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Employer of Record
Attract and retain talent across the globe with our expert resources and tips on using Employer Of Record services.
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Welcome to the Playroll blog
Attract and retain talent across the globe with our expert resources and tips on using Employer Of Record services.
An Employer Of Record (EOR) is a third-party service that handles employment responsibilities for your company, like payroll, taxes, benefits, and compliance with local labor laws. The EOR legally employs your global team on paper, while you manage the employee's daily activities.
EOR providers typically operate under these business models: using their own wholly-owned local entities, partnerships with local providers, or a combination of these two approaches. A wholly-owned EOR model means the provider sets up its own entities in each country and retains full control over hiring and payroll.
In contrast, some EORs partner with local vendors and outsource these tasks. While this can be cheaper for the EOR, it may lead to less reliable service for you. Wholly-owned entities has the following advantages:
Selecting an EOR partner with a robust network of wholly owned entities can give you advantages in all these areas.
It's important to find an EOR with transparent pricing. Some providers may have hidden fees, like onboarding and offboarding charges, which can increase costs unexpectedly. Look for an EOR that clearly communicates all potential expenses upfront, is straightforward in their invoicing, cost effective and offers a clear breakdown of what’s included in their pricing.
Lastly, they should offer flexibility in their pricing models that suits the needs of your business: this includes offering monthly charges for full-time employees over requiring annual commitments for lower rates.
The level of support an EOR provides can make or break your global employment strategy. Quick response times and hands-on support are essential, especially when dealing with complex issues like payroll queries or legal compliance in jurisdictions you might be unfamiliar with.
Before bringing an EOR provider on board, check their public reviews on platforms like G2 and Trustpilot. Additionally, ensure that the EOR offers dedicated support for your employees to ensure employee satisfaction and retention. Be sure to ask if dedicated support comes free of charge, as some EOR providers charge extra for this service.
Your EOR provider should have a strong presence in the countries where you wish to expand in the short-term and in the long run. In cases where they do not operate in your desired country, your growth might be hampered if you're locked into a contract you’re unhappy with. Some providers also charge fixed offboarding fees – it’s a good idea to ask whether this is the case before you commit to a provider.
Identify a company with comprehensive country coverage. For example, Playroll operates in over 180+ regions and offers the extensive coverage required to support your global ambitions.
An ideal EOR should help you hire both full-time employees and contractors legally. This flexibility is essential as your workforce needs may evolve over time. It’s much easier to use one service provider that can cater for all potential needs, than having to choose different providers to hire full-time employees and contractors.
Additionally, the EOR provider should be able to assist with classifying your workers correctly to avoid the penalties associated with misclassifying employees as contractors, and convert contractors to full-time employees if needed.
Check that your chosen EOR provider will support hiring different types of workers, in all the regions you’re interested in.
Competitive employee benefits are a key component of attracting and retaining top talent. Your EOR should offer a comprehensive benefits package that includes both local benefits and global options.
Enquire about additional services like benefits management and visa support. The more robust and flexible the benefits, the better equipped you’ll be to support your international team no matter any curveballs that might come your way.
Timely and accurate payroll is a non-negotiable part of your day-to-day operations when managing a global workforce. Having delayed and faulty payroll can result in great reputational harm to your business and potential legal fallout. Ensure the EOR has a proven track record of paying employees on time and offers a user-friendly payroll system.
Before committing, ask for a demonstration of how their payroll system works and whether it provides a clear view of all transactions in one place. Ask how their invoicing system works, as some providers can make this needlessly complex.
Your data should always be safe, and data security is an important consideration while choosing an EOR. Ensure this by checking the certifications the EOR holds, such as GDPR and SOC2, and inquire about the measures they take to protect your Intellectual Property. An EOR provider should guarantee that all contracts are compliantly set up to ensure your IP will belong to you.
Be wary of EORs that rely heavily on third-party partners since this can increase the risk of data security issues.
Compliance with local labor laws is one of the main reasons to partner with an EOR. The right EOR should have a team of experts on hand to help you navigate challenges such as employee misclassification risk, and meeting all compliance requirements in new markets. Again, be sure to check if the EOR provider has a track record of quick response times, as you might need fast support when it comes to questions of compliance.
