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In this Guide
- Top Employer of Record Services
- Introduction and Criteria
- Our Reviews of the Top Vendors
- Why use an Employer of Record Services Firm?
- Key Considerations & Pitfalls of Multi-Country Payroll
- How to Identify a Good EOR Service Provider
- EOR or PEO?
- What are the best EOR service providers?
- EOR Services FAQs
- Last Advice on Picking an EOR Service Provider
Hand picked by our HR Technology experts after product testing, user research, and much debate - enjoy!
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An Employer of Record, or EOR, is one of the best ways of hiring employees overseas without having to set up a legal entity in their country. An EOR service provider lets you hire as little as one worker in another nation by becoming their legal employer on your behalf.
Naturally, this space has been growing tremendously over the last few decades, so we’ve done the research and consulted experts in order to put together this list of the best employer of record service providers.
These companies can not only help you pay, provide benefits, and handle taxes for a foreign employee. They can also help with visa and sponsorship applications, stay compliant with local labor laws, and have people on the ground that can assist your workers with many other HR processes.
While we’ll focus on EOR services, most of these companies also have a software platform that you and your team can use to keep track of all this information. If you’re looking for a self-service approach to managing international payroll, you can complement this reading with our list of the best global payroll solutions. Good luck!
Our criteria: How we chose the best vendors
We take research seriously. To make sure we’re offering our readers the very best solutions in a given software category, we are methodical, rigorous, and expansive in our research. We consult with HR professionals, vendors, and industry experts. We cut through the noise to bring you a carefully curated list of vendors, along with other essential information, to help you find the right software platform for your business.
Here’s how we chose who makes the cut:
Product: We believe in gaining a comprehensive understanding of a product before we recommend it, so we start by getting to know the software. Whenever possible, we meet with a senior executive (CEO or Head of Product) for a demo and Q&A. We also test the product ourselves to make sure it has a solid UI, intuitive workflows, and the features to make it a best-in-class offering.
User feedback: We go straight to the source and compile feedback on user experience. Real-world input supports our commitment to diligence in our software evaluation methods and the products we recommend. Keeping up with the everyday experience of HR pros also puts new vendors on our radar, and it keeps us close to our community so we can better connect the right products to the right people.
Financial metrics: We are certified finance nerds, so we use all the data we can get our hands on to make selections for our guides. We comb through data for concrete statistics like retention rates, growth, profitability, and scalability. We evaluate the bottom line of each product because we know making a software purchase can put your reputation on the line.
Best for a use case: Software is never a one-size-fits-all product. Sometimes the best solution is free or cheap. Other times it’s the one that is best for global companies or the one that’s sized right for early-stage startups. Keeping this in mind, we include solutions across the spectrum so our readers can find the best fit for their unique needs.
Here's more detail if you want to read more about how we research vendors. Our dedicated staff writers rely on hard data, impartial experts, and user feedback to ensure our reviews are helpful, truthful, and hopefully a pleasure to read!
Top Employer of Record Services
We track thousands of HRTech solutions, these are the best Employer of Record services companies for several business sizes and types per our research and expert council as of 2023.
Why we love it
:
Remofirst is an all-in-one EOR platform that lets you hire remote employees virtually anywhere. They stand out for their affordability and their customer support since each client gets a dedicated account manager available 24/7.
- Employers are able to pay Remofirst in USD, GBP, EUR, CAD, and SGD.
- In turn, Remofirst pays each global employee in their local currency.
- Over 150 countries serviced
- Since it’s a young product, the UI looks quite modern, sleek, and generally easy on the eye.
- As a younger company than others in the industry, Remofirst are still rolling out new integrations and features from their roadmap every month. Hence, these are somewhat limited for now.
Remofirst
Review:
Remofirst is both a software platform and an employer of record provider. They provide compliance for global teams in need of hiring employees and contractors in places where they don’t have legal entities of their own.
As a relatively new player in the EOR software space, the last 2 years have seen many changes for their product; which launched in 2021. Updates include a recently-renovated UI, same-day onboarding and better customer support; since it’s now offered 24/7 for every client.
On the services side, they stand out for transparency and excellent customer service. They also have wide coverage of countries and a very reasonable cost.
Remofirst
Customers:
Microsoft, Mastercard, ZocDoc, QED, Labster, ZocDoc, Byrd
Microsoft, Mastercard, ZocDoc, QED, Labster, ZocDoc, Byrd
Remofirst
Stats:
- Remofirst is notable for becoming fully profitable in less than 1 year of operation.
