What Is an Employer of Record (EOR)?
An employer of record (EOR) is a third-party company that legally employs workers on your behalf in a country where you don’t have a legal entity. The EOR handles payroll, tax withholding, employment contracts, and statutory benefits, while you direct the employee’s day-to-day work. This lets you hire compliantly in a new country in days rather than the months it takes to incorporate. EOR fees typically run $300-$800 per employee per month on top of salary and employer contributions. EORs are most useful when you want to hire a handful of people in a country quickly, test a market, or onboard a remote worker without the cost and overhead of setting up a local subsidiary.
Last updated: 2026-06-25
How an employer of record works
When you hire through an EOR, the EOR signs a locally-compliant employment contract with your chosen candidate and becomes their legal employer of record. You still choose who to hire, set the salary, and manage the work, the EOR handles the legal and administrative employment burden: payroll, income-tax withholding, social contributions, mandatory benefits, and termination compliance.
EOR vs PEO vs setting up an entity
A PEO co-employs your staff and generally requires you to already have a legal entity in the country. An EOR is the sole legal employer and needs no entity from you. Opening your own entity gives maximum control but takes months and carries ongoing accounting, tax, and compliance costs.
What does an EOR cost?
Pricing is usually a flat monthly fee per employee ($300-$800 is typical) or a percentage of payroll. On top of the fee you pay the employee’s gross salary and the employer’s statutory contributions, which vary widely by country.
Frequently asked questions
An EOR becomes the legal employer of your workers in a country: it runs payroll, withholds taxes, administers statutory benefits, and ensures local compliance, while you manage the employee’s daily work.
Most EORs charge roughly $300-$800 per employee per month, either as a flat fee or a percentage of salary, on top of the salary and statutory employer contributions.
No. A PEO co-employs staff and usually requires you to have your own legal entity; an EOR is the sole legal employer and does not require you to set up an entity in the country.
An EOR is usually better for hiring a few people quickly or testing a market. Once you have many employees in one country, opening your own entity can become more cost-effective.
Next steps
Compare the leading providers in our best EOR services guide, see real numbers in the EOR cost guide, or jump straight to a country guide.