Ask about their legal expertise in the specific countries you’re interested in and how they help you stay compliant with local regulations.
Employment contracts can vary across different regions and your EOR should be flexible to your specific needs and can create customized agreements if needed. Ask about their process for amending contracts and how long it typically takes.
Flexibility in this area ensures your contracts are aligned with both local laws and your business objectives.
Employee terminations can be difficult and complicated, making it a matter that should be handled carefully. Ensure the EOR has a clear and compliant process for managing terminations, including support for both the employer and the employee during the offboarding process. Understand this process thoroughly before entering into a partnership to prevent legal issues in the future.
If you're considering moving an employee from an EOR to one of your own entities, many EOR providers require a ‘resign and rehire’ process. During this process, the employee resigns from the EOR and is rehired by your entity. This approach can complicate the businesses’ relationship with the employee.
Clarify with the EOR if they offer a flexible transfer process.
Choosing the right EOR partner is fundamental for your business’s global expansion. Playroll stands out by meeting the criteria mentioned above, offering extensive country coverage at 180+ regions with a robust network of wholly owned entities.
Enjoy transparent, best-in-class pricing, dedicated support for employees and employees, and a flexible approach to employment contracts – with a team of HR, finance and legal experts on hand every step of the way.
Compare EOR providers and book a demo with Playroll today to explore how we can support your international growth.
Read Time
August 28, 2024
There are many EOR providers on the market – and your choice will be pivotal to the success of your business and ability to scale globally. Here’s your detailed guide on assessing EOR providers in 2024.
Establishing a foreign subsidiary is the traditional route to expanding globally as a business. While it’s one way to grow as a company and establish your reputation as a global employer, the process can be lengthy, complicated and requires significant resources as a business.
This article will deep-dive into the pros and cons of establishing a foreign subsidiary and the steps involved in setting one up. Plus, we outline alternatives that can save significant time and cost when expanding into new markets.
A foreign subsidiary is a separate legal entity established by a parent company in another country. It operates independently but remains under the control of the parent company. Establishing such a subsidiary allows businesses to access new markets, mitigate risks, and optimize tax benefits.
Companies often choose between wholly owned subsidiaries, where they hold 100% control, partially owned subsidiaries, shared with local partners, or joint ventures formed in collaboration with other entities.
Companies typically establish foreign subsidiaries to access new markets, mitigate their risks and optimize tax benefits.
Types of Subsidiaries:
A foreign branch is not a separate legal entity and the parent company bears full liability for its operations. In contrast, a foreign subsidiary is a distinct legal entity, providing better legal protection and compliance independence. Understanding these differences is crucial for businesses to make informed decisions about their global expansion strategy.
Creating a foreign subsidiary can open up your business to permanent establishment (PE) risk, which subjects the parent company to local taxation and regulatory requirements. This risk underscores the importance of thorough research and compliance with local laws to avoid unexpected liabilities.
Establishing a foreign subsidiary involves high initial setup costs, ongoing operational expenses, and extensive research to ensure compliance with local regulations. The time-consuming nature of these tasks can strain resources and delay market entry.
Cultural differences may also pose integration challenges, impacting organizational cohesion. Additionally, closing down a foreign subsidiary can be a complicated and costly process, requiring careful consideration and planning.
Despite the challenges, establishing a foreign subsidiary offer benefits too. They provide access to new markets, enabling businesses to expand their global presence and reach new customers. Subsidiaries can also offer tax benefits, taking advantage of favorable local tax regimes.
By operating as a separate legal entity, a subsidiary reduces the parent company's legal risks. This structure allows for better division of labor and resource allocation, enhancing operational efficiency. Moreover, having a local subsidiary builds trust and credibility with customers in the new market, fostering brand loyalty.
Often, it makes sense to open a foreign subsidiary if you're planning to hire many new employees in a new market, to justify the investment in time and cost.
To establish a foreign subsidiary, businesses must conduct preliminary research into the target market to understand local employment practices and compliance requirements. Forming an expansion team and planning the hiring strategy for the new market is essential. Ensuring compliance with local labor laws will usually involve consulting with your own appointed team of legal, financial, and tax experts.
