What does an employer of record actually take off your hands?

Summary

An employer of record becomes the legal employer of someone you want to hire in a country where you have no entity. It signs the employment contract, runs payroll, handles local employment taxes and statutory benefits, and processes the paperwork when the job ends. It does not decide what the person works on or how their performance is judged; that stays with you. Published fees range from $99 to $699 per employee per month, and salary and employer contributions are billed on top.

The EOR's name goes on the contract

Remote defines an EOR as "a company that legally employs workers on behalf of another business." In practice that means the contract of employment is between the worker and the EOR's local entity, not your company. Remote also says it owns the entities in every country it operates in, which is not true of every provider.

Hire one engineer in Germany this way and it is the EOR's German entity that issues her payslips and registers her with German social insurance. You get a team member in Germany without incorporating there.

What it handles, and what it leaves with you

Remote's support article lists five things the EOR takes on:

• onboarding
• payroll and time off
• local employment taxes
• statutory and supplementary benefits
• contract management, including employment letters, country transfers, and termination

The same provider is explicit about the other side: "an EOR does not manage the employee's daily tasks or performance." Assigning work, setting goals, and deciding whether someone has earned a raise remain your job. Some legal duties also stay with you even though the EOR is the employer on paper. Workplace conduct and intellectual property are two examples, and the split is covered in more detail in a separate piece on EOR responsibilities.

Two kinds of money on one invoice

An EOR invoice carries two different things. The first is the employment cost itself: salary plus whatever the country makes employers pay in social contributions. You fund it, and the EOR passes it on to the employee and the authorities. The second is the EOR's own fee, a flat amount per employee per month.

Here is what five providers show on their own pricing pages:

• Native Teams: starts at $99
• RemoFirst: starts at $199, and may vary with local country requirements
• Deel: $599, month to month with no long-term commitment
• Remote: $699, with $599 for annual billing quoted only on a separate Remote EOR page
• Oyster: $699, with annual discounts available

Some of those are starting prices and some are flat list prices, so the lowest number is not automatically the cheapest quote you will get. None of them includes salary. Employer contributions differ far more from country to country than these fees do, which is why the fee and the statutory cost need to be added up separately.

Expect a deposit in some cases

Because an EOR pays wages before you settle the invoice, some providers hold a deposit. Deel's help center says its standard deposit is one to one and a half months of total monthly charges, salary and fees included, and normally no more than two months. Oyster requires a refundable deposit for EOR team members. Remote says it collects reserve payments only "in rare, high risk circumstances."

Sources

• https://remote.com/services/employer-of-record
• https://support.remote.com/hc/en-us/articles/4413629551501-What-does-an-employer-of-record-EOR-do
• https://www.deel.com/pricing/
• https://help.letsdeel.com/hc/en-gb/articles/15574494993297-About-EOR-Deposit-Calculations
• https://nativeteams.com/pricing
• https://www.remofirst.com/price
• https://www.oysterhr.com/pricing
• https://remote.com/pricing

Related on this site

• Employer of record costs by country
• What an employer of record charges
• If you hire through an EOR, who actually approves a raise or a firing?
• What does an EOR's monthly fee actually pay for?
• When is an employer of record the right call, and when are you paying for something you don't need?
• Employer of record or your own entity: where the number flips