An employer of record is a company that becomes the legal employer of your worker in a country where you have no legal entity, while you keep directing the actual work [1][3]. It hires the person through its own registered local entity, signs an employment contract that satisfies that country's law, runs local payroll, withholds and remits income tax and social contributions, and administers statutory benefits [1][2]. You pay the provider one invoice covering salary, employer-side contributions, and a service fee, and the provider pays the worker in local currency [2]. The practical appeal is speed, since registering your own entity commonly runs three to twelve months while an EOR can have someone employed in days [2][3]. This is general information about how the arrangement operates, not legal advice.
\n","summary":"An EOR hires your worker through its own registered entity in their country, signs a locally compliant employment contract, runs payroll, and remits local income tax and social contributions, while you set the pay and direct the work. This answer walks the mechanics, the invoice math, the split of responsibility across client, EOR, and worker, the owned-entity versus partner-entity distinction, and the four exposures it does not absorb.","publishedAt":"2026-07-21T19:57:30.067","verifiedAt":"2026-07-21T00:00:00","editorialStatus":"APPROVED","lastReviewedAt":"2026-07-21T00:00:00","nextReviewDueAt":"2026-10-21T00:00:00","templateVersion":"v2","aliases":["How does an employer of record work?","What does an EOR do?","EOR meaning in HR","What is an EOR service?","Who is the legal employer when you use an EOR?","Employer of record explained","How do you hire abroad without a legal entity?","What does an employer of record actually handle?","How does global employment through an EOR work?","What are the risks of using an employer of record?","How long does it take to hire through an EOR?","Employer of record vs opening your own entity"],"confidenceScore":88,"confidenceLabel":"High","canonicalUrl":null},"contributor":{"id":"ec39deab-44fe-48d8-9029-fefe993ab85a","slug":"answer-stack","displayName":"AnswerStack","websiteUrl":null},"contributorOrganizationProfile":{"entityId":"ec39deab-44fe-48d8-9029-fefe993ab85a","legalName":null,"description":null,"websiteUrl":null,"imageUrl":null,"slogan":null,"subtitle":null,"facts":[],"coiNote":null,"foundingDate":null,"numberOfEmployeesText":null,"contactPoint":null,"address":null,"headquartersText":null,"organizationType":null},"contributorPerson":{"slug":"answerstack-editorial-team","displayName":"AnswerStack Editorial Team"},"sections":[{"id":"d3d90295-1c03-4597-8ba0-ed8be054f85c","sectionKey":"what_an_eor_is","sectionType":"markdown_section","heading":"What is an employer of record?","introMarkdown":"An employer of record is a company that takes on the legal employer role for a worker in a specific country so another company can employ that person without registering an entity of its own there [1][3]. The worker signs an employment contract with the EOR rather than with the business they work for every day [1]. The EOR's entity is the name on the payslip, the local tax filings, and the social security registration, while the client decides what the person works on, what they are paid, and whether they stay [1].\n\n### The split that defines the model\n\nThe arrangement separates the legal employment relationship from the working relationship. An EOR assumes the role of legal employer for anyone you hire, and your organization keeps control over setting salaries, managing day to day operations, and assessing job performance [1][3].\n\nThat separation is what makes the model fast. Registering a company abroad usually means a local address, sometimes a resident director, a corporate bank account, registrations with the tax and social insurance authorities, and local bookkeeping. Vendors put entity setup at roughly three to twelve months and EOR onboarding at days [2][3].\n\n### How does this relate to the US PEO rules?\n\nThe neighboring US arrangement is the professional employer organization, which the IRS certifies through a voluntary program required by the Tax Increase Prevention Act of 2014 [4]. That statute makes a certified organization responsible for reporting, withholding, and paying employment taxes on a worksite employee's wages without regard to the receipt or adequacy of payment from the customer [5]. No equivalent certification exists elsewhere, and EOR work runs under each country's own rules for employment agencies and labor leasing [11].","introHtml":"An employer of record is a company that takes on the legal employer role for a worker in a specific country so another company can employ that person without registering an entity of its own there [1][3]. The worker signs an employment contract with the EOR rather than with the business they work for every day [1]. The EOR's entity is the name on the payslip, the local tax filings, and the social security registration, while the client decides what the person works on, what they are paid, and whether they stay [1].
\nThe arrangement separates the legal employment relationship from the working relationship. An EOR assumes the role of legal employer for anyone you hire, and your organization keeps control over setting salaries, managing day to day operations, and assessing job performance [1][3].
\nThat separation is what makes the model fast. Registering a company abroad usually means a local address, sometimes a resident director, a corporate bank account, registrations with the tax and social insurance authorities, and local bookkeeping. Vendors put entity setup at roughly three to twelve months and EOR onboarding at days [2][3].
\nThe neighboring US arrangement is the professional employer organization, which the IRS certifies through a voluntary program required by the Tax Increase Prevention Act of 2014 [4]. That statute makes a certified organization responsible for reporting, withholding, and paying employment taxes on a worksite employee's wages without regard to the receipt or adequacy of payment from the customer [5]. No equivalent certification exists elsewhere, and EOR work runs under each country's own rules for employment agencies and labor leasing [11].
