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1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errorsAn employer of record (EOR) can let a company hire an employee in another country without setting up its own local entity there: the EOR’s local entity employs the worker, while the company directs the work. The arrangement can simplify hiring, but it does not remove the need to check local employment rules, the provider’s actual responsibilities, or the full cost.
What is an employer of record?
An employer of record is a service provider that employs a worker locally on behalf of a client company. In the arrangement described by Justworks, the provider acts as the local employer, so the client can hire in a country where it does not own an entity. The client still selects the worker and directs their work in its business.
The service may include a locally compliant employment contract, onboarding, payroll, statutory withholding and remittance, benefits administration, and ongoing HR support. EOR International describes these functions as part of its offer. The exact scope—and the allocation of responsibilities and liability—depends on the contract, provider structure, and applicable law. A provider’s general coverage or compliance statement does not establish that every role or arrangement is available or appropriate in a particular country.
How does an EOR work?
- Choose a country and role. Confirm that the provider can support the specific employment arrangement there, not just that the country appears on a general coverage list.
- Confirm the employing entity. Identify the legal entity that will appear on the worker’s employment contract, and whether it belongs to the provider or a local partner.
- Agree on employment terms and scope. The provider may prepare the local employment contract and handle onboarding, payroll, benefits, and routine HR administration. Check the service agreement for what it actually undertakes.
- Manage the work and the ongoing relationship. The client directs the worker’s work; the provider handles the employer-side tasks specified in the agreement. Ask who will answer the worker’s questions and process leave, payroll issues, and employment changes.
Using an EOR does not, by itself, settle every legal, tax, immigration, permanent-establishment, or worker-classification question. Those outcomes can depend on the facts and current rules in the country involved; get country-specific advice where needed.
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Can you hire internationally without setting up a local entity?
Yes, an EOR can provide a route to employ someone in a country where your company does not have its own entity, if the provider can support the role and its legal structure works for that situation. The provider’s local employing entity is central to the model; it is not simply payroll software attached to your company.
That convenience is not a blanket exemption from local obligations. Before proceeding, establish who employs the worker, what the provider handles, what remains with your company, and whether the arrangement fits the worker’s location and duties. If you are considering your own entity instead, compare the likely setup, registration, payroll, local-advice, and ongoing costs against the expected hiring duration. These costs vary; the general comparisons available here do not establish a universal incorporation cost or break-even point.
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EOR vs. PEO vs. contractor vs. your own entity
These are different operating models, not interchangeable labels. The descriptions below reflect the provider explanation from Justworks; availability and legal treatment vary by country.
| Route | What it means in the described model | What to verify |
|---|---|---|
| EOR | The provider employs the worker locally, allowing the client to hire without owning an entity in that country. | The actual employer on the contract, provider or partner structure, country and role availability, support scope, and full quote. |
| PEO | Justworks describes its PEO arrangement as requiring the client to own a local entity and involving co-employment where permitted. | Whether co-employment is available and appropriate under the specific country’s rules. |
| Contractor | A commercial engagement rather than formal employment through the EOR. In Justworks’ description, contractors receive the gross amount and handle their own tax filings and remittances. | Whether the actual working relationship meets the applicable independent-contractor test; the contract label alone is not conclusive. |
| Your own local entity | Your company employs through an entity it owns in the country. | Entity formation, local registrations, payroll, advice, ongoing administration, and the likely cost and timing for your hiring plan. |
The International Labour Organization (ILO) says that employment status should be determined primarily from the facts about work performance and remuneration, even where a contract describes the relationship differently. Its Helpdesk guidance, summarizing Employment Relationship Recommendation, 2006 (No. 198), states: “the determination of the existence of an employment relationship should be guided ‘primarily by the facts relating to the performance of work and the remuneration of the worker, notwithstanding how the relationship is characterised in any contrary arrangement, contractual or otherwise, that may have been agreed between the parties’.” A contractor agreement or an intermediary does not automatically resolve classification risk.
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How much does an employer of record cost?
Start with the total employment cost, not the provider’s headline fee:
Gross salary + employer statutory contributions + EOR service fee + separately billed items.