Deciding on the appropriate entity structure, such as an LLC or corporation, is a critical step. Securing funding for both setup and operational costs is necessary, along with appointing a board of directors and management team.
Gathering all necessary documentation, including business plans and legal agreements, and registering with local authorities are vital steps in the process. Finally, setting up operations involves hiring employees, establishing offices and infrastructure, and developing local partnerships.
For businesses seeking a less complex and cost-effective approach to hiring internationally, there are two alternative solutions:
Employing contractors allows businesses to manage overseas operations without establishing a legal entity, though it’s only suitable if you’re looking for support with short-term projects. Treating contractors the same as a full-time employee carries misclassification risks.
An Employer Of Record is a third party service that assumes all employer responsibilities on your behalf in new regions, handling payroll, taxes, and compliance with local employment laws.
It offers a route to quick market entry and vastly reduces the financial and administrative burden for businesses, offering an alternative to the traditional method of establishing legal entities.
Companies often use Employer Of Record services for the following reasons:
Playroll's EOR services can be a strategic solution for businesses looking to expand globally without worrying about the complexities of setting up a foreign subsidiary.
Playroll has a global footprint in 180+ regions, and teams of experts on hand to help navigate international hiring and ensure you stay fully compliant – with direct support for employers and employees, every step of the way. Hire, pay and manage a global workforce, all in one platform.
Speak to our experts to find out how Playroll can help you scale your global workforce.
Read Time
August 15, 2024
By 2026, the HR outsourcing market is expected to grow by US$10.90 billion. As businesses navigate the hiring landscape, HR outsourcing firms like Professional Employer Organizations (PEOs) have emerged as allies to support optimizing and improving day to day operations.
And then there are Employers of Record (EOR), which serve as a comprehensive service for companies aiming to expand internationally. Let’s brush over the definitions:
What is it? A PEO acts as an outsourced HR partner
Who is it for? Businesses without formalized inhouse HR functions
How does it work? By forming a co-employment agreement, PEOs work closely with companies to manage a variety of HR-related functions.
What does it handle? Payroll and payroll tax management, benefits administration, HR compliance, risk management and employee relations.
By partnering with a PEO, businesses can focus on their core operations without the worry of managing the more intricate aspects of HR.
What is it? The Employment of Record (EOR) model managing companies through established international entities
Who is it for? Global employers looking to outsource the employment of its staff overseas,.
How does it work? By providing its own legal entities to employ staff internationally.
What does it handle? The maintenance of normal working relationships with employees across borders through HR tech, visa support, benefits management, etc.
While the concepts "PEO," "employee leasing," and "HR outsourcing" can be easily confused, there are differences that exist between them. Here’s what you need to know:
A PEO shares employer responsibilities with a client company though a co-employment relationship. The organization is directly responsible for managing HR functions and compliance on behalf of the client company
Also referred to as "staff leasing", employee leasing typically involves providing workers to a client company for a contractually agreed upon fee. The client company maintains control over day-to-day employee relations.
HR outsourcing involves contracting specific HR functions out to external HR service providers, without forming a shared co-employment. Specific HR-related functions are subcontracted to specialized HR firms on an ad-hoc basis.
Still weighing your options? Let’s break down the pros and cons of choosing one over the other.
EORs might involve higher costs and offer limited control over HR functions, as well as less direct employee engagement. But PEOs can introduce complexities in shared control and HR policy conflicts.
However, overall both models provide robust solutions but cater to distinctly different business needs.
Playroll is an employer of record service that assumes full responsibility for local labor laws and regulations around global hiring.
Importantly, with Playroll EOR, the client company maintains control over the employees' daily tasks and duties, unlike in a typical PEO arrangement where some operational controls are shared.
The burgeoning interest in PEO and EOR services, particularly in the US, parallels the increasing foreign direct investment, highlighting the EOR's vital role in facilitating international business expansion without the administrative burdens typically associated with entering new markets.
As businesses look towards sustainable growth, EORs allow companies to maintain a competitive edge in international markets, ensuring they remain agile and compliant amid shifting economic and political climates.
