EOR cost, broken down by pricing model

Advertised prices, verified

How to work out what an EOR will actually cost you

1. Identify the pricing model the vendor uses. Most vendors in this index charge a flat fee per employee per month, which is predictable regardless of the employee's salary; a smaller number charge a percentage of salary instead, which scales with a senior hire's pay and can end up costing more than the flat-fee alternative for higher earners. Check which model the vendor's own pricing page actually uses before comparing figures across vendors.
2. Add what the advertised figure leaves out. The number on the pricing page is usually a starting price for the base product, and currency conversion margins, a refundable deposit held against termination costs, and benefits administration fees can all sit outside it depending on the vendor. Read the vendor's own page for what it explicitly excludes rather than assuming the advertised figure is the whole invoice.
3. Weigh EOR cost against the PEO cost alternative where both apply. A PEO is only an option if you already have a legal entity in the country, usually the United States, so a PEO cost comparison only makes sense there; everywhere else, the EOR fee is being compared against the cost of incorporating and running your own entity, not against a PEO. Several vendors in this index publish both figures, which makes the comparison easy to check directly on their own pages.
4. Factor in what statutory costs add on top. Whatever the vendor's advertised fee comes to, the employee's salary plus the country's statutory employer contributions, social security, payroll tax, mandatory insurance, arrive on top of it and are usually the larger part of the total invoice. Budgeting from the fee alone understates what a hire actually costs by a wide margin in high-contribution countries.

EOR pricing models: flat fee or percentage of salary

Employer of record pricing comes in two main models. The more common one in this index is a flat fee per employee per month, the same figure whether the hire earns a modest salary or a senior one, which makes the cost predictable and easy to compare across vendors. The second model is a percentage of the employee's gross salary, which can look cheap for a junior hire and become the more expensive option as pay rises, because the fee grows with every raise.

Some vendors also price per entity or per country on top of the per-employee figure, or offer a lower rate on annual billing. Whichever model a vendor uses, read its own pricing page for what the figure covers and what it leaves out, because two vendors on the same model can still be bundling very different amounts of work into the same headline number.

What drives EOR fees up or down

Country matters more than most buyers expect: a vendor's advertised starting price is usually a single global figure, but the real cost to serve an employee in a country with complex statutory requirements, mandatory benefits or a smaller local partner network tends to run higher than the headline number once the vendor prices the actual work. Headcount also matters, since most vendors offer lower effective rates at volume even where the published price is flat, and annual billing versus monthly billing is another lever several vendors in this index advertise a discount for on their own pricing pages.

The other driver is what the fee is meant to cover. A vendor whose advertised figure includes benefits administration and local HR support is doing more for the same headline price than one whose figure is bare payroll and contract issuance, so a lower advertised EOR cost is not automatically the cheaper real outcome once you account for what you would otherwise have to buy separately.

Common questions

How much does an EOR cost per employee?

The vendors in this index that publish a price advertise figures across a real range shown in the table above, most commonly a flat monthly fee per employee. That range covers starting prices for the base product; deposits, currency handling and benefits administration can add to what actually lands on the invoice, so read the vendor's own page for what its figure includes.

What does EOR pricing look like in the United States?

For a US hire the vendor's EOR fee is quoted the same way as anywhere else, usually a flat monthly fee per employee shown in the table above. The difference in the United States is that a company with its own US entity can use a PEO instead, which co-employs staff it already employs, so a US buyer should compare the EOR fee against PEO pricing as well as against running payroll in house.

Is EOR cost higher than PEO cost?

They are not directly comparable products, since a PEO only works where you already have a legal entity, but where a vendor publishes both, its EOR figure is typically the higher one because the vendor is also carrying the legal employer role rather than only co-employing staff you already employ.

Does EOR cost include statutory employer contributions?

No. The advertised fee is the vendor's service charge; the employee's salary and that country's statutory employer costs, social security, payroll tax and mandatory benefits, are separate and usually make up the larger part of what a hire actually costs. Budget from total employment cost, not the fee alone.

How do I calculate the total cost of a global EOR hire?

Add three things: the vendor's monthly fee for that country, the employee's gross salary, and the country's statutory employer contributions such as social security, payroll tax and mandatory insurance. Then add anything the vendor charges outside its advertised fee, such as a refundable deposit, currency conversion or benefits administration. The fee is usually the smallest of the three parts, so a total built from the fee alone will understate the real cost.

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