Employer of Record (EOR)
An Employer of Record (EOR) legally employs workers on your behalf in countries where you have no legal entity. The provider holds the employment contract and handles payroll, taxes, statutory benefits and local labour-law compliance; you direct the day-to-day work. It’s the standard mechanism for hiring a full-time employee in a country where opening your own entity isn’t worth it.
How it works
- You select the candidate and agree compensation.
- The EOR employs them through its local entity (or a partner’s), on a compliant local contract.
- The provider runs payroll, withholds taxes, administers benefits and handles terminations under local rules.
- You pay the provider salary costs plus a fee — typically $200–800 per employee per month, or 8–25% of gross salary on percentage models.
What it is not
- Not for contractors — that’s a Contractor of Record or contractor management software.
- Not a PEO, which co-employs staff alongside your existing local entity (a mostly US model).
- Not payroll software: global payroll runs on top of entities you already own.
The main trade-offs: vendor lock-in (switching means re-contracting employees), uneven quality in countries served through partners rather than owned entities, and benefits that may lag what a strong local employer offers. Compare providers in our EOR rating.