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":10},{"id":"5427cda7-7532-4c5b-99d6-03e57ae0cecb","sectionKey":"responsibility_split","sectionType":"table_section","heading":"Who is responsible for what?","introMarkdown":"Most EOR contracts draw the line the same way: the provider carries the statutory obligations of an employer in that country, and you carry everything about the work itself.","introHtml":"Most EOR contracts draw the line the same way: the provider carries the statutory obligations of an employer in that country, and you carry everything about the work itself.
\n","outroMarkdown":"The last row is the one most often skipped during procurement and the most likely to surface later in diligence [13].","outroHtml":"The last row is the one most often skipped during procurement and the most likely to surface later in diligence [13].
\n","contentJson":{"rows":[{"cells":["Employment contract","Approves terms and salary","Is the counterparty, drafts to local law [1]","Signs with the provider, not you [1]"]},{"cells":["Payroll and payslips","Funds the invoice ahead of payday [2]","Calculates and pays in local currency [2]","Receives net pay locally [2]"]},{"cells":["Tax and social contributions","Reimburses the employer-side cost [2]","Withholds and remits on its own registration [1]","Bears employee-side deductions [1]"]},{"cells":["Benefits","Chooses top-ups above the minimum","Administers pension, healthcare, leave [1]","Enrolls and uses them [1]"]},{"cells":["Right to work checks","Confirms role and start date","Runs the local check before day one [10]","Supplies documents [10]"]},{"cells":["Direction of work","Sets tasks, goals, and reviews [1][3]","Stays out of the work itself [1]","Reports to your managers [1]"]},{"cells":["Termination","Decides on it and funds it","Executes under local notice rules [9]","Receives notice and severance [9]"]},{"cells":["Intellectual property","Needs a complete assignment chain [13]","May be first owner unless it assigns onward [13]","Assigns to the provider [13]"]}],"columns":["Responsibility","Client company","Employer of record","Worker"]},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":20},{"id":"92669123-9456-40a9-a383-b54e37442783","sectionKey":"how_it_works_step_by_step","sectionType":"markdown_section","heading":"How does an EOR arrangement actually work, step by step?","introMarkdown":"The sequence runs from a country feasibility check through a local contract, onboarding, payroll, and eventually an exit, with the provider standing in the employer position at every stage. It opens with the provider confirming it can lawfully employ in that country, at that salary, for that role, since some jurisdictions license the activity and cap how long a worker can stay on the arrangement [11].\n\n### The employment contract\n\nThe worker signs with the provider's local entity, in the local language where the law requires it, on terms that country recognizes [1]. Probation length, notice period, working hours, minimum leave, and any mandatory additional month of salary come from local statute rather than your home-country template. Your commercial terms live in a separate agreement the worker is not a party to, which is why the intellectual property chain needs attention [13].\n\n### Onboarding and right to work checks\n\nBefore the start date the provider runs whatever verification the jurisdiction requires, and that obligation sits with the provider as the employer. A UK employer must check that a job applicant is allowed to work in the UK before employing them and repeat the check when a time-limited permission expires, with a civil penalty for employing an illegal worker after an incorrect check [10].\n\n### Payroll, benefits, and contributions\n\nPayroll runs on the country's normal cycle rather than yours. The provider calculates gross to net under local rules, withholds income tax and the employee share of social contributions, adds the employer share, and remits both under its own registration [1][2]. Statutory benefits follow the same route, covering pension or social insurance, state healthcare contributions, and minimum paid leave, with supplementary benefits priced separately [1].\n\n### Ending the employment\n\nTermination goes through the provider and follows the local rulebook. You decide to end the relationship and you fund the cost, and the provider executes it in a form the local law will accept [2]. UK statutory minimum notice alone is one week for service between one month and two years, then one week per year up to twelve weeks [9].","introHtml":"The sequence runs from a country feasibility check through a local contract, onboarding, payroll, and eventually an exit, with the provider standing in the employer position at every stage. It opens with the provider confirming it can lawfully employ in that country, at that salary, for that role, since some jurisdictions license the activity and cap how long a worker can stay on the arrangement [11].
\nThe worker signs with the provider's local entity, in the local language where the law requires it, on terms that country recognizes [1]. Probation length, notice period, working hours, minimum leave, and any mandatory additional month of salary come from local statute rather than your home-country template. Your commercial terms live in a separate agreement the worker is not a party to, which is why the intellectual property chain needs attention [13].
\nBefore the start date the provider runs whatever verification the jurisdiction requires, and that obligation sits with the provider as the employer. A UK employer must check that a job applicant is allowed to work in the UK before employing them and repeat the check when a time-limited permission expires, with a civil penalty for employing an illegal worker after an incorrect check [10].
\nPayroll runs on the country's normal cycle rather than yours. The provider calculates gross to net under local rules, withholds income tax and the employee share of social contributions, adds the employer share, and remits both under its own registration [1][2]. Statutory benefits follow the same route, covering pension or social insurance, state healthcare contributions, and minimum paid leave, with supplementary benefits priced separately [1].
