What does an employer of record (EOR) do?

Article author
Nneka
  • Updated

An employer of record (EOR) makes it possible to hire talent in a country where your company doesn't have an entity set up. The process of setting up an entity can be time-consuming and expensive. An EOR like Remote takes away this burden by hiring employees on your behalf. 

What does an EOR handle?

At Remote we compliantly handle: 

  • Employee onboarding
  • Payroll and time off
  • Local employment taxes
  • Statutory and supplementary benefits
  • Contract management (employment letters, country transfer, and termination)

Is an EOR the same thing as a PEO or Global payroll?

No, it is not. There are several differences between an EOR, PEO, and Global payroll. While with an EOR, you do not need to own your own entity, with a PEO or Global Payroll you have to own your entity. 

See also: Does your business need an EOR or a PEO?

Professional Employment Organization (PEO): This is a service more common in the United States where the company and PEO "co-employ" the employee. Working with a PEO involves sharing the legal liabilities and outsourcing certain aspects of the HR function to them. 

Global Payroll: This does not involve any co-employment and requires that the company have its own entity set up. The function of a Global Payroll is to be an outsourced payroll provider.

 

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