Ultimately, the choice between EOR and PEO hinges on a business’s specific needs, but the rise of the EOR model points to a shift towards global employment solutions that prioritize efficiency, compliance, and strategic international presence.
Start your global hiring journey today from $399 per employee.
Your business is growing—you’re breaking the mold, and now you’re ready to enter new, international markets.
But, becoming a global business isn’t easy. You have big decisions to make and new compliance concerns to manage, all while keeping up with your current operations. On your journey to the world stage, you might need some help from an employer of record service.
Here we explore seven benefits of seeking expert help from an international employer of record to help you make the best decisions for the future of your business.
Also read our breakdown of employer of record services: What Is an EOR and Why Should You Have One?
Employers of record cover a lot of ground—their expertise and tools can help you navigate the international market, streamline your HR operations and plan for future growth.
Let’s explore the benefits of using such an employment service to support your growing, global business:
When you expand into a new country, you’ll likely need to hire additional, local help to work in brick-and-mortar facilities, complete the services your business offers, provide customer support and more.
With help from a global employer of record, you can seamlessly add new staff to your team to quickly and efficiently onboard them into your workforce. How? By letting them act as your legal entity.
In most cases, a business that legally employs abroad must establish their local entities within the borders of their employees’ home countries in order to remain in compliance with local laws. But, when you use an employer of record, you can skip that step. EORs act as the legal employer as worldwide entities, exempting their clients from having to.
You can instead begin your talent search and hire new staff without waiting for local governments to approve your legal entity applications!
When you expand to even just one more country, you suddenly double your compliance workload—unless you partner with an international employer of record, also referred to as globalization partners.
EORs support compliance monitoring so you don’t need to be an expert on international labor laws, minimum employee benefits or business regulations to run a worldwide business. Their expert teams ensure that your business is always operating above board, even if you’re not familiar with laws in your new markets.
Employers of record are also international HR compliance experts legally responsible for keeping up with changing laws, research regulations abroad and complete mandatory reporting benchmarks related to labor and legal establishment. This saves you the energy of researching the labor and benefits laws in your new employees’ homelands, leaving that burden to the professionals while you build new teams.
Remove the pressure of required compliance with local employment laws, such as:
Running a business is time-consuming—especially when you need that bandwidth to focus on innovation, operations, and international growth. Key stakeholders like presidents, owners and CEOs have enough on their plates; employers of record can help reduce their workload by automating and streamlining HR and tax-related tasks.
Take Tax filing and payments as an example—EORs file and pay taxes domestically and abroad as a part of their payroll management system. Importantly, they assume any liability for filing and payment mistakes, taking the risk off of your shoulders.
If an operational measure can save key stakeholders time, it can certainly do the same for other employees. When employees have fewer banal tasks on their plate, they can dedicate their time to innovation, brainstorming and project work.
Finally, EORs can also save time by providing simple, structured and paperless onboarding and HR data collection. As the old adage goes, “Time is money”!
Reducing HR workloads not only saves on overhead costs but also allows employees to focus on profit-generating activities such as service delivery, product development, and client communication.
Take benefits administration, for example. By partnering with an employer of record, firms gain access to an extensive international benefits network. This can secure advantageous group-rate prices, thereby optimizing staffing expenditures.
Employers of record can also help with financial planning: estimating costs, creating short- and long-term plans, and budgeting for future staffing investments. They keep you from hiring staff you can’t afford, and optimize the profits available for HR investments.
Finally, EORs help eliminate routine tasks such as payroll management, compliance research, and other internal duties that represent a significant overhead.
Streamlined by an employer of record, employees can allocate their time more effectively to devise new efficiency strategies to cut costs further and drive growth in new international markets
When it comes to operating a business, implementing reliable global payroll processes is vital to employee morale and your reputation as a business leader. Slipping can decrease employees’ trust in company leadership, or even motivate employees to look for work elsewhere. In addition, late payments without cause or prior warning—in some cases—are against the law.
By providing payroll management services, employers of record ensure that your company is always up-to-date on payroll tasks and tax functions. And, arguably most importantly, employers of record can complete these tasks without regular input from in-house HR or finance staff once employee onboarding is complete.