- Their NRR is currently 85%-100%
- Revenue has climbed 11x from one year to another
- Remofirst is notable for becoming fully profitable in less than 1 year of operation.
- Their NRR is currently 85%-100%
- Revenue has climbed 11x from one year to another
Remofirst
Pricing:
Remofirst’s pricing is very much worth considering. For EOR services, it starts at $199/employee/month. For contractors, it’s free.
They don’t exactly offer a free trial, but since there is no monthly fee for hiring global contractors with Remofirst, you could hire that way and try the platform before you commit to the EOR way.
Remofirst’s pricing is very much worth considering. For EOR services, it starts at $199/employee/month. For contractors, it’s free.
They don’t exactly offer a free trial, but since there is no monthly fee for hiring global contractors with Remofirst, you could hire that way and try the platform before you commit to the EOR way.
Best For
Remofirst would be a good bet for any company that wants to hire remote workers globally while remaining compliant, whether it’s contractors, full-time, or a mixed bag. Remofirst is used by both big companies and small companies, as well as bootstrapped startups. Their clients are mostly 100-to-200 full-time employee companies within the tech sector. That being said, you can use the platform to hire only contractors or one employee, and it can grow with you from there.
Why we love it
:
Deel is making waves in the payroll space, being one of the first companies to specialize in international payroll for remote teams.
Deel
Review:
With Deel, companies can hire employees in a multitude of countries without it getting messy. From the same dashboard, you can manage international payroll, benefits, taxes, and compliance in 150 countries.
Deel
Customers:
- Brex
- Doogle
- Duffel
- Andela
- HomeLight
- Makerpad
- Brex
- Doogle
- Duffel
- Andela
- HomeLight
- Makerpad
Deel
Stats:
- Trusted by over 2,400 companies
- Over 200 legal partners worldwide
- Trusted by over 2,400 companies
- Over 200 legal partners worldwide
Deel
Pricing:
A cool thing about Deel is that you can sign up for free and play around with the tool, not being charged until you pay your first team member. Once you do, pricing for Deel will vary as follows:
- Contractors: At $49 per contractor per month, Deel takes care of payroll and compliance for contracts in 150 countries.
- Full-time: From $500, this plan lets you hire full-time employees in a new country without having to set up a legal entity there. Deel becomes an Employer of Record and hires the employee for you.
A cool thing about Deel is that you can sign up for free and play around with the tool, not being charged until you pay your first team member. Once you do, pricing for Deel will vary as follows:
- Contractors: At $49 per contractor per month, Deel takes care of payroll and compliance for contracts in 150 countries.
- Full-time: From $500, this plan lets you hire full-time employees in a new country without having to set up a legal entity there. Deel becomes an Employer of Record and hires the employee for you.
Best For
Companies, big or small, who wish to stay compliant when hiring people in multiple countries.
Why we love it
:
Multiplier is an EOR platform where you can send contracts in minutes, run payroll in over 120 countries, and grant equity to employees with their employee stock option plans, among many other things. They also offer 24/7 customer service.
- Multi-currency payments in local currencies
- Multi-lingual contracts made instantly
- Compliance, payroll, onboarding, and timesheets, all in one platform
- Multi-currency payments in local currencies
- Multi-lingual contracts made instantly
- Compliance, payroll, onboarding, and timesheets, all in one platform
- Limited integrations. As of Summer 2022, Multiplier only integrates with BambooHR for HCM-type tools, although they are working on adding more.
- Limited integrations. As of Summer 2022, Multiplier only integrates with BambooHR for HCM-type tools, although they are working on adding more.
Multiplier
Review:
Multiplier is an Employer Of Record and a PEO platform that helps companies hire, onboard, manage, and pay employees, as well as manage taxes, allowances, bonuses, social contributions, and statutory deductions in over 150 countries. For a company that was founded in late 2020, they have made significant strides in their industry, one of which is securing over $70 million in funding from 14 investors.
Further, their PEO service stands as the middle-man employer to process payroll, benefits, and other expenses required to manage global workforces. Multiplier also helps businesses with local entities process local payroll in the specific markets they are hiring.
