The EOR model: how it works, where it strains

The model, step by step

1. The entity layer. Somebody must hold a registered employer in the hire's country. Vendors either own that entity or contract a local partner that owns one. Owned entities give the vendor direct control; partner networks reach more countries faster. Vendors advertise which they use per country in their own guides, linked from the country pages here.
2. The employment layer. The entity signs a local employment contract with your hire, carries the statutory duties and administers benefits. This layer is where labour law risk lives, and it belongs to the vendor, which is what the fee buys.
3. The service layer. Platform, payroll runs, invoicing, support. This is what you actually touch day to day, and where vendors differentiate hardest.
4. The commercial layer. Fees are advertised per employee per month; the verified range in this index runs from the minimum to the maximum shown on the pricing index, with a median of {median}. Deposits, minimums and currency handling vary by vendor and are described on the pages every figure here links to.

Where the model strains

The model strains at scale in one country, where fees pass the cost of your own entity; in regulated roles the entity cannot legally perform; and in markets whose rules cap or restrict outsourced employment. It also strains when a partner-network vendor's local partner underperforms, which is why the owned-versus-partner question is worth asking per country rather than per vendor.

None of that is a reason to avoid the model. It is a reason to treat vendor claims as claims: this site quotes them verbatim, dates them, and links the page they came from, so the version of the model you are buying is the one the vendor actually printed.

Common questions

Does owned-entity mean better?

Not automatically. Owned entities concentrate control and accountability in the vendor; strong local partners can know their market better than a remote subsidiary. What matters is the specific country you are hiring in, which is why the coverage evidence on this site is per country.

Who carries the compliance risk in the eor model?

The vendor, as legal employer, carries employment-law compliance. You keep direction of the work and ordinary management duties. Contracts allocate edge cases differently, so the vendor's own terms are the document to read.

How do the vendors make money at these prices?

Volume and software. Payroll and contract generation automate well, entities amortise across many clients, and the advertised fee, median {median} across priced vendors here, is margin-positive once a country's fixed setup is absorbed.

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