If you already have a local entity, what does an EOR give you that payroll doesn't?

Summary

Very little. An EOR's fee pays for the provider to be the legal employer, and if your own entity already employs the people, you are paying for something you have. A payroll provider calculates, files, and pays for your entity at a fraction of the price. At Remote's published rates, ten employees for a year cost $71,880 to $83,880 on EOR and $3,480 on its payroll product.

One is the employer, the other works for the employer

Remote's support article draws the line in one sentence: with an EOR "you do not need to own your own entity," while Global Payroll "requires that the company have its own entity set up." It describes global payroll as "an outsourced payroll provider." The contract of employment stays with your company.

With an EOR, the contract is with the EOR's local entity, and the provider takes on the employer's side of things: registrations, statutory benefits, and the process when employment ends. Both products produce payslips every month, which is why they get confused. The difference is whose name is on the employment contract.

Pricing the gap with one provider

Remote's pricing page lists EOR at $699 per employee per month and payroll at $29, and a separate Remote EOR page quotes $599 for EOR on annual billing. It pitches the payroll product at organizations that "might already have legal entities in foreign countries, but need centralized payroll infrastructure."

For ten employees over twelve months:

• EOR billed monthly: $699 × 10 × 12 = $83,880
• EOR billed annually: $599 × 10 × 12 = $71,880
• Payroll: $29 × 10 × 12 = $3,480

The difference is $68,400 to $80,400 a year. That is the budget your own entity has to live within: registration, accounting, any statutory audit, and whoever handles local employment matters. Whether a given country's entity costs less than that depends on local quotes, and the break-even formula is on SeatBill's EOR-versus-entity page.

Moving off an EOR means a resignation

Switching from EOR to your own entity is not a software migration. Remote's help article on moving employees in-house says that when you transfer one or more employees "to your own entity or to another employer of record (EOR), the employees need to submit a resignation request on the Remote platform."

Legally, the EOR employment ends and a new contract starts with your entity. Service time, accrued leave, and year-to-date payroll records all become questions for the new employer, which is now your company and no longer the EOR.

Sources

• https://support.remote.com/hc/en-us/articles/4413629551501-What-does-an-employer-of-record-EOR-do
• https://remote.com/pricing
• https://remote.com/services/employer-of-record
• https://support.remote.com/hc/en-us/articles/9538310352781-How-do-I-transfer-an-employee-in-house-or-to-another-EOR

Related on this site

• What does an employer of record actually take off your hands?
• Is a PEO just the American version of an employer of record?
• Employer of record or your own entity: where the number flips
• Employer cost calculator
• Payroll software pricing per employee