore rate without underpaying?

You set a fair rate by starting from what the role pays in the talent's own market, then positioning at or slightly above it. A skilled bookkeeper in Manila or a developer in Cape Town has a local market rate, and paying at the top of that range costs a fraction of an Australian or New Zealand salary while still being genuinely competitive where the person lives.

The mistake first-time employers make is anchoring to the local ANZ salary and negotiating downward. That framing treats offshore talent as a discount rather than a hire, and it pushes rates below the local market. Anchor instead to the Philippine or South African market, and both fairness and savings follow naturally.

Where do offshore savings actually come from?

Offshore savings come from the currency and cost-of-living gap and from removing the agency margin, not from underpaying anyone. A wage that sits comfortably above the local market in the Philippines still converts to a fraction of an Australian salary, which is why savings of 50–80% and fair pay are not in conflict.

The second source of savings is the model. Traditional agencies and BPO providers mark talent up three to five times what the worker actually earns (Outsource Accelerator 2024), with the difference disappearing into the middleman. Pear Tree uses a direct-hire model with full transparency over what the talent earns, so the money you save is margin you are no longer paying to an agency, not pay you are taking from the person doing the work.

What should you pay offshore talent in the Philippines and South Africa?

Pay at monthly rates that reflect the role and seniority in the local market. The table below shows typical Pear Tree offshore rates against Australian and New Zealand salaries, so you can see both the saving and the level a fair rate sits at.

Fair offshore rates vs local ANZ salaries
Role	Pear Tree offshore (AUD/month)	AU local (AUD/year)	NZ local (NZD/year)	Saving
Virtual Assistant	$1,400	$55,000–$65,000	NZ$48,000–$55,000	Up to 70%
Customer Service Rep	$1,300	$50,000–$65,000	NZ$45,000–$55,000	Up to 76%
Bookkeeper	$1,400	$55,000–$70,000	NZ$50,000–$62,000	Up to 76%
Graphic Designer	$1,500	$60,000–$80,000	NZ$52,000–$68,000	Up to 78%
Digital Strategist	$1,400	$75,000–$100,000	NZ$65,000–$85,000	Up to 83%
Full-Stack Developer	$2,800	$100,000–$140,000	NZ$90,000–$120,000	Up to 76%

Sources: Pear Tree placement data (verified April 2026), ABS (2025), SEEK NZ (2025). Offshore figures are fair local-market rates, not floors to negotiate beneath.

Treat the offshore figures as fair-market rates, not floors to push beneath. Going materially below these levels is where employers move from cost-effective into underpaying, and that is where retention starts to break.

Does underpaying offshore staff cost more in the long run?

Yes. Underpaying offshore staff costs more because it drives turnover, and turnover is expensive. The offshore industry average retention rate is around 60% (Outsource Accelerator 2024), while Pear Tree holds 90%, and the difference is largely about paying fairly and treating people as part of the team.

The maths is straightforward. Recruiting, onboarding, and training a replacement consumes weeks of lost productivity, and effective onboarding alone lifts retention by 82% and productivity by 70% (BambooHR 2024). Saving AUD$100 a month by lowballing a hire who then leaves in three months is a false economy. A fairly paid person who stays for years is the cheaper outcome by a wide margin.

What can you negotiate besides the base rate?

Plenty, and these levers protect fairness better than squeezing the salary does. Scope and seniority are the biggest: a mid-level designer costs less than a senior one, so match the level to the actual work rather than paying for seniority you do not need or discounting a senior person's rate.

Other fair levers include full-time versus part-time hours, the mix of responsibilities in the role, and the length of commitment. Offering stability and a clear growth path is often worth more to strong candidates than a marginal rate change. Local benefits also matter: in the Philippines, 13th-month pay and health cover (HMO) are normal expectations, and factoring them in signals you understand the market.

How do you benchmark a fair rate before you negotiate?

Benchmark against current local salary data for the Philippines and South Africa before you name a number. Pear Tree publishes salary guides for both markets, and using real local ranges means you enter the conversation with a rate that is fair, competitive, and defensible rather than a guess anchored to ANZ pay.

Come prepared with three figures: the local market range for the role, where in that range the candidate's experience sits, and your all-in budget including any local benefits. Negotiating from data rather than from how low you can go keeps the discussion professional and lands you a hire who feels valued from day one.

How does Pear Tree keep rates fair and transparent?

Pear Tree keeps rates fair through full transparency over what the talent earns and a direct-hire model with no hidden agency markup. You see what the person is paid, so there is no guessing whether a fair rate is reaching the worker or being absorbed as margin, which is the core problem with the traditional agency model.

Pear Tree screens 200–400 applicants per role to shortlist 3–5 candidates and advises on fair local rates for each one, drawing on placements with 750+ companies across Australia and New Zealand. Fair pay is not charity here; it is the mechanism that produces a 90% retention rate and protects the savings you came for.

Key takeaway

Negotiating offshore hiring rates well means benchmarking to the Philippine or South African market and paying at or above it, then finding savings through currency and the removal of agency margin rather than through underpayment. Done this way, an Australian or New Zealand business captures 50–80% savings and the retention that makes those savings stick. Underpaying saves a little today and costs far more when the person walks.

AUTHOR BIO: Frank Kight is Co-Founder of Pear Tree, a direct offshore talent placement company helping Australian and New Zealand businesses hire world-class Filipino and South African professionals, without the agency markup. Frank leads operations and talent sourcing across the Philippines and South Africa, and works with clients on setting fair, competitive rates that keep talent for the long term. With offices in Sydney, Auckland, Cebu, Manila, Cape Town, and Hawke's Bay, Pear Tree has placed talent with 750+ companies and maintains a 90% retention rate.

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