Multiplier
Customers:
Amazon, Fusion, Graphisoft, ServiceNow, Orange, Grant Thornton, Linklaters, Korn Ferry
Amazon, Fusion, Graphisoft, ServiceNow, Orange, Grant Thornton, Linklaters, Korn Ferry
Multiplier
Stats:
- Have raised a total of $77 million in funding
- Was the 2022 headline sponsor of Running Remote - the world's largest conference on building remote teams.
- Valued at $400 million
- Have raised a total of $77 million in funding
- Was the 2022 headline sponsor of Running Remote - the world's largest conference on building remote teams.
- Valued at $400 million
Multiplier
Pricing:
Multiplier offers two price plans for their EOR services. They are flat rates priced on a per monthly basis. The amount stays the same regardless of the number of employees you manage. You get to cancel anytime, and no credit card is required for initial sign-up.
Note that, in addition to these plans, you will pay additional costs for the employee insurance package (also offered as a stand-alone tool). It starts from $20 per month for the basic coverage plan, and the prices vary with additional coverage. Prices may also vary with location.
Global Payroll is also offered as a stand-alone product for businesses with or without local entities - starting at $20 per employee per month.
Multiplier offers two price plans for their EOR services. They are flat rates priced on a per monthly basis. The amount stays the same regardless of the number of employees you manage. You get to cancel anytime, and no credit card is required for initial sign-up.
Note that, in addition to these plans, you will pay additional costs for the employee insurance package (also offered as a stand-alone tool). It starts from $20 per month for the basic coverage plan, and the prices vary with additional coverage. Prices may also vary with location.
Global Payroll is also offered as a stand-alone product for businesses with or without local entities - starting at $20 per employee per month.
Best For
Multiplier is a better choice for companies looking to hire their global workforce in the Asia-Pacific region, although they don’t operate there exclusively. Their features are beneficial to startups, mid-sized businesses, and enterprises. An example of this is the variety of contracts they are able to handle, whether it’s for supporting an on-demand workforce, fixed term, full-time, and more.
Why we love it
:
Oyster lets you hire, pay, and provide benefits to your team members across a myriad of borders.
Oyster
Review:
Oyster is notable among the global EOR and payroll vendor landscape for being able to help with hiring, compliance, benefits, payroll, and other HR processes in over 180 countries. You can hire and onboard A-players, regardless of their location, in a matter of days.
Another cool thing about Oyster is that they’re a remote company too. Their team is distributed across 30+ countries and 5 continents, so they’re certainly no strangers to the remote-first philosophy, which is evident in their product and operation.
Oyster
Customers:
Quora, Wagestream, Impala, Grover
Quora, Wagestream, Impala, Grover
Oyster
Stats:
- Hiring and HR processes in 180+ countries
- Grew revenues 8x in the last year
- Hiring and HR processes in 180+ countries
- Grew revenues 8x in the last year
Oyster
Pricing:
With Oyster, you can choose whether to hire people with them acting as the employer of record, or take people on as contractors. You can have up to two contractors for free. Then, pricing is as follows:
- Contractors: $29 per team member per month
- Business: pay $399 or $699 per employee per month, when Oyster acts as the EOR.
- Enterprise: get custom pricing for extra HR and legal support apart from payroll processing services.
With Oyster, you can choose whether to hire people with them acting as the employer of record, or take people on as contractors. You can have up to two contractors for free. Then, pricing is as follows:
- Contractors: $29 per team member per month
- Business: pay $399 or $699 per employee per month, when Oyster acts as the EOR.
- Enterprise: get custom pricing for extra HR and legal support apart from payroll processing services.
Best For
Remote companies whose global workforce is growing quickly.
Why we love it
:
Papaya Global is one of the fastest-growing companies in this space. Their platform can automate payroll in hundreds of countries, manage all employee types, and onboard new hires.
PapayaGlobal
Review:
Papaya Global is on a mission to revolutionize global payroll management. This international people & payroll platform is one of the most complete solutions for having employees in multiple countries.
That being said, Papaya Global does more than cross-border payments. Their platform can also be used for hiring, onboarding, employee management, and they have a global equity management tool. This last tool helps with offering equity to employees as a part of their compensation, regardless of where they are.
PapayaGlobal
Customers:
- Microsoft
- Intel
- GDIT
- Toyota
- Wix.com
- Teradata
- Fiverr
- Johnson & Johnson
- Deezer
Toyota, GDIT, Microsoft, Wix, Teradata, Ncino
PapayaGlobal
Stats:
- Payroll for 160+ countries
- $1.3B total payroll under management
- Used by over 400 companies
- 99% customer retention rate
Papaya works in 160+ countries.
