What a Virtual Assistant vs an Employee Actually Costs

Two numbers are open on your screen. One is an agency quote for a virtual assistant: $1,400 a month for 20 hours a week, invoiced, 30 days’ notice. The other is what the person who answered your job ad wants: $24 an hour, part-time, three mornings. You cannot compare them, because one is a price and the other is a wage.

To compare a virtual assistant against an employee honestly, convert both to cost per hour actually worked. For a US part-time employee that means adding roughly 16% to 25% on top of the hourly rate; for a full-time US employee, roughly 22% at the bare statutory minimum and about 46% at private-industry average benefit levels. In the UK the additions are employer National Insurance at 15% above £5,000 a year, a 3% pension contribution, and 5.6 weeks of paid holiday you are buying but not receiving. Do that conversion and most of the argument settles itself. What it does not settle is whether the cheaper number buys the thing you actually need.

What follows is general information, not legal, tax or employment advice. Figures are current as of September 2026 and stated with their source dates.

Put both options on the same footing first

The unit is cost per hour actually worked. Not per hour paid, not per month, not per head. A contractor invoices for hours delivered; take a fortnight off and you do not pay for the fortnight. An employee is paid for holiday, public holidays, sick days and the Tuesday the internet went down, and those paid-but-not-worked hours hide inside the headline rate.

So: annual wage bill, plus employer taxes and insurance, plus benefits, plus equipment and per-seat software, divided by the hours you actually get. Then, separately, your own management time, which is the line nobody writes down and which decides more of these cases than the money does.

The employer load, worked out twice

The United States

Stop guessing at a multiplier. The Bureau of Labor Statistics measures this directly in Employer Costs for Employee Compensation, and the June 2026 figures were published on 9 September 2026. Across private industry, employers spent $46.89 per hour worked: $32.82 in wages and $14.07 in benefits, a 70/30 split. By schedule it sharpens. Full-time private industry workers cost $54.00 an hour worked, $36.97 of it wages and $17.03 benefits; part-timers cost $25.20, $20.15 wages and $5.05 benefits.

As a load on top of the wage, which is what a budget needs:

Full-time: $17.03 of benefits on $36.97 of wages is a 46% uplift.
Part-time: $5.05 on $20.15 is a 25% uplift.
Statutory floor only (legally required benefits plus paid leave, stripping out health insurance, retirement and supplemental pay): full-time $8.16 on $36.97, a 22% uplift; part-time $3.20 on $20.15, a 16% uplift.

The floor matters because the average includes employers who provide health coverage and a retirement plan. Provide neither and you sit on the floor. Legally required benefits alone ran $3.40 per hour worked, of which $2.79 was Social Security and Medicare and $0.43 workers’ compensation: the employer share of FICA is 6.2% up to a $184,500 Social Security wage base in 2026 plus 1.45% for Medicare, and federal unemployment tax is 6.0% on the first $7,000 of wages, an effective 0.6% where the full state credit applies, about $42 a year per head.

One oddity is worth keeping. Legally required benefits came to 11.4% of wages for part-timers against 10.2% for full-timers, because unemployment tax and much of workers’ compensation is charged against a flat wage base per person. A five-hour-a-week employee triggers the same $42 of FUTA as a forty-hour one.

Worked example: 20 hours a week at $23.23 an hour, the BLS May 2025 median for secretaries and administrative assistants.

Wage bill: 1,040 paid hours x $23.23 = $24,159
Legally required benefits at the measured part-time ratio of 11.4%: $2,754
Modest paid time off at the part-time average of 4.5% of wages: $1,087
Total about $28,000, before equipment or recruiting, for 980 hours actually worked after 60 hours of holiday and sick
Cost per worked hour: $28.57 against a headline of $23.23

The same 20 hours from a VA at $12 an hour is $12,480, with no gap between paid and worked hours because you buy the hours you get. The cash difference is roughly $15,500 a year. Hold onto that; it gets eaten later.

The United Kingdom

Three lines, plus a rebate most first-time employers do not know exists. For 2026 to 2027, employer (secondary) Class 1 National Insurance is 15% on earnings above £96 a week, £417 a month, £5,000 a year. The National Living Wage for those aged 21 and over is £12.71 an hour, £10.85 for ages 18 to 20. Automatic enrolment catches anyone earning over £10,000, at an employer minimum of 3% of the qualifying earnings slice between £6,240 and £50,270. Statutory holiday is 5.6 weeks, pro-rated. Statutory Sick Pay is up to £123.25 a week for as long as 28 weeks, paid by you.