\nTermination goes through the provider and follows the local rulebook. You decide to end the relationship and you fund the cost, and the provider executes it in a form the local law will accept [2]. UK statutory minimum notice alone is one week for service between one month and two years, then one week per year up to twelve weeks [9].
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":30},{"id":"9cc53279-0e0d-4539-aac5-c48f3882521f","sectionKey":"money_flow","sectionType":"markdown_section","heading":"How does the money actually flow?","introMarkdown":"You pay the provider and the provider pays everyone else. A monthly EOR invoice carries the worker's gross salary, the employer-side statutory contributions that country levies on that salary, and the provider's service fee. You supply the funds, and the provider sends payment in the employee's local currency and distributes the payslips [2].\n\n### Timing runs backwards from payday\n\nFunds have to clear before the local payroll date, so providers set a funding cutoff several days ahead and invoice in advance rather than in arrears. Currency conversion happens on the provider's side, so the rate and any spread applied to it belong in the contract rather than in an assumption. Many providers also hold a deposit or accrue against future severance, because they are the party legally obliged to pay a terminated worker whether or not you have wired the money, the same principle US law applies to certified professional employer organizations [5].\n\n### The employer-side load is the part that surprises people\n\nEmployer contributions vary widely between jurisdictions, which is why a matching salary in two countries can produce very different invoices [2]. Comparing providers on the service fee alone misses most of the number, so ask for a per-country breakdown with contributions itemized separately.","introHtml":"You pay the provider and the provider pays everyone else. A monthly EOR invoice carries the worker's gross salary, the employer-side statutory contributions that country levies on that salary, and the provider's service fee. You supply the funds, and the provider sends payment in the employee's local currency and distributes the payslips [2].
\nFunds have to clear before the local payroll date, so providers set a funding cutoff several days ahead and invoice in advance rather than in arrears. Currency conversion happens on the provider's side, so the rate and any spread applied to it belong in the contract rather than in an assumption. Many providers also hold a deposit or accrue against future severance, because they are the party legally obliged to pay a terminated worker whether or not you have wired the money, the same principle US law applies to certified professional employer organizations [5].
\nEmployer contributions vary widely between jurisdictions, which is why a matching salary in two countries can produce very different invoices [2]. Comparing providers on the service fee alone misses most of the number, so ask for a per-country breakdown with contributions itemized separately.
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":40},{"id":"1177b537-f524-458e-9d50-514f84adbd17","sectionKey":"what_the_eor_does_not_absorb","sectionType":"markdown_section","heading":"What does an employer of record not absorb?","introMarkdown":"Four exposures stay with the client company even under a well-run EOR arrangement, and a standard service agreement does not cover them without specific drafting. This is general information rather than legal advice.\n\n### Intellectual property\n\nBecause the provider is the legal employer and the party to the employment contract, work produced by the employee can vest first in the provider rather than in you. Unless the arrangement includes clear assignment provisions linking all three parties, the EOR may be the first owner of any intellectual property developed by the worker and not the client [13]. The worker generally cannot assign directly to you either, since you are not a party to the engagement between the provider and the worker [13]. The workable structure is a chain: the employee assigns to the provider in the employment contract, and the provider assigns to you in the service agreement, with warranties covering whatever the first link misses [13]. Acquirers examine that chain in diligence, and a break in it can delay a deal [13].\n\n### Permanent establishment\n\nAn EOR reduces the chance of creating a taxable presence abroad without settling the question. Whether a foreign company has an office or other fixed place of business is decided on the facts of each case, and an agent's office counts as the principal's own where the agent has authority to negotiate and conclude contracts in the principal's name and regularly exercises it [7]. An engineer working through a provider is unlikely to create that exposure, while a country manager who signs customer contracts for you is a different fact pattern regardless of whose payroll they sit on. Providers position the model as protection against permanent establishment [2], which holds for the ordinary case rather than for every role.\n\n### Misclassification\n\nMoving a worker onto an EOR is usually the cure for a misclassification problem rather than the cause of one. The exposure that remains is anyone you keep engaging as a contractor who is functioning as an employee. US common law rules examine behavioral control, financial control, and the nature of the relationship, and an employer that classifies an employee as a contractor without a reasonable basis may be held liable for employment taxes for that worker [6].\n\n### Who actually controls the work\n\nSome jurisdictions look past the paperwork to who behaves as the employer, which is what labor leasing statutes exist to police [11][12]. Guard that line in daily practice as well as in the contract, particularly on disciplinary process, which the provider is supposed to own.","introHtml":"Four exposures stay with the client company even under a well-run EOR arrangement, and a standard service agreement does not cover them without specific drafting. This is general information rather than legal advice.
\nBecause the provider is the legal employer and the party to the employment contract, work produced by the employee can vest first in the provider rather than in you. Unless the arrangement includes clear assignment provisions linking all three parties, the EOR may be the first owner of any intellectual property developed by the worker and not the client [13]. The worker generally cannot assign directly to you either, since you are not a party to the engagement between the provider and the worker [13]. The workable structure is a chain: the employee assigns to the provider in the employment contract, and the provider assigns to you in the service agreement, with warranties covering whatever the first link misses [13]. Acquirers examine that chain in diligence, and a break in it can delay a deal [13].