PapayaGlobal
Pricing:
Processing international payroll with Papaya Global is possible via the four following plans:
- Payroll: They’ll manage your entire payroll process for one all-inclusive fee per employee, per month. Depending on your operation, this fee will fall between $20 and $100.
- Global EOR: Papaya Global’s in-country partners function as employers of record, being responsible for payroll, workforce management, benefits, and compliance, and more. You can still stay up-to-date on everything through the platform, and this plan is between $770 and $1000 per employee per month.
- Contractor Management & IC Compliance: Particular services are outsourced to a domestic or foreign contractor, for periods of rapid growth and the need to reduce labor costs. This plan starts at $25 per employee per pay cycle.
- Payroll Intelligence Suite: This plan lets you consolidate all workforce and payroll data from all your operations into a single dashboard, priced at $250 for an annual plan or $320 quarterly per location.
Papaya has 3 plans:
- Payroll: In this plan, Papaya runs and manages your entire payroll process for one, all-inclusive fee ranging that is $20 per employee per month.
- Global EOR: In this plan, Papaya's in-country partners will serve as employers of record and assume responsibility for payroll, workforce management, benefits, compliance, and more. The pricing of this plan is $650 per employee per month.
- Contractor Management & IC Compliance: With this plan, you can outsource particular services to a domestic or foreign contractor, paying $25 per employee per pay cycle.
Best For
Global companies that want to be able to choose from a wide array of products from the same vendor as their organization grows and changes.
Why we love it
:
Remote is a robust and modern platform specialized in HR, payroll, and benefits for, as their name suggests, remote-first teams.
Remote
Review:
Remote fully owns local legal entities in all the countries they cover. Since they have no intermediaries to deal with, they’re able to offer more flexibility and speed at very interesting costs.
Their platform is a globally-distributed HR hub where you can process payroll, perform salary simulations, onboard new team members, manage benefits, and take care of most of the administrative tasks that come with having a distributed team.
Remote
Customers:
Arduino
GitLab
Paystack
Loom
cargo.one
Secureframe
Phaidra
- Arduino
- GitLab
- Paystack
- Loom
- cargo.one
- Secureframe
- Phaidra
Remote
Stats:
- 99.999% uptime
- <150ms response times
- Founded in 2019 as a remote-first company
- VC-backing from Sequoia, Index Ventures, and General Catalyst, among others.
- 99.999% uptime
- <150ms response times
- Founded in 2019 as a remote-first company
- VC-backing from Sequoia, Index Ventures, and General Catalyst, among others.
Remote
Pricing:
Remote has four plans. “Contractors” lets you manage and pay global contract workers for free; you only pay for payment processing fees. Then, they have their “Global Employment” plan, which starts at $299 per employee per month. For the other two plans, “Payroll & Benefits” and “Global Employment Plus”, they offer customized pricing.
Remote has four plans. "Contractors" lets you manage and pay global contract workers for free; you only pay for payment processing fees. Then, they have their "Global Employment" plan, which starts at $299 per employee per month. For the other two plans, "Payroll & Benefits" and "Global Employment Plus", they offer customized pricing.
Best For
Remote is great for both well-established distributed companies or remote-first startups.
Why we love it
:
GoGlobal is the world’s faster-growing privately-owned EOR provider. They are among the true pioneers of the space and have substantial expertise in many markets.
GoGlobal
Review:
GoGlobal started providing EOR services in Asia Pacific, quickly becoming highly sought-after experts in the region by companies from the West wanting to hire top talent there. They’ve been expanding rapidly while sticking to their credo of doing things themselves. For that reason, their country count of 50+ countries with direct operations may seem reduced in comparison to the 150+ boasted by several companies, but that’s because they rarely turn to third-party firms to establish a presence in a new territory; they actually have people in most places they operate in. They continue to grow rapidly, adding new countries virtually every week.
While it’s a relatively new and therefore smaller firm compared to the others mentioned here, GoGlobal turns their size into an asset, allowing them to be nimble, responsible, and adapt easily to what their clients need. Their workforce of approximately 100 passionate and fully remote individuals spans the entire globe.
GoGlobal
Customers:
They have worked with some of the most well known companies across various industries including social media companies, food delivery technology companies, streaming companies and one of the largest liquor producers.
