What is an Employer of Record (EOR)?
An Employer of Record (EOR) legally employs workers on your behalf in a country where you have no legal entity, handling payroll, benefits, taxes, and compliance while you manage the work.
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An EOR is the legal employer in-country, so you can hire full-time staff in a new market in days without incorporating there. You direct the work; the EOR carries the employment obligations.
How does an EOR work?
You choose who to hire and where. The EOR, which already has a compliant legal entity in that country, signs a locally compliant employment contract with the worker, onboards them as the legal employer, and then runs in-country payroll, benefits, and tax filings. You direct the employee’s responsibilities and performance; the EOR carries the legal and administrative obligations of employment.
What does an EOR handle?
- Compliant employment contracts under local law
- In-country payroll in local currency, on time
- Statutory and supplemental benefits administration
- Tax withholding, filings, and social contributions
- Ongoing compliance with changing employment regulations
EOR vs. PEO: what’s the difference?
A PEO co-employs workers where your company already has a legal entity, sharing employer responsibilities with you. An EOR is the sole legal employer, which is what allows hiring in a country where you have no entity. When a global PEO or “international PEO” hires your team abroad, it’s operating as an EOR. See PEO vs EOR: When to Use Each for the full breakdown.
When should you use an EOR?
Use an EOR when you want to hire someone in a country where you have no entity, test a market before committing to incorporation, move quickly on a candidate, or keep a small international team compliant without the overhead of local entity setup. If you later scale up in that market, you can transition employees to your own entity.
Frequently asked questions
What does EOR stand for?
EOR stands for Employer of Record, a company that legally employs workers on your behalf in a given country and handles payroll, benefits, taxes, and compliance.
Is an EOR the same as a global PEO?
Functionally, yes. “Global PEO” and “international PEO” describe the same cross-border hiring service that an EOR provides, employing your team in a country where you have no legal entity.
Do I need a legal entity to use an EOR?
No. Using an EOR means you don’t need to set up your own legal entity in that country, the EOR’s entity employs the worker for you.
Continue learning
Global PEO: The Complete Guide
How a global PEO lets you hire abroad without an entity.
What Is a PEO?
The co-employment model, explained.
PEO vs EOR: When to Use Each
Which model fits your next hire.
Contractor vs Employee vs PEO
Compare global engagement options.
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