\nAn EOR reduces the chance of creating a taxable presence abroad without settling the question. Whether a foreign company has an office or other fixed place of business is decided on the facts of each case, and an agent's office counts as the principal's own where the agent has authority to negotiate and conclude contracts in the principal's name and regularly exercises it [7]. An engineer working through a provider is unlikely to create that exposure, while a country manager who signs customer contracts for you is a different fact pattern regardless of whose payroll they sit on. Providers position the model as protection against permanent establishment [2], which holds for the ordinary case rather than for every role.
\nMoving a worker onto an EOR is usually the cure for a misclassification problem rather than the cause of one. The exposure that remains is anyone you keep engaging as a contractor who is functioning as an employee. US common law rules examine behavioral control, financial control, and the nature of the relationship, and an employer that classifies an employee as a contractor without a reasonable basis may be held liable for employment taxes for that worker [6].
\nSome jurisdictions look past the paperwork to who behaves as the employer, which is what labor leasing statutes exist to police [11][12]. Guard that line in daily practice as well as in the contract, particularly on disciplinary process, which the provider is supposed to own.
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":50},{"id":"3659d922-5cf4-4cfd-9c9f-97a144a4b113","sectionKey":"owned_vs_partner_entity","sectionType":"markdown_section","heading":"Does the provider own the local entity, or subcontract it?","introMarkdown":"Some providers employ your worker through an entity they own in that country, and others sign with you and then subcontract the actual employment to a local partner. Deel describes itself as operating with owned entities in over 110 countries and calls the alternative an aggregator model that uses local third-party partners [2]. G-P describes over 100 wholly owned entities and contrasts that with providers routing employment through local third-party providers or subcontractors [3].\n\nThe distinction changes things buyers rarely ask about. Liability runs through a longer chain, since your remedy is against the platform and the platform's remedy is against a partner you did not select and cannot audit. The intellectual property assignment chain gains a fourth link, and it only works if every link holds [13].\n\nProviders answer this readily when asked directly. Request the list of countries where the provider owns the employing entity, and ask which legal entity name will appear on the employment contract in each country you plan to hire in. Almost no provider owns entities everywhere it sells.","introHtml":"Some providers employ your worker through an entity they own in that country, and others sign with you and then subcontract the actual employment to a local partner. Deel describes itself as operating with owned entities in over 110 countries and calls the alternative an aggregator model that uses local third-party partners [2]. G-P describes over 100 wholly owned entities and contrasts that with providers routing employment through local third-party providers or subcontractors [3].
\nThe distinction changes things buyers rarely ask about. Liability runs through a longer chain, since your remedy is against the platform and the platform's remedy is against a partner you did not select and cannot audit. The intellectual property assignment chain gains a fourth link, and it only works if every link holds [13].
\nProviders answer this readily when asked directly. Request the list of countries where the provider owns the employing entity, and ask which legal entity name will appear on the employment contract in each country you plan to hire in. Almost no provider owns entities everywhere it sells.
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":60},{"id":"f18b7216-19cb-49f2-aef5-95506d4b9b1b","sectionKey":"limits_and_what_to_watch","sectionType":"markdown_section","heading":"Where does the model run into limits?","introMarkdown":"Country rules, termination law, and the exit path are where EOR arrangements go sideways.\n\n### Some countries restrict or time-limit the model\n\nGermany treats much of what an EOR does as temporary agency work. Under the Act on Temporary Agency Work, an employer assigning employees to a user undertaking within the scope of its business activity requires a permit, and the same worker may not be assigned to the same user undertaking for more than eighteen consecutive months [11]. Operating without that license carries fines, and the client can be required to employ the worker directly [12]. Comparable rules exist elsewhere, so a provider's license position country by country matters more than its headline country count.\n\n### Notice and severance look nothing like at-will employment\n\nIn forty-nine US states the default is at-will employment, where an employer may end the relationship at any point provided the reason is not unlawful, with Montana requiring good cause once an employee passes probation [8]. Very little of the rest of the world works that way. UK statutory minimum notice alone reaches twelve weeks for long service [9], and many civil law countries add mandatory severance and a documented cause requirement before a dismissal is valid.\n\n### Leaving the provider is a project, not a cancellation\n\nMoving workers to your own entity or to a different provider means new employment contracts, and continuity does not happen on its own. Accrued paid time off does not carry across from a previous EOR contract, benefit plans change and employees notice, and the transfer window can disrupt payroll and compliance if it is not scheduled around existing notice periods [14]. Whether local transfer-of-undertaking protections apply is a question for local counsel rather than the provider's project manager.","introHtml":"Country rules, termination law, and the exit path are where EOR arrangements go sideways.
\nGermany treats much of what an EOR does as temporary agency work. Under the Act on Temporary Agency Work, an employer assigning employees to a user undertaking within the scope of its business activity requires a permit, and the same worker may not be assigned to the same user undertaking for more than eighteen consecutive months [11]. Operating without that license carries fines, and the client can be required to employ the worker directly [12]. Comparable rules exist elsewhere, so a provider's license position country by country matters more than its headline country count.