GoGlobal
Stats:
- 500% anticipated growth in 2021
- 50+ Countries with direct operations including most recent launch into Latin America, and providing services in 70+ countries cover six continents
- ~ 100 employees
GoGlobal
Pricing:
GoGlobal’s pricing is custom-based, since it varies depending on the number of people you’re looking to hire and the location. One thing we can say is that they tend to be very transparent about their pricing, consistently providing breakdowns and very open about what is charged.
Best For:
GoGlobal’s services can be helpful for businesses of all sizes and geographies. That being said, they tend to find great matches with VC-backed SaaS companies with a remote global workforce.
Why we love it
:
Globalization Partners are the makers of a global Employer of Record platform, putting together professional services and AI for more than just payroll.
Globalization Partners
Review:
Globalization Partners combines professional HR and global payroll services with an AI-driven platform. Through their offering, you can hire team members in any of the 187 countries they operate in. Their platform & services go well beyond payroll, helping with onboarding, managing, benefits, and compliance.
Since they own a business entity in almost every country on earth, they can let you hire talent globally within a matter of days. Naturally, all this is done without you having to handle any legal, tax, or HR burdens yourself.
Globalization Partners
Customers:
Zeeto
Globalization Partners
Stats:
- Payroll & compliance in 187 countries
- 97% customer satisfaction ratings
- 180 currencies
- Raised 150M in private equity during 2020
- 480+ employees
Globalization Partners
Pricing:
Pricing details are not provided by Globalization Partners. The best way forward is to request a demo and they’ll work with you to provide a custom quote.
Best For:
Companies that want an employer of record provider with a platform to manage it all.
Why we love it
:
Atlas combines industry expertise and technology in their offering, empowering companies to hire and pay employees beyond their borders, while keeping them compliant with local labor laws.
- Atlas has legal entities in over 160 countries. They’ll help you take care of employee onboarding and payroll processing in any of those countries, eliminating the need to engage any local service providers.
- The platform simplifies how you hire, manage and pay employees and contractors abroad, without needing to set up an operation where they are located.
- Atlas helps you stay compliant with local labor laws and frees you from employer liability.
- Atlas has legal entities in over 160 countries. They’ll help you take care of employee onboarding and payroll processing in any of those countries, eliminating the need to engage any local service providers.
- The platform simplifies how you hire, manage and pay employees and contractors abroad, without needing to set up an operation where they are located.
- Atlas helps you stay compliant with local labor laws and frees you from employer liability.
- Atlas currently doesn’t offer global managed payroll for non-employer of record (EoR) clients; so if your company doesn't need Atlas to take on from you as EoR, but need to use Atlas' global payroll services, you can't do so at this time. Do note though that the team at Atlas is planning to offer this service next year.
- Atlas currently has limited prebuilt integration modules but they do offer API access for users to plug in third-party tools.
- Atlas currently doesn’t offer global managed payroll for non-employer of record (EoR) clients; so if your company doesn't need Atlas to take on from you as EoR, but need to use Atlas' global payroll services, you can't do so at this time. Do note though that the team at Atlas is planning to offer this service next year.
- Atlas currently has limited prebuilt integration modules but they do offer API access for users to plug in third-party tools.
Atlas
Review:
Atlas is a 100% direct employer of record (EOR) and international payroll platform that enables companies to hire and pay talent almost anywhere in the world. They’ll assume the role of legal employer on your behalf; this means once you find employees that you want to hire, they’ll help you manage those employees’ lifecycle, from onboarding to payroll processing - all while keeping you compliant with local labor laws. They can
Atlas
Customers:
Atlas is used by over a thousand companies, including Toyota, CACI, Bath & Body Works, Coupa, PAE, and Namely.
Atlas
Stats:
Atlas reported the following figures:
- 160+ local entities around the world
- 90+ languages supported
- 95%+ customer retention
- 82% faster expansion to a new market
Atlas
Pricing:
- Essential: For $99 per month, this plan encompasses features and services that help users navigate the labor & employment laws in over 160 countries (+50 US States), manage employee lifecycle, compliance information between countries, be compliant with their accounting for travel and business expenses, receive personalized notifications, as well as have moderate access to expert insights and HR templates (which are priced separately).
- Premium: For $149 per month, this plan packs everything in the Essentials plan, plus compliance audit interactive checks, people analytics and planning features as well as dedicated account management.