Worked example at £14 an hour for 20 hours a week:

Wage bill: 1,040 hours x £14 = £14,560
Employer NI: 15% x (£14,560 – £5,000) = £1,434
Pension: 3% x (£14,560 – £6,240) = £250
Holiday: 5.6 weeks x 20 hours = 112 paid hours you do not receive, leaving 928 worked hours
Cost per worked hour: £17.50 against a headline of £14, a 25% uplift

Now the rebate. Employment Allowance takes up to £10,500 off an eligible employer’s annual NI bill, and since April 2025 the old £100,000 cap on prior-year liability no longer excludes anyone. Claim it and that £1,434 goes to zero, dropping the cost per worked hour to £15.96: a 14% uplift, not 25%. The catch is the single-director rule. A limited company whose only person paid above the secondary threshold is a director cannot claim; hire one part-timer above that threshold and in most cases you can.

Worth saying plainly, because it is counterintuitive: for a UK small business making its first proper hire, employer National Insurance on a part-time salary is often zero. The standard “employees cost 30% more” line overstates the UK badly at small scale. What it understates is holiday, which never goes away.

Scale up. A £28,000 full-time salary at 37.5 hours carries £3,450 of employer NI and £653 of pension, with 210 hours of holiday out of 1,950 paid: £16.47 per worked hour with the allowance claimed, £18.45 without, against a headline of £14.36. In the US, a $50,000 salary runs to about $61,000 at the statutory floor and roughly $73,000 at private-industry average benefit levels.

What the cheaper number does not buy

Cost per hour is where the comparison starts, not where it ends, because the two arrangements sell different things. A part-time VA is running four or five clients, and you are not the only person who messaged at 9.40am. Whatever the contract promises on response time, the real behaviour is triage, performed by somebody with no way of knowing whose work is more urgent. That is economics, not character. A freelancer working 30 hours a week for you behaves like an employee; one working six behaves like a freelancer.

Context is the second thing money misses. An employee picks up by osmosis that this customer always disputes the first invoice and that the Thursday delivery slot is the one that slips. A VA on 20 hours across five clients accumulates that far more slowly and loses it faster.

Then cover. If your VA is unreachable for a fortnight, usually nothing happens, which is another way of saying everything stops. An agency or BPO buys a named replacement and continuity of process, and that is most of what the margin pays for. An employee gives you notice periods, a handover you can require, and obligations running both ways. None of that exists in a rolling 30-day contractor agreement. Data access cuts the other way: a contractor holding your CRM login alongside five other clients is a wider exposure than an employee with the same credentials, so keep credentials in a vault you own.

Work a contractor arrangement genuinely should not be doing

Some jobs are employee jobs, and no rate makes a contractor the right shape for them. The tests turn on substance, not paperwork. The IRS weighs behavioural control (do you direct what is done and how), financial control (who supplies tools, how payment works, whether the worker can profit or lose) and type of relationship (permanence, benefits, whether the work is a key aspect of your regular business). UK status turns on similar ground: personal service, control, mutuality of obligation. In both places the label on the agreement is weak evidence. Four categories of work reliably fail:

Holding authority over your other people. If the role supervises, schedules or appraises your staff, it is an employee role. Line management by a contractor is one of the clearest control signals there is, and it raises a real question about who those employees work for.
Minute-to-minute direction. Fixed start times, mandated breaks, being told the order to work in and which software to open. If you need that much control, buy it properly.
Representing you in a way that creates liability. Signing on your behalf, appearing to customers or regulators as your staff, making commitments that bind you. Liability does not read the contract header before it attaches.
Regulated tasks where a regulator expects supervision. Clinical documentation, handling client money, anything under a licence you personally hold. The compliance regime usually assumes a supervised person inside the entity, and a third-party invoice does not satisfy it.

The work VAs do well is the mirror image: defined, repeatable, outcome-measurable. Inbox and calendar to a standard, list hygiene, research to a brief, first-line email from a script, bookkeeping prep. If you can describe done, you can contract it out.

The virtual assistant cost that never reaches the spreadsheet

This is the part that makes the cheap option expensive.

An employee absorbs ambiguity. Say “sort the supplier invoices” and a competent local hire works the rest out by watching, asking and being in the room. A remote contractor cannot. Everything they need has to be written down, which means you write it, and that is not a one-off setup tax. It is the operating model.

Price it honestly. Thirty hours documenting the processes you are handing over, front-loaded into weeks one to six, plus two hours a week of review and questions once it runs. About 134 hours in year one. At $100 an hour for your own time that is roughly $13,400, against a cash saving of $15,500. Year one is close to a wash.

Two things follow. The VA route pays off in year two, when the documentation exists and management drops to an hour a week. And if you will not do the documentation, do not take the route; you will get a bad result and blame the wrong thing. Almost everyone who reports that VAs do not work for their business tried to delegate without writing anything down.