\nIn forty-nine US states the default is at-will employment, where an employer may end the relationship at any point provided the reason is not unlawful, with Montana requiring good cause once an employee passes probation [8]. Very little of the rest of the world works that way. UK statutory minimum notice alone reaches twelve weeks for long service [9], and many civil law countries add mandatory severance and a documented cause requirement before a dismissal is valid.
\nMoving workers to your own entity or to a different provider means new employment contracts, and continuity does not happen on its own. Accrued paid time off does not carry across from a previous EOR contract, benefit plans change and employees notice, and the transfer window can disrupt payroll and compliance if it is not scheduled around existing notice periods [14]. Whether local transfer-of-undertaking protections apply is a question for local counsel rather than the provider's project manager.
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":70},{"id":"bea9195f-0d46-4f15-8954-9bbcc7a67d8b","sectionKey":"what_an_eor_is_not","sectionType":"markdown_section","heading":"What an employer of record is not","introMarkdown":"Four adjacent arrangements get confused with an EOR, and the differences are structural.\n\n### It is not a professional employer organization\n\nA PEO shares employment responsibilities at a company that already holds its own legal entity and employer registrations in that country, and in the United States it can be certified by the IRS under a defined statutory framework [4][5]. An EOR serves the opposite situation, where you have no entity at all [1].\n\n### It is not a staffing agency\n\nA staffing agency sources candidates and supplies them for a period of work. An EOR engagement usually begins after you have chosen the person and assumes an ongoing employment relationship rather than a placement [1].\n\n### It is not a contractor platform\n\nContractor platforms handle agreements and payments for self-employed people, and the worker stays a contractor without the statutory protections an employee has. Choosing between the two is a classification question governed by local law rather than a pricing decision [6].\n\n### It is not a substitute for your own entity\n\nAn EOR gives you an employed worker in a country, not a registered presence in it [1]. Anything requiring a local legal presence still requires the entity. Most companies use the model as a bridge, hiring through a provider while volume is low and opening an entity once headcount justifies the fixed cost [2].","introHtml":"Four adjacent arrangements get confused with an EOR, and the differences are structural.
\nA PEO shares employment responsibilities at a company that already holds its own legal entity and employer registrations in that country, and in the United States it can be certified by the IRS under a defined statutory framework [4][5]. An EOR serves the opposite situation, where you have no entity at all [1].
\nA staffing agency sources candidates and supplies them for a period of work. An EOR engagement usually begins after you have chosen the person and assumes an ongoing employment relationship rather than a placement [1].
\nContractor platforms handle agreements and payments for self-employed people, and the worker stays a contractor without the statutory protections an employee has. Choosing between the two is a classification question governed by local law rather than a pricing decision [6].
\nAn EOR gives you an employed worker in a country, not a registered presence in it [1]. Anything requiring a local legal presence still requires the entity. Most companies use the model as a bridge, hiring through a provider while volume is low and opening an entity once headcount justifies the fixed cost [2].
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":null,"noteHtml":null,"sortOrder":80},{"id":"4f668418-f2ab-47e4-a68f-7f0e17687974","sectionKey":"contributor_perspective","sectionType":"markdown_section","heading":"How this answer was researched","introMarkdown":"This answer was assembled from the legal instruments that govern the arrangement and from providers' own descriptions of how they operate it. The employment tax framework and the classification test come from the IRS and the United States Code, the fixed place of business rules from the Treasury regulations, the notice and right to work obligations from UK government guidance, and the temporary agency work limits from the German statute. Provider pages are cited only for how the model is operated commercially, because coverage, entity ownership, and onboarding timelines change without notice. None of this is legal advice, and employment law in every country referenced here moves. If you run global employment or work for a provider and something here reads as wrong in practice, corrections with a source are welcome.","introHtml":"This answer was assembled from the legal instruments that govern the arrangement and from providers' own descriptions of how they operate it. The employment tax framework and the classification test come from the IRS and the United States Code, the fixed place of business rules from the Treasury regulations, the notice and right to work obligations from UK government guidance, and the temporary agency work limits from the German statute. Provider pages are cited only for how the model is operated commercially, because coverage, entity ownership, and onboarding timelines change without notice. None of this is legal advice, and employment law in every country referenced here moves. If you run global employment or work for a provider and something here reads as wrong in practice, corrections with a source are welcome.
\n","outroMarkdown":null,"outroHtml":null,"contentJson":{},"configJson":{},"noteMarkdown":"This answer was written and reviewed by the AnswerStack Editorial Team, which has no commercial stake in the products, companies, or methods discussed. Every claim is cited inline and verified on the dates shown.","noteHtml":"This answer was written and reviewed by the AnswerStack Editorial Team, which has no commercial stake in the products, companies, or methods discussed. Every claim is cited inline and verified on the dates shown.
