Compliance

What is a Employer of Record?

Q: How quickly can an EoR onboard a new employee?

Most EoRs can onboard a worker in 2–5 business days in most countries, once the details are agreed. This is dramatically faster than setting up a local entity, which can take 3–6 months. For companies that need to move quickly, EoRs are often the only practical option for international hiring.

Q: What does an Employer of Record cost?

EoR fees typically range from 10–20% of the worker's gross salary, or a flat monthly fee per employee. The total cost also includes mandatory statutory contributions (pension, social insurance, etc.) which vary by country. Despite the fee, EoR is usually far cheaper than establishing a foreign entity, which can cost $10,000–$50,000 and take months of legal work.

An Employer of Record (EoR) is a third-party organization that legally employs workers on behalf of another company. The EoR becomes the worker's legal employer — handling employment contracts, payroll processing, tax withholding, benefits administration, and compliance with local labor laws — while the client company retains full control over the worker's day-to-day tasks and deliverables. EoRs are most commonly used for international hiring, enabling companies to engage talent in countries where they have no legal entity, without the cost and complexity of setting one up.

How an Employer of Record Works

The EoR model involves three parties:

The client company — identifies the worker they want to engage and directs the work
The EoR — legally employs the worker, processes payroll, files taxes, and ensures local compliance
The worker — receives a compliant employment contract, paycheck, and benefits from the EoR

In practice, the worker operates as part of the client's team. The client manages performance and assigns tasks. The EoR handles everything behind the scenes: onboarding paperwork, monthly payroll, statutory benefits (e.g. health, pension, leave), and termination procedures if needed.

The client pays the EoR a fee — typically a percentage of the worker's gross salary — in exchange for taking on the employer liability.

When Companies Use an EoR

EoRs are the go-to solution in several common situations:

International hiring: Engaging talent in a country where you don't have a registered legal entity — the EoR employs them locally so you don't have to open a subsidiary
Fast market entry: Testing a new market with a local hire before committing to establishing a full entity
Misclassification risk reduction: Converting contractors who have been working like employees into properly classified employees via an EoR
Remote-first teams: Hiring full-time remote employees across multiple countries without managing global HR complexity in-house
Project-based international work: Bringing on workers in specific countries for the duration of a project

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EoR vs. Staffing Agency vs. PEO

Feature	Employer of Record	Staffing Agency	PEO
Legal employer	The EoR	The agency	Co-employer with client
Client has own entity?	Not required	Not required	Required
Client directs work?	Yes	Sometimes	Yes
International use?	Yes — ideal	Limited	Typically domestic
Worker sourcing	Client finds worker	Agency sources talent	Client's own staff

A Professional Employer Organization (PEO) is similar but requires the client to already have a legal entity in the worker's country. An EoR doesn't — it's the legal entity. A staffing agency both sources and employs the worker; an EoR only provides the employment wrapper around a worker the client has already chosen.

How WorkGenius Uses EoR

WorkGenius offers integrated Employer of Record services as part of its contingent workforce platform. When you engage a contractor or freelancer through WorkGenius who requires formal employment — due to role type, jurisdiction requirements, or client preference — we can act as their legal employer.

150+ countries covered — engage workers almost anywhere without entity setup
Compliant from day one — local contracts, statutory benefits, and correct tax handling from the start
Single invoice — one payment to WorkGenius covers payroll, taxes, benefits, and our fee
Full visibility — track all EoR workers alongside contractors in one dashboard
Fast onboarding — workers are onboarded in days, not weeks

Frequently Asked Questions

Is an Employer of Record the same as a staffing agency?

Not quite. A staffing agency typically sources and places workers for you — they find the talent. An Employer of Record employs workers you've already identified, providing the legal employment wrapper. Think of an EoR as infrastructure, not a talent source. That said, some platforms (like WorkGenius) offer both sourcing and EoR services together.

Do I lose control of the worker if I use an EoR?

No. You retain full control over the worker's day-to-day tasks, deliverables, schedules, and performance. The EoR only handles the legal and administrative side of employment — contracts, payroll, taxes, benefits, and compliance. The worker is functionally part of your team; the EoR just ensures they're employed compliantly.

How quickly can an EoR onboard a new employee?

Most EoRs can onboard a worker in 2–5 business days in most countries, once the details are agreed. This is dramatically faster than setting up a local entity, which can take 3–6 months. For companies that need to move quickly, EoRs are often the only practical option for international hiring.

What does an Employer of Record cost?

EoR fees typically range from 10–20% of the worker's gross salary, or a flat monthly fee per employee. The total cost also includes mandatory statutory contributions (pension, social insurance, etc.) which vary by country. Despite the fee, EoR is usually far cheaper than establishing a foreign entity, which can cost $10,000–$50,000 and take months of legal work.

Related Terms

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