One asymmetry favours the VA. Documentation survives the person leaving; knowledge an employee keeps in their head does not, and if your employee of three years resigns on Friday you find out on Monday how much of the business lived in one memory.

At 5, 15 and 40 hours a week the answer changes

Hours are the axis the arguing usually misses, and the comparison flips twice along it.

Five hours a week. A VA, and it is not close. Fixed costs do not scale down: the same laptop, the same recruiting effort, the same $42 of FUTA, the same onboarding. A five-hour employee is administrative burden wrapped around almost no output, and you will struggle to attract anyone good to the job. A VA at $12 an hour costs about $3,100 a year. Expect low priority and scope the work so that is survivable.

Fifteen to twenty hours a week. The contested middle, where the work decides rather than the money. The cash gap is roughly $15,000 a year in the US example above, less in the UK once Employment Allowance is claimed. Employee if the work needs presence, authority or judgment under ambiguity. VA if it is documented, asynchronous and measurable. Torn? The deciding question is whether you can write the process down this month.

Forty hours a week. Two things happen together. The money gap gets large, a full-time VA at $12 an hour being around $25,000 against $61,000 to $73,000 for a $50,000 US employee, and the classification risk gets serious. Someone working full-time hours, exclusively for you, on your systems, in your core business, for years, will look like an employee to anyone who examines it. This is where an employer of record earns its fee: a legal employment relationship in their country, statutory benefits, and the question closed.

A ten-minute decision test, and the answer most people land on

Take the role and answer these. Any yes in the first group means employee.

Does this person need to direct or supervise anyone else on your team?
Do you need to control when they start, when they break and the order they work in?
Will they represent you to customers or regulators in a way that binds you?
Does the work touch anything regulated under a licence you hold?
Would a two-hour delay in a reply cost you real money?
Will this be full-time, exclusive and ongoing beyond a year?

Then the other side. Three yeses here and the VA route is the better buy: can you write the process down so a stranger could follow it? Is the output measurable without watching the work happen? Can it wait four hours? Is it under 25 hours a week? Can you find 30 hours in the next six weeks to document it?

Most small businesses land on neither pure option. They put one part-time VA on the documented, asynchronous work, keep the judgment-heavy and customer-facing work with the owner, and add a local part-timer only when something genuinely needs presence or authority. That hybrid is not a compromise anyone planned. It is what you get from sorting work by its properties rather than sorting people by their price, and it is usually right.

One honesty check before you decide: the cheap option is not always cheaper. A $12-an-hour VA who eats six hours of your week costs more than a $24-an-hour local part-timer who eats one, and you pay it in the currency you have least of.

If you would rather not carry the documentation and cover problem yourself, that is a reasonable thing to buy. AB7 Solutions places remote professionals through contract staffing and staff augmentation, where the role comes with defined scope, documented handover and a named continuity arrangement rather than a 30-day invoice and hope. To talk through the shape of the role before you commit to it, call +1 321 341 7733, email ab@ab7solutions.com or director@ab7solutions.com, or see what the team covers at www.ab7solutions.com.

Questions that come up next

Can I start someone as a contractor and convert them later? Yes, if the trial is genuinely a trial: limited hours, defined deliverables, no exclusivity, three to six months. It stops being sensible when “later” keeps moving. Put the review date in writing at the start, and treat full-time exclusive hours as the trigger to convert rather than a state you drift into.

Does an agency or BPO remove the classification risk? Largely, because the agency is the employer and you are buying a service. It does not remove your data protection obligations, and it does not remove the control question if you start directing the individual as though they were your staff. Read what the agreement says about who supervises, then behave consistently with it.

How do I compare an agency’s monthly price to an hourly rate? Divide the monthly fee by contracted hours, then compare against your employee cost per worked hour, never the headline wage. The $1,400 for 20 hours a week at the top of this article is about $16.15 an hour: below the $28.57 all-in cost of the $23.23 local part-timer, above a $12 direct freelancer. That is the three-way comparison almost nobody runs.

Sources: US Bureau of Labor Statistics, Employer Costs for Employee Compensation, June 2026 (released 9 September 2026); BLS Occupational Outlook Handbook, secretaries and administrative assistants (May 2025 medians); IRS Topic no. 751, Social Security and Medicare withholding rates and Topic no. 759, Form 940 and FUTA; GOV.UK, Rates and thresholds for employers 2026 to 2027; GOV.UK, Employment Allowance and eligibility; The Pensions Regulator, automatic enrolment earnings thresholds 2026/27; GOV.UK, workplace pension contributions; GOV.UK, holiday entitlement; GOV.UK, Statutory Sick Pay.