If you need to hire employees around the world and don’t own entities in different countries, you can partner with an Employer of Record (EOR) to help you. These service providers not only make global hiring possible but also support you with a wide range of other professional services, letting you stay focused on your core business activities. Choosing the right provider to partner with is not easy, however, and one of the biggest factors to consider is price and pricing transparency
In this guide we look at how much EORs generally cost, the different components of EOR pricing and what to be aware of when choosing an EOR based on price.
What is an Employer of Record (EOR)?
An Employer of Record service provider operates a networks of legal entities around the world, which may include only entities they own or third-party entities that they partner with. If a company is looking to hire employees in a foreign country but doesn’t own an entity there, you can engage an EOR provider, which will put the employee on an already established, compliant local payroll.
It does this by concluding employment agreements between its entity in the country and the workers you want to hire, becoming their legal employer in that country. The EOR will also manage payroll and HR for those workers and take on the responsibility of maintaining compliance with the country’s applicable employment and tax laws.
For example, imagine your company is based in the U.S., but you’ve found a couple of brilliant software developers in India you want to hire as full-time employees: You don’t own a registered business in India, so you engage an EOR instead. The EOR hires them through its entity and manages their HR needs, including paying their salaries, personal income taxes, and social security contributions in India. In exchange for these services, you pay the EOR a (usually monthly) fee for each employee it manages for you.
How Much Do EOR Services Cost?
EOR services vary wildly depending on the provider chosen and the country of hire. There are also multiple pricing models: While most charge on a per person, per month basis, some still charge as a percentage of payroll (e.g., as an example of the latter, check out our review of EPG).
When looking at raw price, some EORs (e.g., Native Teams or RemoFirst) go as low as $99 per employee per month for hiring in low cost venues like the Philippines or India. More commonly, pricing starts at around $599 per employee per month (e.g., Deel and Remote).
Companies on the lower end of this range tend to focus on the core EOR service, while those on the higher end of the scale typically justify their pricing with high-end tech platforms, integrations and add-ons and/or a boutique, personalized service.
What’s the alternative?
Many business owners might consider this extra fee expensive, even at the lower end. However, it’s important to take into account the alternative cost of hiring employees in other countries. If you don’t use an EOR, you’ll need to incorporate an entity in each country where you want to hire.
While the cost of entity registration can vary widely from under $100 in fees to thousands of dollars, that’s not all you’ll need to pay for: In addition to one-time incorporation fees, you need to pay for HR, tax, and legal specialists to manage HR for your international employees and ensure legal compliance.
Unless you’re going to work directly in that country’s market and hire a significant number of employees, these costs can be prohibitively expensive. Working with an EOR is almost always a more cost-efficient option.
The other option, hiring independent contractors overseas, runs the real risk of employee misclassification: The arrangement could be classified by the tax and employment authorities as having the nature of employment and charge back-taxes and penalties accordingly.
What Are the Factors That Affect EOR Pricing?
The range from $99 up to $999 for EOR prices may seem confusing. What would justify a tenfold difference in fees for the same service? The answer is that the service isn’t the same for several important reasons, with all of the following factors contributing to vastly different pricing:
Country of Your New Hire
As mentioned, one of the biggest factors that affects pricing is the country where EOR services are provided. This makes sense because EOR services need to be provided by staff working for entities registered in different countries. Those entities have different overheads and pay their staff vastly different salaries, in addition to the costs associated with providing payroll, tax, and benefits management in different countries. This is why hiring through an EOR in India will be much more affordable than hiring in the US or Western Europe, for example.
Services & Support Provided
The standard range of prices of $99-$999 for an EOR to manage a single employee actually represent just the starting point offered publicly by providers around the world. This means that these prices include the core services that all EORs provide, which are: hiring your employees, ensuring legal compliance, managing payroll, and administering mandatory benefits.
However, most EORs offer a lot of other, additional services that can include:
- Recruitment
- Relocation support (visas and work permits)
- Supplementary benefits administration
- Employee engagement
- Employee equity management aka stock options or ESOP (many EORs have integrated with Carta)
- Equipment provision
- Background checks
- Expert consultations
- Business planning advice
Some more expensive EORs create packages that automatically include these otherwise non-standard services. These additions partially justify their higher fees. They may also provide more personalized, white-glove service, which can also explain their higher prices.
Contract Duration
Like most businesses, EOR service providers want to ensure long-term income from their clients, and many have minimum contract terms: For example, Deel requires that clients sign up for a year while others offer a pay-as-you go model, such as Remote or Pebl. For those who offer both monthly and annual contract terms, many offer a reduced monthly rate when clients sign on to annual service agreements instead of monthly contracts. In practice, we’ve seen that monthly EOR fees can reduce around $100 when committing annually.
