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What Is An Employer Of Record? How Can It Benefit You?

Choosing our SaaS based PEO/EOR Solution enables you to build and manage 100% pure remote teams and expand into new markets 90% faster.

Table of Contents

What is an Employer of Record?

An Employer of Record (EOR) is an external entity that oversees onboarding and administrative HR activities on your behalf. EORs allow you to recruit internationally without establishing an entity in multiple countries.

Now let’s understand how they do it.

EORs have legal entities in the countries available for their recruitment services. This means companies partnering with Employer of Records can mitigate risks by hiring international employees because it is the EOR’s responsibility for legal compliance in those countries.

What can EOR Services do for you?

An employer of record (EOR) is a third-party service that enables small, medium, and enterprise-level businesses to outsource recruitment and employee management activities. EOR services can handle everything from legal compliance to payroll processing for employees working in different countries.

An Employer of Record’s primary services includes employee onboarding, record maintenance, payroll, tax filing, commissions, health insurance, and other employee benefits for your business. 

EOR services can also greatly assist in your company’s global expansion. With their help, you can hire international candidates seamlessly. Their legal presence in other countries makes compliance easy while employing full-time overseas employees.

Who is the Employer of Record?

The employer of record, the actual on-paper employer, is the EOR service you partner with. However, your employees would still work for your organization like any other full-time employee. Their day-to-day management and performance evaluation will remain under the client’s umbrella.

Before partnering with EOR services, many businesses assume that an Employer of Record will be a part of their HR strategies and decisions. However, this is not the case. While some EORs may extend their service package to HR consulting, an EOR at its core does not assist with HR strategies.

Decisions like hiring, firing, benefits, and compensation still remain in your hands.

An EOR is simply your way to onboarding global employees, but the choice of employees remains with you 100% of the time.

Benefits of working with an Employer of Record


HR activities like onboarding new employees to processing payroll require constant attention. Time-consuming tasks such as processing individual taxes, commissions, reimbursements, and other employee benefits require you to be detail-oriented to avoid hefty penalties. With EOR companies, you have access to reliable services for managing these activities on your behalf. This way, you save time for core strategies you can focus on to grow your business.


When you entrust EORs to essential tasks such as employee management, payroll processing, and other HR-based activities, you have the benefit of availing the services of a highly competent organization. EORs have the required experience and knowledge within this field. Their tested and proven processes make them more than capable of delivering precise calculations for payroll and compliance.


The Employer of Record maintains all your confidential data for each of your employees. More often than not, they have a reliable and efficient system with dedicated personnel for data management that makes it easy to update your records.


International employee and payroll management involve maintaining legal compliance for every country of operation. One of EORs’ main services is keeping up with the various labor laws and tax tables of countries they have legal entities in. With experts such as lawyers and accountants handling these activities, EORs significantly reduce their clients’ compliance risks.

How much does an Employer of Record cost?

EOR pricing structures have two types: percentage rates and flat rates.

Percentage rates get their costing from your employees’ salaries. This structure seems to be a good option with a small workforce; however, retaining experienced employees through promotions, incentives, and wage raises can prove more costly in the long term.

Percentage rates used to be the industry standard; however, more and more companies are transitioning to flat rates due to the affordability of this structure.

With flat rates, you only pay for the service per employee. An Employer of Record costs typically ranges between $250 – $500 per employee, monthly, depending on the requirements for each employee.

The flat rate pricing structure may be more expensive upfront but will cost you less in the future. Knowing this can open up more opportunities to budget your resources or invest in better projects for your business.

Employer Of Record Vs. PEO – What’s the difference?

Professional Employer Organization (PEO) is similar yet has differing functions when compared to an Employer of Record. PEOs and EORs handle employee management and administrative activities such as tax compliance, payroll, benefits, and HR. PEOs, however, do not have legal responsibilities for employment.

Since a PEO is a co-employment organization, you are only “leasing” their employees to work for your company. This means that when you want to hire internationally, you need to establish legal entities in your target countries, entailing more risk for costs and compliance.

With PEOs, you are provided the services for employment but not compliance. If you want a more thorough service without upfront costs, it’s best to choose Employer of Records solutions. If you have established entities in other countries and need assistance in the hiring process and employee management, then PEOs will work for you.


How to choose the right Employer of Record partner?

While there are many EOR service providers out there, finding the best one for you means asking the right questions while analyzing the providers’ reputation and compatibility with yours.

Ask the Right Questions

When choosing an Employer of Record solution, having a clear idea of your company’s recruitment, HR, or other administrative activities can help you understand what processes require solutions. Asking yourself the below questions can bring forward the specific EOR services you need to help bolster your company.

  • Do you need to hire internationally but don’t want to spend more resources on establishing entities in other countries?
  • Is your payroll team experienced enough to handle everything? Or do you need experts for legal compliance with your payroll processing?
  • Do you need the whole EOR service package, or do you just need to plug in the deficiencies in your payroll system?
  • Have you considered the long-term costs of partnering with Employer of Record instead of investing in your own company?

Answering these questions truthfully aids in evaluating priority solutions for your company. By focusing on the primary issues, you get to be more efficient with your resources. You lessen the costs of services when you fully understand your company’s needs.

Ultimately, you know your company the best and can accurately evaluate the requirements.  With a deep knowledge of your company, you can allot better investments and improvements, pushing your growth forward.

‍Do your due diligence

Make sure you do a thorough background check on the EORs you have your sights on. An EOR’s reputation determines the overall quality of the services they provide. Their branding cannot fully reflect how they service their clients. That’s why checking for reviews online, asking for client feedback, and assessing your interactions with them can lead you to form your decision to partner with them.

However, finding the right fit for your company requires a deeper analysis between your company and the EOR you’ll partner with. Company culture is a key component of compatibility. Your EOR can prove a perfect fit if you share the same values and culture with them.

Why choose Multiplier as your Employer of Record?

We, at Multiplier, provide Global Employer of Record services through our SaaS platform readily available for you. You can automate your payroll processing and employee management through our software. Rest assured that our user-friendly approach can help you implement our technology seamlessly in your business.

Offload international hiring complexities and risks through us as we operate in more than 150 countries. Focus on hiring the best overseas candidates for your role, and we’ll handle the rest. No need to set up legal entities in the countries you’ll hire.

Simplify everything with a click of a button. Simplify with Multiplier.

Ready to streamline your HR activities with a trusted EOR partner? Talk to the experts at Multiplier today!

Frequently Asked Questions on Employer of Record


It typically costs around $250 – $500 per employee, depending on the services and company you partner with.


All industries can use a local or global Employer of Record.


Yes, you can. However, when employing full-time international workers, you must establish legal entities in their countries.


Most EORs provide employee management, payroll processing, and other HR activities. They can help with international legal and tax compliances, provided they have entities operating in other countries.


Yes, EOR services can also be used to onboard and pay independent contractors. Remote EOR services especially help you hire independent contractors across the world.

Hiring and onboarding using Multiplier ensures you hire remote talent with locally compliant, fool-proof job contracts, offer emphatic benefits and disburse salaries accurately with absolutely nil errors in payrolls.

Hiring and onboarding using Multiplier ensures you hire remote talent with locally compliant, fool-proof job contracts, offer emphatic benefits and disburse salaries accurately with absolutely nil errors in payrolls.​