Employer of record: how a company abroad can hire you legally
A company in another country wants to hire you, but it has no office where you live. It has three ways to do it: hire you as a contractor, open its own company in your country, or use an employer of record. This guide explains each route from the worker's side: who signs your contract, who pays your taxes, and what you get.
Updated 8 October 2026. Written by the Big World Jobs team from the providers' own pages and from regulators, listed at the end.
In short
- An employer of record (EOR) is a company that legally employs you in your country on behalf of a foreign company. You get a local employment contract, payslips, social security and the benefits the law gives employees there. The foreign company directs your daily work.
- As a contractor you are self-employed: you invoice, you pay your own taxes and social contributions, and you get no statutory benefits. It is simpler to set up and riskier if the job is really an employee job.
- A PEO shares the employer role with a company that already has its own entity in the country. It is not a way to hire you where the company has no presence.
What an employer of record does
The EOR becomes your legal employer in your country. It signs the employment contract under local law, runs payroll, withholds income tax and social contributions, pays the employer's share, and provides the benefits that law or collective agreements require there: paid leave, sick pay, pension, notice and severance where they apply. The company you actually work for pays the EOR your salary, the employer costs and a monthly fee, and it decides what you work on, like any manager would. Vistra describes the EOR as the sole legal employer, while the client company keeps the day-to-day direction.
Deel lists what its own EOR service covers: contracts that follow minimum wage and termination rules, payroll on its own engine, statutory and optional benefits, paid time off, payslips you can download, expense claims, visa support and equipment (Deel, employer of record).
The four ways a foreign company can hire you
| Route | Who signs your contract | Your taxes | Benefits | Good to know |
|---|---|---|---|---|
| Employer of record | The EOR's local company | Withheld from your salary by the EOR | Statutory benefits of your country, plus any the employer adds | Costs the company a monthly fee per employee on top of your salary. You are a real employee with local rights. |
| Contractor | You, as a self-employed person or your own company | You declare and pay them yourself | None by law. You negotiate a rate that covers them. | Fast to start. The company carries the risk if your work is really employment. |
| Contractor of record | A provider that contracts you and invoices the company | You pay them yourself | None by law | The provider checks that the role can be contracting and takes over the misclassification risk. |
| Own local entity | The company's own branch in your country | Withheld by the employer | Statutory benefits | Only worth it for companies hiring many people in one country. Takes months to set up. |
EOR vs PEO: why the words get mixed up
A PEO (professional employer organisation) works in co-employment: the PEO and the client company are both employers, and the client must already have its own entity in the country. That is common in the United States for small firms that outsource HR and payroll. Co-employment is not allowed everywhere, and many providers that call themselves "international PEOs" are in fact employers of record (Vistra). For tax purposes in the US, the IRS treats a certified PEO as generally liable for federal employment taxes on its worksite employees' wages (IRS, third-party arrangements). For you as the worker abroad, the question that matters is simpler: which company is named as your employer on the contract, and under which country's law.
Contractor or employee: the test that decides
A contract that says "contractor" does not make you one. Tax authorities look at how the work really happens.
- United States. The IRS looks at behavioural control (does the company decide how, when and where you work?), financial control (who pays for tools, can you make a profit or a loss, do you have other clients?) and the type of relationship (benefits, permanence, whether your work is a core part of the business). No single factor decides. A worker who thinks they were misclassified can file Form 8919, and either side can ask the IRS for a ruling with Form SS-8 (IRS).
- United Kingdom. When you work through your own limited company, the off-payroll rules (IR35) apply. Medium and large clients must decide your status and give you a status determination statement. If the rules apply, the client or agency deducts income tax and National Insurance as if you were employed. HMRC's CEST tool helps with the decision (GOV.UK, IR35).
- Everywhere else. Most countries use similar tests. Fixed hours, the company's own tools, one client only and an open-ended core role all point to employment.
