The true cost comparison: In-house vs offshore accounting team

For many U.S. companies in 2025, hiring and retaining accounting talent has become increasingly expensive and increasingly competitive. 

The U.S. continues to face a well-documented accounting labor shortage: fewer students are graduating with accounting degrees, CPA exam participation remains at a historic low, and existing professionals are switching careers or moving into higher-paying sectors. 

As a result, salary expectations have risen sharply, and even entry-level positions often take months to fill. With persistent talent shortages, rising wages, and higher turnover, companies are now spending significantly more to fill roles that used to be considered routine.

Against this backdrop, outsourcing accounting tasks offshore has shifted from a cost-saving tactic to a mainstream workforce strategy. 

Globally, the finance and accounting outsourcing market is projected to reach $146 billion in 2025, and about 90% of CFOs report that they already outsource at least some finance functions or are planning to expand outsourcing to address capacity gaps (Deloitte, 2025). 

Yet despite its widespread use, many business leaders still ask the same question: How does a full-time offshore accountant compare to an in-house hiring relative to cost, productivity, and overall business value?

This article breaks down the real numbers and operational considerations, focusing on the Philippines, the leading global destination for outsourced accounting talent.

Salary comparisons: Where the gap begins

United States

In the U.S., the median annual salary for accountants and auditors reached $81,680 in May 2024 (BLS, 2025). Salaries for mid-level roles typically fall between $60,000 and $78,000, but this number jumps quickly for specialized work. 

Robert Half’s 2025 Salary Guide lists senior accountants at $86,000–$110,000, accounting managers at $100,000–$137,000, and controllers between $125,000 and nearly $200,000. 

Wage inflation in the accounting sector was estimated at 6–9% annually from 2023 to 2025, one of the fastest rates among professional services roles.

Europe

European salaries remain lower than in the U.S. but are still substantially higher than offshore alternatives. UK accountants earn $46,000–$65,000, and those in Western European countries such as Germany, the Netherlands, and France average $45,000–$70,000 (Robert Half, 2025). 

These figures continue to face upward pressure due to the region’s own talent shortages.

Philippines

Meanwhile, in the Philippines, an experienced accountant earns approximately ₱360,000–₱420,000 per year (roughly $6,500–$7,500) (Payscale, 2025). Senior accountants and supervisors generally fall into the $10,000–$14,000 range. 

One direct comparison shows a U.S. accountant earning $67,190 versus $7,020 in the Philippines—a 91% difference before benefits or overhead are added (Payscale, 2025).

Put simply: the cost of one mid-level U.S. accountant can fund an entire offshore accounting team of 6–10 people, depending on experience levels.

Productivity, efficiency, and time zone advantages

Salary gaps tell only part of the story. Productivity differences also influence total value.

Work hours and availability

Both U.S. and Philippine accountants work 40 hours per week (BLS, 2025). However, Philippine accountants typically work night shifts aligned with U.S. time zones. This alignment allows companies to operate continuously:

• Work completed overnight in the U.S.
• Faster month-end closing cycles
• Real-time collaboration during U.S. office hours
• Ability to process backlogs while domestic teams sleep

This coverage model mimics the benefits of a larger team without the corresponding cost.

Process optimization and automation

Large outsourcing providers have standardized processes and invest heavily in automation tools. 

According to PwC’s 2025 finance outsourcing report, teams leveraging automation—such as AP workflow systems, auto-reconciliation tools, and cloud-based dashboards—achieve 30–50% faster processing times compared to traditional in-house workflows.

For many small and midsized businesses that rely on manual processes or outdated systems, this represents not just cheaper labor, but a measurable productivity boost.

The hidden costs behind U.S. hiring

Hiring in-house involves far more than salary. The true cost of an employee often surprises companies when all factors are included.

1. Benefits and taxes

U.S. employers spend an additional 30–36% of salary on benefits such as healthcare, paid time off, and payroll taxes. A mid-level accountant earning $80,000 often costs $104,000–$110,000 after benefits.

2. Office space

Commercial rental costs in major cities averaged $38–$58 per square foot in 2024–2025 (JLL Research, 2024–2025). Even with hybrid work, companies continue paying for office capacity. One employee’s required space (120–150 sq. ft.) adds $5,000–$8,000 per year in rent alone.

3. Equipment and software

A standard workstation with monitors, VOIP phone, security tools, and accounting software typically ranges from $2,000–$4,000 per employee annually, including support and licensing.

4. Recruitment and turnover

Replacing an employee costs 20–30% of annual salary. Accounting turnover is notably high—around 12–14% per year, driven by burnout, long hours, and competitive offers (Robert Half, 2025).

This means companies pay thousands of dollars just to refill the same position over and over.

Offshore cost structure: Predictable and scalable

Offshore teams dramatically reduce overhead because providers bundle most expenses. Employers pay a fixed monthly fee that includes:

• Hardware and workstation
• Software subscriptions
• IT support
• HR and administrative services
• Training and upskilling
• Facility costs
• Security infrastructure

In the Philippines, statutory benefits add 10–15% to salary—far below U.S. levels.

Scalability

Offshore teams allow businesses to scale operations quickly during busy seasons (such as tax time), take on new projects, or expand service lines without the long-term financial commitment of domestic hiring.

Why the Philippines is the global leader

The Philippines dominates the global accounting outsourcing market for several reasons:

• English proficiency: One of the highest in Asia.
• Familiarity with U.S. GAAP: Many accountants train directly under U.S.-aligned standards.
• Strong talent pipeline: Over 240,000 new accounting and business graduates annually.
• Cultural alignment: Westernized communication and work culture.
• Cost advantage: A supervisor earning $11,000–$13,000 versus $89,000 in the U.S. represents an 87–90% cost reduction.

Real savings for U.S. companies

A fully loaded U.S. accountant costs approximately $114,000 per year:

• Salary: $80,000
• Benefits: $24,000
• Office + equipment + software: $10,000

A Philippine accountant with similar experience costs $8,000–$11,000 annually.

That’s a 92% direct savings, and even after adding management oversight, communication tools, and occasional travel, companies still save 50–80%.

For many CFOs, these savings are transformational—allowing them to reinvest in growth, technology, and revenue-generating functions.

Adopting a hybrid offshore accounting model

From both a financial and operational perspective, offshore accounting teams deliver clear advantages. As U.S. salaries rise, talent shortages worsen, and compliance grows more complex, the gap between domestic and offshore teams will only widen. 

Hybrid models—such as an onshore controller managing a small offshore team—are now considered best practice for many mid-sized companies.

For startups, SMEs, and even established mid-market firms, offshore accounting has evolved from a budget tactic into a strategic advantage. It offers cost savings, scalability, and the stability needed to support long-term growth.

References

Deloitte. (2025). Global shared services & offshoring trends report. https://www2.deloitte.com/

JLL Research. (2024–2025). Commercial office rent market update. https://www.jll.com/research

Payscale. (2025). Accounting salary data for the Philippines. https://www.payscale.com/

PwC. (2024–2025). State of finance talent and outsourcing report. https://www.pwc.com/

QuickBooks & Xero. (2025). Pricing guides. https://quickbooks.intuit.com/ https://www.xero.com/

Robert Half. (2025). Salary guide for accounting and finance professionals. https://www.roberthalf.com/salary-guide

SalaryExplorer. (2025). Finance and accounting pay benchmarks in the Philippines. https://www.salaryexplorer.com/

U.S. Bureau of Labor Statistics. (2025). Occupational employment and wage statistics: Accountants and auditors. https://www.bls.gov/oes/