\n","sortOrder":90}],"citations":[{"title":"Employer of Record (EOR)","url":"https://www.deel.com/glossary/employer-of-record/","excerpt":"An Employer of Record (EOR) is an organization that employs and pays your workers compliantly on your behalf.","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-21T00:00:00","supportsText":"Definition of an EOR; the EOR becomes the legal employer and the worker contracts with the EOR rather than the client; creation of employment contracts, benefits administration, and withholding of payroll taxes and employee contributions; the client retains salary setting, day to day operations, and","domain":"deel.com","publisherName":"Deel"},{"title":"What Is an Employer of Record (EOR)? A Complete Guide","url":"https://www.deel.com/blog/employer-of-record-a-complete-guide/","excerpt":"While you supply the funds, an EOR sends payments in each employee's local currency and distributes their payslips.","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-21T00:00:00","supportsText":"Money flow: the client supplies funds and the EOR pays in local currency and distributes payslips; entity setup of three to twelve months versus EOR onboarding in days; the EOR as a silent partner leaving daily operations to the client; permanent establishment positioning; aggregator versus wholly o","domain":"deel.com","publisherName":"Deel"},{"title":"What is an employer of record? Hire without an entity","url":"https://www.globalization-partners.com/blog/what-is-an-eor/","excerpt":"compliantly hire that person in days, not months","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-21T00:00:00","supportsText":"The EOR as sole legal employer responsible for compliance with local labor and employment law while the client directs the work; wholly owned entities in over 100 countries contrasted with providers using local third-party providers or subcontractors; hiring in days rather than months","domain":"globalization-partners.com","publisherName":"G-P (Globalization Partners)"},{"title":"Certified Professional Employer Organization","url":"https://www.irs.gov/businesses/small-businesses-self-employed/certified-professional-employer-organization","excerpt":"The Tax Increase Prevention Act of 2014, enacted December 19, 2014, requires the IRS to establish a voluntary certification program for PEOs which is the CPEO Program.","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-21T00:00:00","supportsText":"PEOs handle payroll administration and tax reporting for client businesses and are typically paid a fee based on payroll costs; the voluntary IRS certification program required by the Tax Increase Prevention Act of 2014; CPEO defined under Internal Revenue Code section 7705(a)","domain":"irs.gov","publisherName":"Internal Revenue Service"},{"title":"26 U.S. Code Section 7705, Certified professional employer organizations","url":"https://www.law.cornell.edu/uscode/text/26/7705","excerpt":"assume responsibility for reporting, withholding, and paying any applicable taxes under subtitle C, with respect to such individual's wages, without regard to the receipt or adequacy of payment from the customer for such services","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-21T00:00:00","supportsText":"Statutory definition of a certified professional employer organization and of a work site employee; the service contract requirement that the organization assume responsibility for reporting, withholding, and paying employment taxes on the individual's wages without regard to the receipt or adequacy","domain":"law.cornell.edu","publisherName":"Cornell Law School Legal Information Institute"},{"title":"Independent contractor (self-employed) or employee?","url":"https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee","excerpt":"There is no 'magic' or set number of factors that 'makes' the worker an employee or an independent contractor and no one factor stands alone in making this determination.","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-21T00:00:00","supportsText":"The common law control test covering behavioral control, financial control, and the type of relationship; the absence of any single deciding factor; employer liability for employment taxes where a worker is improperly classified without a reasonable basis","domain":"irs.gov","publisherName":"Internal Revenue Service"},{"title":"26 CFR Section 1.864-7, Definition of office or other fixed place of business","url":"https://www.law.cornell.edu/cfr/text/26/1.864-7","excerpt":"has the authority to negotiate and conclude contracts in the name of the nonresident alien individual or foreign corporation, and regularly exercises that authority","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-21T00:00:00","supportsText":"Definition of an office or other fixed place of business as a fixed facility through which a nonresident alien or foreign corporation engages in a trade or business; the dependent agent rule where the agent has authority to negotiate and conclude contracts in the principal's name and regularly exerc","domain":"law.cornell.edu","publisherName":"Cornell Law School Legal Information Institute"},{"title":"At-will employment","url":"https://www.law.cornell.edu/wex/at-will_employment","excerpt":"At-will employment is an employment arrangement in which the employee may quit at any time, and the employer may fire the employee for any reason and at any point, so long as the dismissal isn't for an unlawful reason.","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-21T00:00:00","supportsText":"Definition of at-will employment and the unlawful-reason limits on it; Montana as the exception requiring good cause after the probationary period, with the other forty-nine states following the at-will default","domain":"law.cornell.edu","publisherName":"Cornell Law School