Onboarding international employees is not a translated version of US onboarding; it is a different legal event in each country. The employment contract must satisfy local labor law, the employer must be registered with the country's tax and social insurance institutions before the first payday, and the familiar US artifacts (the I-9, the W-4, at-will offer letters) either do not apply or have local equivalents with different rules. Which entity carries these steps depends on structure: your own foreign entity, or an employer of record that employs the person through its local entity. This page lays out the sequence and the US tax rules that follow the hire, grounded in official sources.
The local employment contract comes first
In most hiring markets outside the US, a written employment contract meeting statutory minimums is the foundation of the relationship, and local law fills or overrides anything the contract leaves out or undercuts. Probation periods, notice, working time and leave are commonly fixed by statute or collective agreement rather than employer policy, and at-will language imported from a US template is void where it conflicts. The contract often must be in the local language to be enforceable against the employee, and some countries require specific clauses or formats. This is the step where an employer of record earns its fee: its local entity issues a compliant contract as the legal employer, while a company running its own entity needs local counsel or a strong template maintained per country. Either way, the document employees sign is the one local courts will read, so it is the wrong place to economize.
Registrations before the first payday
Payroll cannot lawfully run until the employer and often the employee are registered with the country's institutions. The shape repeats across markets even though the names differ. In Germany, contributions to the five social insurance branches are withheld through payroll and routed via the employee's health insurance fund, which distributes them to the pension, unemployment and care institutions, so the fund relationship must exist at onboarding. In Japan, JETRO's guidance for inbound employers lists four insurance systems to enroll employees in: workers' accident, employment, health with nursing care, and employees' pension. Right-to-work verification also follows the country of employment rather than any US process; the US Form I-9 regime governs employment in the United States, and hiring abroad instead means checking work authorization under local immigration law. A structured onboarding runs these registrations as a checklist with dates, because a first payslip issued before registration completes is a compliance failure in most systems.
The US tax rules that follow the hire
US companies onboarding abroad need to know which US obligations travel with the worker, and the IRS draws the line by the worker's status rather than the company's location. Wages a US person pays to a US citizen or resident for services performed outside the United States remain subject to US federal income tax withholding, with specific exceptions, including where the foreign country's law requires its own withholding or where the employee files Form 673 to claim the foreign earned income exclusion. By contrast, the IRS states that wages earned by nonresident aliens for services performed outside the United States are foreign source income and are not subject to US reporting and withholding. In practice this means onboarding a local national abroad creates local obligations only, while relocating or hiring a US citizen abroad creates parallel US and local obligations that need coordinating; that coordination, not the paperwork volume, is the genuinely hard part.
Who runs which step: entity vs EOR
With your own foreign entity, every step above is yours: the contract, the registrations, the payroll setup and the ongoing filings, usually with local advisors carrying the detail. With an employer of record, the provider's local entity is the legal employer, so it issues the contract, holds the registrations and runs payroll, while you handle the parts no vendor can: the offer, equipment, systems access, and the management relationship that makes the first weeks work. The practical checklist for a buyer is short. Confirm which entity employs the person and see the contract before it is sent. Ask for evidence of the social insurance and tax registrations behind the first payslip. Agree who tracks visa or work authorization status where it applies. Statutory rules and the contract control everything above, and nothing on this page is legal or tax advice; the sources below are the primary references.
Questions people ask about onboarding international employees
Do I complete a Form I-9 for an employee working abroad?
The I-9 regime applies to employment in the United States. An employee hired to work in another country is onboarded under that country's right-to-work and registration rules instead, checked by whichever entity is the legal employer there.
Does US tax withholding apply to a foreign employee abroad?
Per the IRS, wages earned by nonresident aliens for services performed outside the US are foreign source income and not subject to US withholding or reporting. A US citizen or resident working abroad, by contrast, generally remains within US withholding, subject to specific exceptions.
What must be in place before the first foreign payslip?
A locally compliant employment contract and the employer's registrations with the country's tax and social insurance institutions; in Germany the health insurance fund routes the five branches of contributions, and in Japan enrollment spans four insurance systems.
What does an EOR handle during onboarding, and what stays with me?
The EOR issues the local contract, holds the registrations and runs payroll as legal employer. The offer, equipment, systems access and management of the person stay with you; no vendor can onboard someone into your actual team.