Number of EOR Hires
Since higher volumes can ensure greater income for most businesses, many EORs offer discounted rates for businesses that hire greater numbers of employees. These discounts may be substantial. For example, an EOR may set its starting price at $300 PEPM, but for above ten employees, may drop this price to $200 PEPM.
Pricing Models of an EOR
Not all EORs plan their fees in the same way. They typically choose one of the following pricing models for their services:
- (Most common) Fixed per employee per month fee. Most EOR service providers charge fixed fees, with a range of starting prices of $99-$999 PEPM. They typically increase these fees when hiring in more expensive countries. This is by far the most popular pricing model.
- Custom pricing. Some EORs don’t provide any set prices but instead, provide tailored service packages to their clients with custom prices based on the number of people they’ll hire, the locations, and the services required.
- Percentage of employee salary. As we saw above, some EORs will charge a fixed percentage of each employee’s salary as their service fee. These fees can range from 5% to 25% in most cases.
- Monthly service fee. Some EORs charge a flat monthly fee for their services, similar to a subscription, no matter how many employees are hired or where they work.
Which Components Make Up EOR Cost?
We have detailed how different EORs charge their core fee for different EOR services. But it is worth pointing out that this is not the total amount a client pays to an EOR. The client, of course needs to pay the total cost of hiring the employee (their gross salary and benefits, commonly known as payroll burden of labor burde)n.In addition, clients should bear in mind that they need to pay:
- One-off onboarding or setup fees. This is often charged through adding on an extra month of the monthly service fee.
- Offboarding / termination fee. This is the cost associated with offboarding an employee from the system, as that involves extra administration for the EOR.
- Expense management fees. It is common for EORs to charge extra for expense reimbursement services.
- Work visa and immigration fees. If a worker needs a visa for their work, the costs associated with that will not covered in the standard EOR fee.
- Currency conversion (FX) markups. This is a major cost, often overlooked and intentionally ‘hidden’ by providers. Given the large sums involved in payroll it is common for EOR provider to make more on this from clients than they do from their prescribed fee.
- Additional compliance or filing costs. This may apply for any unusual employee paperwork.
- EOR Security deposit. Some EOR providers require a security deposit, often equal to 1 month of total employment cost or some fixed amount per employee. This covers severance exposure, notice-period costs, payroll emergencies, FX volatility and government audits or penalties. These deposits are usually refundable when the contract ends, but can significantly increase upfront costs, especially in high-severance jurisdictions (e.g., Brazil, India, France).
How to Select an EOR Based on Price
While price isn’t the only factor to use when selecting a service provider to partner with, it’s one of the most important for most businesses. After all, the price of this service has to be included when calculating the price of hiring international talent. Most organizations set a budget for hiring that includes salaries and recruitment fees, and EOR fees should be rolled into salary estimates. Once this budget is set, organizations look at prices for employees around the world to find workers they can afford, including their EOR service fees. Any provider with fees that exceed their budgets is eliminated from consideration.
Keep in mind that it is the total cost of using the EOR, not just their monthly service fee, that you should pay attention to. Many hide significant costs in their FX mark-ups and onboarding fees.
Why Choose a Cheaper EOR?
Cost savings will, of course, be the primary reason to search out an EOR provider with low fees. At the same time, many of these providers offer only core EOR services and may also not provide discounted rates for long-term contracts or multiple employee hires. However, they may offer additional services for affordable prices, and clients can typically choose only the extra services they need. This gives them flexibility and helps them stay agile.
Why Choose a Premium EOR?
EOR providers with higher fees may offer extensive packages for those fees that include a high-end platform, extensive integrations and tailored support. Clients who want to outsource as much as possible will find that these comprehensive packages conveniently help them remain completely hands-off.
A lot of white-glove EORs such as G-P or WorkMotion also provide highly attentive service, both to the clients themselves and to their employees. This attention may be costlier, but for employers who hire top talent internationally and need to keep them happy, this extra attention can be worthwhile.
Written by
Courtney Pocock is a Copywriter & EOR/PEO Researcher at Employsome with 15+ years of experience writing for the HR, corporate, and financial sectors. She has a strong interest in global business expansion and Employer of Record / PEO topics, focusing on news that matters to business owners and decision-makers. Courtney covers industry updates, regulatory changes, and practical guides to help leaders navigate international hiring with confidence.
Our content is created for informational purposes only and is not intended to provide any legal, tax, accounting, or financial advice. Please obtain separate advice from industry-specific professionals who may better understand your business’s needs. Read our Editorial Guidelines for further information on how our content is created.