Legal Information Institute (Wex)"},{"title":"Redundancy: your rights, notice periods","url":"https://www.gov.uk/redundancy-your-rights/notice-periods","excerpt":"one week's notice for each year if employed between 2 and 12 years","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-21T00:00:00","supportsText":"UK statutory minimum notice periods: at least one week between one month and two years of service, one week per year between two and twelve years, and twelve weeks for twelve years or more","domain":"gov.uk","publisherName":"GOV.UK"},{"title":"Check a job applicant's right to work","url":"https://www.gov.uk/check-job-applicant-right-to-work","excerpt":"You must check that a job applicant is allowed to work for you in the UK before you employ them.","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-21T00:00:00","supportsText":"The requirement to check that a job applicant is allowed to work in the UK before employing them, the repeat check when a time-limited permission expires, and the civil penalty for employing an illegal worker without a correct check","domain":"gov.uk","publisherName":"GOV.UK"},{"title":"Act on Temporary Agency Work (Arbeitnehmerueberlassungsgesetz), official English translation","url":"https://www.gesetze-im-internet.de/englisch_a_g/englisch_a_g.html","excerpt":"The temporary work agency may not assign the same temporary agency worker to the same user undertaking for more than 18 consecutive months.","quoteText":null,"sourceRole":"PRIMARY","verifiedAt":"2026-07-21T00:00:00","supportsText":"The permit requirement for employers assigning employees to a user undertaking within the scope of their business activity; the eighteen consecutive month cap on assigning the same worker to the same user undertaking; the existence of national labor leasing regimes governing the EOR model outside th","domain":"gesetze-im-internet.de","publisherName":"Federal Ministry of Justice, Germany"},{"title":"The AUG License in Germany and its Effects on Hiring","url":"https://www.deel.com/blog/aug-license-germany-hiring/","excerpt":"Leasing workers without a license can result in fines of up to 500,000 euros, and the Hirer who received services may be required to employ the worker as a direct employee.","quoteText":null,"sourceRole":"SUPPORTING","verifiedAt":"2026-07-21T00:00:00","supportsText":"How the German license requirement applies in practice to EOR hiring, the eighteen month cap and reset period, the fines for leasing workers without a license, and the risk that the hirer may be required to employ the worker as a direct employee","domain":"deel.com","publisherName":"Deel"},{"title":"Employer of Record arrangements: an overview of the overlooked intellectual property implications","url":"https://www.ensafrica.com/news/detail/10952/employer-of-record-arrangements-an-overview-o","excerpt":"the EOR may be the first owner of any IP developed by the worker and not the client","quoteText":null,"sourceRole":"INDEPENDENT","verifiedAt":"2026-07-21T00:00:00","supportsText":"The EOR may be first owner of IP developed by the worker rather than the client absent assignment provisions linking all three parties; the impracticality of a direct worker-to-client assignment because the client is not party to the EOR and worker engagement; investor and acquirer scrutiny of the I","domain":"ensafrica.com","publisherName":"ENSafrica"},{"title":"Employer of Record Switch: 7 Strategies for a Successful Transition","url":"https://www.deel.com/blog/employer-of-record-switch-strategies/","excerpt":"you can't carry over PTO accruals from a previous EOR contract","quoteText":null,"sourceRole":"SUPPORTING","verifiedAt":"2026-07-21T00:00:00","supportsText":"Transition planning around existing notice periods; inability to carry over PTO accruals from a previous EOR contract; changes to benefit plans on transfer; the system transfer phase as a high-risk period for payroll disruption and compliance exposure","domain":"deel.com","publisherName":"Deel"}],"revisions":[],"relatedAnswers":[{"id":"c9458b53-b52d-4d78-bfb0-9642fb81596a","slug":"should-i-hire-someone-as-a-contractor-or-as","question":"Should I hire someone as a contractor or as an employee through an EOR?","publishedAt":"2026-07-21T20:04:33.818","confidenceScore":86,"confidenceLabel":"High","industry":{"id":"e1a1da3c-52a8-4e99-88ad-d08ef17d7c3f","slug":"hr-technology","label":"HR Technology","description":"ATS, HRIS, payroll, and workforce management"},"topic":{"slug":"global-distributed-workforce","label":"Global & Distributed Workforce","description":"Employer of Record (EOR), Contractor Management, Contractor of Record, Freelancer Management, Global Employment Platforms, Relocation Management","schemaKind":null},"contributor":{"id":"ec39deab-44fe-48d8-9029-fefe993ab85a","slug":"answer-stack","displayName":"AnswerStack","websiteUrl":null},"snippet":"Classification is a legal conclusion drawn from how the work is actually performed, so this turns on control, exclusivity, permanence, and integration rather than preference. Covers the IRS behavioral, financial, and relationship factors, state ABC tests, UK off-payroll rules, the EU platform work directive, the cost of getting it wrong under Internal Revenue Code section 3509, and the triggers for converting a contractor to employment.","url":"/q/should-i-hire-someone-as-a-contractor-or-as"},{"id":"a220094f-7f58-4a32-bd75-90a8f49c44ae","slug":"whats-the-best-eor-global-employment-platform-deel-vs","question":"What's the best EOR / global employment platform (Deel vs Rippling vs Remote)?","publishedAt":"2026-07-21T19:57:38.241","confidenceScore":80,"confidenceLabel":"Medium","industry":{"id":"e1a1da3c-52a8-4e99-88ad-d08ef17d7c3f","slug":"hr-technology","label":"HR Technology","description":"ATS, HRIS, payroll, and workforce management"},"topic":{"slug":"global-distributed-workforce","label":"Global & Distributed Workforce","description":"Employer of Record (EOR), Contractor Management, Contractor of Record, Freelancer Management, Global Employment Platforms, Relocation Management","schemaKind":null},"contributor":{"id":"ec39deab-44fe-48d8-9029-fefe993ab85a","slug":"answer-stack","displayName":"AnswerStack","websiteUrl":null},"snippet":"Fit beats ranking here. Deel leads on breadth of owned-entity coverage and contractor tooling, Rippling suits teams consolidating HR, payroll, and device management on one record, and Remote suits buyers who want a single owned-entity chain with no standing deposit. Oyster, Pebl, Multiplier, Papaya Global, and G-P win in narrower situations. Published list prices run roughly $400 to $770 per employee per month, and every coverage count is vendor-stated.","url":"/q/whats-the-best-eor-global-employment-platform-deel-vs"},{"id":"5186cb71-8450-45df-849e-a22b5792b70c","slug":"whats-the-difference-between-an-eor-and-a-peo","question":"What's the difference between an EOR and a PEO, and which one do I need?","publishedAt":"2026-07-21T19:57:35.653","confidenceScore":90,"confidenceLabel":"High","industry":{"id":"e1a1da3c-52a8-4e99-88ad-d08ef17d7c3f","slug":"hr-technology","label":"HR Technology","description":"ATS, HRIS, payroll, and workforce management"},"topic":{"slug":"global-distributed-workforce","label":"Global & Distributed Workforce","description":"Employer of Record (EOR), Contractor Management, Contractor of Record, Freelancer Management, Global Employment Platforms, Relocation Management","schemaKind":null},"contributor":{"id":"ec39deab-44fe-48d8-9029-fefe993ab85a","slug":"answer-stack","displayName":"AnswerStack","websiteUrl":null},"snippet":"A PEO co-employs staff at a business that already has its own legal entity, while an EOR becomes the sole legal employer where the client has no entity. That difference drives entity requirements, liability, benefits sourcing, and country availability. US PEOs can hold voluntary IRS certification that shifts federal employment tax liability for work site employees, and EOR arrangements face country limits such as Germany's employee leasing rules.","url":"/q/whats-the-difference-between-an-eor-and-a-peo"},{"id":"db9cec91-4d50-412b-bd9f-bbe8ed58885a","slug":"how-much-does-an-employer-of-record-cost-per","question":"How much does an employer of record cost per employee?","publishedAt":"2026-07-21T19:57:33.078","confidenceScore":86,"confidenceLabel":"High","industry":{"id":"e1a1da3c-52a8-4e99-88ad-d08ef17d7c3f","slug":"hr-technology","label":"HR Technology","description":"ATS, HRIS, payroll, and workforce management"},"topic":{"slug":"global-distributed-workforce","label":"Global & Distributed Workforce","description":"Employer of Record (EOR), Contractor Management, Contractor of Record, Freelancer Management, Global Employment Platforms, Relocation Management","schemaKind":null},"contributor":{"id":"ec39deab-44fe-48d8-9029-fefe993ab85a","slug":"answer-stack","displayName":"AnswerStack","websiteUrl":null},"snippet":"Published EOR platform fees sit between USD 199 and USD 699 per employee per month, but the fee is a small slice of the bill. Gross salary plus statutory employer contributions, which run from under 8 percent of pay in the United States to about 45 percent in France, dominate the total. This answer breaks the invoice into seven layers, compares published vendor rates, and works the math for three countries.","url":"/q/how-much-does-an-employer-of-record-cost-per"}],"contributorStats":{"verifiedAnswers":224,"openDisputes":0},"schemaJson":{"@context":"https://schema.org","@type":"Question","name":"What is an employer of record (EOR) and how does it actually work?","text":"What is an employer of record (EOR) and how does it actually work?","url":"https://www.answerstack.io/q/what-is-an-employer-of-record-eor","answerCount":1,"datePublished":"2026-07-21T19:57:30.067","author":{"@type":"Person","name":"AnswerStack Editorial Team","worksFor":{"@type":"Organization","name":"AnswerStack"},"url":"https://www.answerstack.io/contributors/answer-stack"},"about":[{"@type":"Thing","name":"Global & Distributed Workforce"},{"@type":"Thing","name":"HR Technology"}],"acceptedAnswer":{"@type":"Answer","text":"An employer of record is a company that becomes the legal employer of your worker in a country where you have no legal entity, while you keep directing the actual work [1][3]. It hires the person through its own registered local entity, signs an employment contract that satisfies that country's law, runs local payroll, withholds and remits income tax and social contributions, and administers statutory benefits [1][2]. You pay the provider one invoice covering salary, employer-side contributions, and a service fee, and the provider pays the worker in local currency [2]. The practical appeal is speed, since registering your own entity commonly runs three to twelve months while an EOR can have someone employed in days [2][3]. This is general information about how the arrangement operates, not legal advice.","url":"https://www.answerstack.io/q/what-is-an-employer-of-record-eor","upvoteCount":0,"datePublished":"2026-07-21T19:57:30.067","dateModified":"2026-07-21T00:00:00","author":{"@type":"Person","name":"AnswerStack Editorial Team","worksFor":{"@type":"Organization","name":"AnswerStack"},"url":"https://www.answerstack.io/contributors/answer-stack"},"citation":[{"@type":"CreativeWork","name":"Employer of Record (EOR)","url":"https://www.deel.com/glossary/employer-of-record/"},{"@type":"CreativeWork","name":"What Is an Employer of Record (EOR)? A Complete Guide","url":"https://www.deel.com/blog/employer-of-record-a-complete-guide/"},{"@type":"CreativeWork","name":"What is an employer of record? 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