Source: https://rivet.global/blog/australia-startups-offshore-teams-philippines-india
Published: 2026-10-22 · Updated: 2026-10-22 · By William Sunjo M.

# Australian startups with offshore teams in the Philippines and India: contractors, EOR and payments

Many Australian startups build teams in the Philippines and India. Contractor or employer of record, the ATO's records, and paying in local currency.

## Key takeaways

- Australian startups commonly build teams in the Philippines and India, as contractors or through an employer of record.
- Contractors abroad can be reclassified as employees under their own country's law if they work like employees.
- An employer of record employs the person locally and invoices the startup, taking on local payroll and compliance.
- Paying contractors in pesos or rupees on local rails delivers the agreed amount.

A Sydney fintech has 18 people offshore: eight developers in Manila, six designers and analysts in Bengaluru, and four customer support staff in Cebu employed through an employer of record. The developers and designers invoice monthly as contractors. The support staff are on the EOR's local payroll, and the EOR invoices the fintech.

## Contractors or EOR

Contractors suit project-based, independent work: defined deliverables, own tools, own hours, other clients allowed. The startup pays their invoices.

Employers of record employ people locally and handle payroll, benefits and local compliance, invoicing the startup a fee on top of employment costs. They suit people who work full time, under your direction, for the long term.

Misclassification is judged under the worker's local law. In the Philippines and India, long-term, exclusive, full-time contractor arrangements can be treated as employment.

## Records for the ATO

For contractor payments, keep:

1. The contract.
2. Each invoice.
3. Proof of payment and the exchange rate used.

These support the deduction in the startup's tax return.

## Paying in local currency

AUD by SWIFT to Manila or Bengaluru is converted by the contractor's bank, often with fees. Paying pesos and rupees on local rails delivers the invoiced amount. Indian contractors' banks need a clear purpose on each payment, such as "software development services", to classify it as an export of services.

## Paying into Australia: the local rail

| What | Detail |
|---|---|
| Local rail | New Payments Platform (Osko and PayID) |
| Run by | NPP Australia |
| Settlement | Seconds, 24/7 |

Direct Entry (BECS) still carries batch payroll and supplier runs, settling several times a day.

Source: [NPP Australia](https://nppa.com.au/). Checked when this guide was last updated; the scheme's own page has the current figures.

## Where Rivet fits

A Rivet business account pays contractors in 120+ countries, including the Philippines and India, in local currency where available. Bulk payouts send the month together, rates show before you confirm, and from the Growth plan a second approver can be required. Rivet is not a bank; regulated partner institutions hold the funds.

See [pay contractors in the Philippines](/blog/pay-contractors-in-the-philippines).

## Questions

### Should we use contractors or an EOR?

Contractors suit independent, project-based work. When people work full time under your direction for a long period, an employer of record reduces misclassification risk.

### What does the ATO expect for offshore contractor payments?

Records showing the payment was a business expense: contracts, invoices and proof of payment, with the exchange rate used.

### How do Indian contractors receive payments?

In rupees, through their bank, which needs a clear purpose to classify the payment as an export of services.

### How do Filipino contractors prefer to be paid?

Usually pesos to a bank account or e-wallet. Ask and record it.