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The examples below come from EOR Prices, accessed in 2026. They are that comparator’s country calculations and fee ranges, not a universal forecast. The annual employer-addition examples use the salary shown; provider fees are monthly. Recheck country costs and obtain a current written quote for your worker and terms.
| Country | Comparator’s employer-cost estimate above salary | Salary and annual employer additions in the example | Provider fee range shown per month |
|---|---|---|---|
| Germany | 21.3% | €70,000 gross salary; €14,884 annual additions | €175–€649 |
| United Kingdom | 16.5% | £60,000 gross salary; £9,871 annual additions | £149–£599 |
| Canada | 8.9% | CA$90,000 gross salary; CA$7,974 annual additions | CA$279–CA$945 |
| India | 4.0% | ₹2,400,000 gross salary; ₹95,192 annual additions | ₹19,071–₹66,989 |
| Philippines | 15.8% | ₱900,000 gross salary; ₱142,260 annual additions | ₱12,479–₱43,832 |
| Netherlands | 28.0% | €60,000 gross salary; €16,782 annual additions | €175–€649 |
| Singapore | 13.7% | S$120,000 gross salary; S$16,455 annual additions | S$254–S$940 |
| Brazil | 50.9% | R$120,000 gross salary; R$61,067 annual additions | R$1,035–R$3,637 |
| Spain | 32.1% | €50,000 gross salary; €16,075 annual additions | €175–€649 |
| Mexico | 32.0% | MX$600,000 gross salary; MX$192,146 annual additions | MX$3,607–MX$12,670 |
A separate 2026 estimate from EOR Network puts fees at $199–$800 per employee per month, with a market median near $399, and describes percentage-of-salary pricing as another model. This is that publisher’s market estimate, not a universal rate. Its dollar range should not be treated as directly comparable to the local-currency country ranges above without checking the provider, country, and services included.
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Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What to check in an EOR quote
- All-in cost: Request the monthly and annual total for the specific country, worker, salary, and expected services.
- Included versus pass-through charges: Ask which employer contributions and benefits are included and which are billed separately.
- Additional fees: Ask whether onboarding, deposits, contract changes, currency conversion, or offboarding cost extra. These are items to verify, not charges that every provider necessarily imposes.
- Employing entity: Ask which legal entity appears on the employment contract and whether it is the provider’s entity or a local partner.
- Employee and HR support: Find out who responds to worker questions and handles routine leave, payroll issues, and changes to employment terms.
- Changes in circumstances: Ask what happens if the employee changes location, role, or employment status, and what costs or approvals may follow.
How to compare EOR providers
Build a shortlist around the countries and roles in your hiring plan. A large country-count claim is less useful than clear answers for the locations you actually need.
- Country-level operating model: Compare whether each provider employs through its own entity or a partner, and confirm the arrangement for the specific country.
- Full cost: Compare salary, statutory employer burden, service fee, benefits, and separately billed items. Use written quotes with matching assumptions.
- Service scope: Confirm responsibility for contracts, onboarding, payroll, tax and social-contribution remittance, benefits, ongoing HR, and direct employee support.
- Employment fit: Decide whether the worker should be an employee through an EOR, an employee under a PEO arrangement where permitted, or a genuinely independent contractor.
- Country-specific answers: Ask how the provider handles local requirements, worker questions, and employment changes. Broad compliance claims do not establish the outcome for every role or arrangement.
Worker protections and recruitment-fee rules
The ILO Helpdesk page also reproduces Article 7(1) of the Private Employment Agencies Convention, 1997 (No. 181): “Private employment agencies shall not charge directly or indirectly, in whole or in part, any fees or costs to workers.” The convention allows government-authorized exceptions subject to conditions. This passage concerns fees charged to workers by private employment agencies; it is not a blanket statement about every EOR fee or every country’s current rules. Check applicable national law before charging or deducting anything from a worker.
The ILO’s second-edition Global study on recruitment fees and related costs provides country-level entries on legislation and fee charging. It is a dated reference, not a current, comprehensive legal assessment of EOR arrangements. For example, its table marks Germany “Both” and “Both” in the columns for national/international application and fee-charging provisions, while the Netherlands and Norway are marked “Prohibited.” Those entries do not determine the current legality or tax treatment of a specific arrangement; verify current national requirements with an appropriate local source.
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