What is an Employer of Record (EOR)?

An Employer of Record (EOR), also known as a Professional Employer Organization (PEO), is a company that helps its client companies to hire globally by providing all of the necessary back-office management for a foreign individual’s employment (such as employment contracts, payroll, tax, benefits management, and compliance). This enables client companies to hire an international team without having to set up subsidiaries, branch offices, or other complex legal entities abroad, saving those companies between $25,000-80,000 on average.  

While the EOR is formally the entity employing the individual and overseeing all required HR functions, the client company retains the autonomy to manage employees and their day-to-day workloads. In this sense, there is no loss of direction over employees by hiring through an EOR. 

The core benefit of using an EOR is that the client company gets full control over an international workforce while avoiding all of the global HR and payroll responsibilities of an employer. 

Typically, an EOR will be responsible for: