Employer of record for independent contractors

Advertised prices, verified

How converting a contractor through an EOR works

1. Assess the relationships worth converting. The candidates are contractors who work substantially full time for you, under your direction, on your tools, over a long period, in countries where you have no entity. Those are exactly the fact patterns classification authorities test, and exactly what an EOR can regularize.
2. Build the employment package. The contractor's rate is restated as salary plus the statutory employer costs of their country: social contributions, mandatory benefits, paid leave and notice obligations. Expect the total employment cost to differ from the old invoice amount, and negotiate the package with that arithmetic visible to both sides.
3. The EOR issues a local contract and onboards. The provider's entity in the worker's country signs a compliant employment contract, registers the employee with the local authorities, and takes over payroll, withholding and benefits administration from the first cycle, replacing invoices with payslips.
4. Run, and revisit as the footprint changes. You direct the work as before; the EOR carries the legal employer duties and bills salary costs plus its fee. If headcount in one country grows, the standard exit is transferring the employees to your own new entity, a transition many vendors support explicitly.

Contractor, employee, or something managed in between

Three products serve a distributed workforce and they are priced very differently. Contractor management platforms administer genuine contractor relationships: contracts, invoices and payments for people who really are independent businesses. Agent of record services add a layer that takes on classification review and contracting in its own name. An employer of record replaces the contractor relationship with employment through its local entity, which is the only one of the three that resolves, rather than manages, a misclassified relationship.

The honest sequencing is classification first, product second. A genuinely independent specialist serving several clients does not need converting and forcing employment on them costs money for nothing. A de facto employee billing through an invoice needs conversion, and the cheap-looking alternative of leaving things as they are is a deferred liability: back taxes, contributions and penalties in most jurisdictions land on the engaging company, not the worker.

What conversion costs, and what it buys

The EOR's fee, verified per vendor in this index, sits on top of the statutory employment costs of the worker's country, which are the larger and less negotiable number: employer social contributions, mandatory benefits, paid leave, notice and severance frameworks. Budget from the country's employer cost stack, then add the fee; a quote that shows only the fee is showing the small half.

What the spend buys is the end of the classification question for that person: a registered local employer, withheld and remitted taxes, statutory benefits actually provided, and an employment relationship that survives an audit. It also buys the worker things an invoice never carried, which is why many conversions are welcomed rather than resisted. The specifics live in the EOR's contract and the country's law; policy and contract documents control, and nothing here is legal or tax advice.

Common questions

Can an EOR keep someone as an independent contractor?

No. An employer of record employs people; that is the product. For genuine contractor relationships, vendors sell contractor management or agent of record services instead, usually at much lower per-person prices.

When should a contractor be converted to an employee?

When the working reality looks like employment: substantially full-time work for one company, under its direction, over a long period. Local law defines the exact tests, and the engaging company usually carries the misclassification risk.

Does conversion cost more than the contractor invoice?

Usually the total cost changes, because employment adds statutory contributions and benefits on top of net pay plus the EOR fee. Model the full employer cost stack for the country before agreeing the new package.

What happens if we later open our own entity?

Employees employed by the EOR can be transferred to your new entity; many vendors support that transition explicitly, and it is the normal path once headcount in one country justifies incorporation.

Coverage by country

• Employer of record vendors covering Singapore
• Employer of record vendors covering Mexico
• Employer of record vendors covering Spain
• Employer of record vendors covering Colombia
• Employer of record vendors covering United Kingdom
• Employer of record vendors covering France
• Employer of record vendors covering Hungary
• Employer of record vendors covering New Zealand