Contractor: what you gain
- Faster start, often within days
- Higher gross rate, if you negotiate it
- Freedom to work for several clients
Contractor: what you give up
- No paid leave, sick pay or pension by law
- You pay all taxes and contributions yourself
- Contract can usually end at short notice
What an EOR costs the employer
You do not pay the EOR. The company does, on top of your salary and the employer's social contributions. Published starting prices per employee per month, read on 8 October 2026:
| Provider | EOR from | Contractors | Coverage stated |
|---|---|---|---|
| Deel (partner) | USD 599 | USD 49 per contractor | Legal employment in 130+ countries, presence in 150+ |
| Remote | USD 699 | USD 29, or 99 for Plus | EOR without an entity in 90+ countries |
| Oyster | USD 699 | USD 29 after 30 free days | EOR in 120+ countries, contractors in 180+ |
| Rippling | Not published | Part of its HR platform | Not published on the EOR page |
| Multiplier | Not published on the page we could read | n/a | EOR in 150+ countries |
"From" prices. Annual billing, volume and country change the final price. Ask each provider for a quote.
Questions to ask before you sign
- Will I be an employee through an EOR, or a contractor? Ask which legal entity signs the contract and under which country's law.
- What is my gross salary, and roughly what will I take home? Under an EOR, taxes and contributions come off before you are paid. As a contractor, they come off after.
- Which benefits are included? Statutory ones, and any extra: private health insurance, a pension top-up, equipment, a home-office allowance.
- If I am a contractor, who carries the classification risk? A contractor-of-record arrangement moves it to the provider. Check whether you must register as self-employed or open a company where you live.
- In which currency am I paid, and how? A salary or invoice in dollars, euros or pounds loses money on the bank's exchange rate unless you choose the payout method well. See how to get paid from abroad.
- Will you sponsor a visa if I move? Some EORs, Deel among them, offer visa support.
Where Deel fits
Deel is one of the largest providers of both routes: EOR employment and contractor payments, plus a contractor-of-record service in which Deel signs the contract with you, checks that the role really qualifies as contracting and takes on the misclassification liability (Deel, contractor of record). If a company is weighing how to hire you, it is a fair name to put on the table, next to the others above. Our Deel review covers what it means for the worker: payouts, fees and complaints.
Partner link. Big World Jobs may be paid if you sign up. Nothing changes in the price.
Frequently asked questions
What is the purpose of an employer of record?
It lets a company employ someone in a country where it has no legal entity. The EOR signs a local employment contract, runs payroll, withholds taxes and provides statutory benefits, while the client company directs the work.
How does an EOR work for the employee?
You sign an employment contract with the EOR's local company, receive payslips and a salary in your currency, and get the benefits local law gives employees. Day to day, you work for and report to the foreign company.
What is the difference between a PEO and an EOR?
A PEO shares the employer role with a client that already has its own entity in the country. An EOR is the sole legal employer and is used where the client has no entity. Many providers called international PEOs are in fact EORs.
What is the difference between EOR and payroll?
A payroll provider only calculates and pays salaries for a company that is already the employer. An EOR becomes the employer itself: it holds the contract, the legal duties and the payroll.
Is it better to be an employee or an independent contractor?
As an employee through an EOR you get paid leave, social security and protection against dismissal, with taxes handled for you. As a contractor you usually get a higher gross rate and more freedom, but no statutory benefits, and you pay all taxes yourself. Compare the net amount and the benefits, not the headline number.
What is misclassification of employees?
It is treating someone as a contractor when the work is in fact employment, for example fixed hours, the company's tools and one ongoing core role. The employer can owe back taxes and penalties. In the US the IRS uses behavioural, financial and relationship tests; in the UK the IR35 rules apply.
How much do EOR services cost?
Published starting prices on 8 October 2026 were USD 599 per employee per month at Deel and USD 699 at Remote and Oyster. The employer pays this on top of salary and employer social contributions.
Can I work for a US company from another country?
Yes. The company can hire you as a contractor or through an employer of record in your country. A US company cannot simply put you on its US payroll if you live and work abroad, because your country's tax and labour law applies where you do the work.
Related guides
- Deel review: what it means when a company pays you through Deel
- How to get paid from abroad without losing money on the exchange
- Health insurance for digital nomads, expats and remote workers abroad
Looking for the job first?
Browse remote jobs, start from the country you can work in, or see handpicked roles that hire across borders.
Sources, read on 8 October 2026: Deel, employer of record; Deel, pricing; Deel, contractor of record; Vistra, EOR vs PEO; IRS, independent contractor or employee; IRS, third-party arrangement chart; GOV.UK, off-payroll working (IR35); Remote, pricing; Oyster, pricing; Rippling, EOR; Multiplier, EOR. Fees, prices and terms change: check the provider's current page before you sign up.