- Enterprise: The pricing of this plan varies according to the number of purchased licenses and customer needs. You can reach out to Atlas’ Sales team for a custom price quote.
Add-ons:
- Contractor Pay: Starting at $49 per contractor per month
- Employer of Record: $595 per employee per month
- Visa & Mobility Sponsorship: Starting at $2,500 per visa
Best For:
Companies of all sizes can avail Atlas’ offering. If you’re looking to compliantly hire and pay employees globally, Atlas is worth checking out.
Why use an Employer of Record Services Firm?
There are many benefits to partnering with an employer of record in order to fully hire an employee overseas. The main one is that you save a lot of time and money, since you won’t have to set up a legal entity in each country that you hire someone. Aside from the fact that the services firm will be doing the heavy lifting of hiring, compensating, and managing taxes for each worker, you can use the same EOR services firm for a wide variety of countries.
If let’s say, further down the line you decide that you’d like to hire a new salesperson in Southeast Asia, the EOR services firm is likely to already have an operation there and guide you through each step of the process. You can then focus on finding the right talent, knowing that you’re able to offer at least as many benefits and security to them as a local company would.
Also, while an EOR services company is not a staffing agency, some of them can indeed help with recruitment. Some of these companies will have staffing purposes done in-house, while others partner with staffing agencies in each territory so they can add that to their offering.
Other Employer of Record Use Cases
There are many reasons why an organization would prefer the speed and local expertise of an employer of record as opposed to setting up a legal entity of their own. Here are some of the main ones:
- For remote-first teams: For businesses that have been remote since their inception and intend to stay that way, EOR services are a great option. It doesn’t make sense to set up a full operation within a country if you’ll only have 1-3 employees there.
- Explore a new market: For other types of businesses wanting to develop a stronger foothold in a foreign country, EOR is a great place to start and get a feel for what it’s like to operate there.
- To get started faster: Additionally, even companies that are sure of wanting to set up a new entity in order to expand could benefit from an EOR services firm. If there’s a strong need to begin operations quickly, for example, if they have already found a few workers there, an EOR can help with getting started while the process of setting up an entity is done simultaneously.
- As part of an acquisition: EOR services can also be used as a part of an acquisition process. If the deal didn’t include a new legal entity in a target country but did include a local workforce, an EOR provider can ensure the employment relationship continues with complete peace of mind.
- Stay compliant: There is also the case where a company will have many independent contractors overseas but no intention of making them full-time employees. This is common with remote startups, for instance. In this scenario, an EOR firm can help with mitigating any non-compliance risks that could derive from each local regulation.
Key Considerations & Pitfalls of Multi-Country Payroll
Another benefit of using an EOR service provider is that the risk of being an employer falls almost entirely on the employer of record, reducing your liability. In other words, the employer of record bears the burden of all responsibilities and liabilities regarding the employer-employee relationship.
That being said, hiring people overseas through an EOR is no picnic. Here are some of the main considerations you should still bear in mind in order to stay on the safe side.
- Knowing local laws: Just because a software company/services provider will be doing the work for you, doesn’t mean you shouldn’t be aware of what that work is. Like with any good manager, delegating doesn’t mean ignoring. As an employer or HR professional, you should know what laws and regulations you need to adhere to in each country where you’ll be paying someone. This not only helps with making sure that you’re staying compliant through the tool. It also aids when creating a budget, deciding whether to hire someone or not, shifting from contractor status to full-time, etc.
Note: Luckily here, most of the top vendors put together resources to educate their user base on this. We mentioned Globalization Partners’ Globalpedia above, but there’s also Papaya Global’s super-detailed CountryPedia, Remote’s Country Explorer, and Deel’s Global Hiring Guide, to name a few. - Know your costs: While fees for some of these international payroll companies may seem high, it helps to try and calculate how much you’d spend if you choose to go with individual providers in each country, or even set up an operation there and handle it in-house. That should help determine how much is reasonable to spend on the project, instead of trying to find the lowest-cost provider. Among these costs, you should also consider the fines that you would incur if you stay non-compliant, or even the potential cost of churn if your employees and/or contractors leave you for not providing the full range of benefits.
- Be mindful of data protection: Data protection laws, especially GDPR, should be one of your concerns if you’re planning on hiring people in new markets. If you’re trusting a software company with your employees’ personal data, you should know which laws are being obeyed when it comes to said data’s safe-keeping. You should also know what kind of practices are put into keeping it safe, beyond the legal requirements.
How to Identify a Good EOR Service Provider
This article should let you choose 2-3 vendors that start to feel like they would align well with your international expansion strategy. Once you get in touch with them, here are some of the questions you should be asking in order to ensure a smooth co-employment relationship:
- How much do they know about the country (or countries) you’re expanding in? You can also check if they have published anything that demonstrates thought leadership about hiring and employment laws in that place. Ideally, they should be true experts in tax laws, work permits, payroll processing, health insurance, background checks, employee onboarding, and everything about the employment relationship within the foreign country.
- Do they have a permanent local entity in the country you’re looking into? Some companies rely on local partnerships instead of having an entity of their own. This is common if they are barely starting to operate there, or haven’t seen much interest in that geography from their current clients. To make sure of this, you can ask if they have an LLC or some type of legally-incorporated entity within the country. This tells you how much of a priority your target country is for them.
EOR or PEO?
One other thing you need to know about Employer of Record companies is that they are not the same thing as a Professional Employer Organization (PEO). The distinctions between one and the other are subtle, but very important, as we’ll see:
- Liability: As mentioned before, an EOR takes the better part of the liability of hiring somebody. Through working with a PEO, the client company is much more liable, as they will be the ones that hold and sign the employment contracts, assuming all liabilities and responsibilities.
- Geography: Naturally, since a PEO is typically a co-employer, hiring someone overseas through a PEO would entail having to set up a legal entity within that country. This also means that a PEO wouldn’t be completely in charge of ensuring compliance with local labor laws, as is the case with an EOR.
- Insurance and other Benefits: With a PEO co-employment situation, the client usually has to pay for an insurance policy provided by the PEO, but as the actual employers, they need to provide the workers with insurance of their own. The same goes for other benefits such as a retirement fund or expenses. When working with an Employer of Record, on the other hand, the client’s employees are fully covered under what the EOR provides, which will be tailored to the local laws and regulations, or what local companies are able to offer top talent.
The reason why PEOs are sometimes confused with EORs is that they are not required to be the employer of record in order to take care of a good portion of your HR processes. However, some PEOs do become employers of record, but not all of them offer that option. Also, they typically don’t operate in many countries. A PEO will typically focus on a certain market, which is why some EORs will partner with them to further their scope of operations within a new country.
What are the best EOR service providers?
- Papaya Global: Hire and pay all employee types in 140+ countries.
- Deel: Payroll and savvy local expertise for remote international employees.
- Remote: HR services & payroll platform for remote teams.
- Globalization Partners: Global Employer of Record platform.
- GoGlobal: Fastest-growing independent EOR firm
EOR Services FAQs
What is an ERO?
ERO stands for ‘Employer of Record’. It is an essential component of an internationally-compliant payroll, since it’s what most providers use in order to be the legal employer of a worker in their country. Through this practice, a company doesn’t need to set up a legal entity in that country in order to stay compliant with the local labor laws.
What is global payroll?
The term “global payroll” refers to the compensation that a company needs to make to its foreign employees, independent contractors, and freelancers. Typically handled by the HR or finance departments, it includes salaries, tax withholdings, invoicing, benefits, bonuses, PTO, overtime, commissions, and of course, international bank transfers.
Last Advice on Picking an EOR Service Provider
Ultimately, the question of whether to engage an EOR services firm, pick a global payroll solution, or hire people as independent contractors, is one that will require a lot of self-examination and planning. You have to think about the level of liability and workload that you’d like to keep, and consider the cost of doing it in-house versus the quote from an EOR company.
When looking at some of these companies, you also have to do some deep digging into how they operate within the countries you’re interested in. Some companies tend to partner with other EOR services firms and don’t really have people of their own within that region, which can be important when your employee needs timely support regarding their contract, taxes, or benefits.
We’d recommend reaching out to the companies listed here that you may have found interesting, getting a quote based on your current global expansion plans, and examining how you feel while interacting with these people. An EOR services firm will become a crucial part of your relationship with your employees, so it’s important that you feel comfortable with them.
If you’re not quite there yet and are looking for a global payroll solution that lets you hire employees overseas while staying compliant, but take care of most of the process yourself, check out our roundup of the best global payroll software.
Top Employer of Record Services
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