Business owners can then stay on top of:
Your business probably started small, and there are certainly benefits to maintaining a lean staff. Has that changed, and do you want to do something about it?
Entrusting an employer of record with your HR procedures, regulatory tasks and tax-related obligations can prevent overstaffing: instead of hiring a team of employees to handle each of the three, you can assign them all to one entity.
In addition, consider employers of records’ roles in international growth. Establishing a legal entity in a foreign country requires manpower—but, if you partner with an employer of record, you can bypass this step and reduce your staffing needs. Get yourself back on track with smaller communication chains and lower management workload!
Technology changes quickly—investing in software to improve your operational efficiency always comes with a risk of future obsolescence and, thus, reduced ROI.
But, employers of record develop their own platforms instead of relying upon third-party software providers to maintain their tech. Partnering with them gives you access to automated payroll services; EORs handle payroll solutions for growing companies looking to automate global HR processes. They calculate wages, deductions, and benefits, and deliver international contractor or employee paychecks via direct deposit in a completely paperless, streamlined process.
Usually, an EOR’s proprietary platform or software are their major selling point—so they are always working on improvements behind the scenes. Employers of record also invest in their staff, who are trained to become experts in their own software and provide high-quality tech services.
Finally, employers of record control the data that they use—instead of risking a security breach with additional third-party software, they keep your confidential company information self-contained. Get the best of both worlds: cutting-edge tech and seasoned professionals who know how to use it.
Also Read: Know the difference between an employer of record and a professional employer organization or PEO
For more than two decades, Payroll’s teams of HR and compliance experts have been helping worldwide businesses spread their wings, enter new markets, and generate profit.
Plus, our all-in-one, user-friendly platform can help you monitor compliance efforts, plan future staffing investments, efficiently onboard employees and so much more.
You’re ready to go worldwide, and Playroll is ready to help. Book a demo.
With the Employer of Record market growing at a 6.8% CAGR, reaching USD 6604.4 million by 2029, the trend leans towards EOR companies for quicker, compliant market entry. Firms continue to evaluate EORs' speed against the solid ground of legal entities.
The dilemma is clear: Should you get EOR services or establish your own entity abroad?
Let's dive into what EOR services and legal entities entail, and how they each play a role in supporting companies' global ambitions.
An Employer of Record (EOR) simplifies the process of hiring overseas by acting as the legal employer for your staff abroad. This arrangement covers all compliance, payroll, and HR tasks in line with local laws. It's an ideal solution for businesses looking to expand internationally without the hassle of creating their own legal entity in each country of operation.
Essentially, EORs offer a direct route to global talent, legally employ workers on behalf of companies, and meet local employment standards.
On the other hand, forming a legal entity such as a limited liability company (LLC), general partnerships, or limited liability partnerships represents a different strategy. This is the option for establishing a more permanent foothold in a new market.
The own entity route allows businesses control over their foreign operations and workforce, but requires navigating the complexities of local legal, tax, and employment landscapes.
Setting up an LLC or PEO (Professional Employer Organization) provides substantial long-term advantages and demonstrates a solid commitment to the local market. However, it demands considerable resources, time, and legal expertise to implement and sustain.
Each pathway offers distinct benefits and challenges – let’s unpack them together.
Choosing between leveraging an EOR for expedient market access and establishing a company for deeper market integration depends on a company's objectives, resource availability, and risk tolerance.
Here's a straightforward comparison between EOR services and creating a legal entity for global business expansion.
Navigating global HR solutions means choosing between Employer of Record (EOR) services, a Professional Employer Organization (PEO), or setting up your own legal entity. The differences may seem subtle but are critical.
An EOR handles the legal and administrative duties of employing staff abroad, making it a cost-effective solution for companies that want to hire internationally without setting up local entities. The EOR becomes the local employer, taking on responsibilities such as payroll, taxes, and compliance.
A PEO, on the other hand, offers a broader suite of HR services, including recruitment, training, and employee benefits administration, through a co-employment model. This means your company shares employer responsibilities with the PEO, retaining some legal and compliance obligations. PEOs are ideal for domestic market-focused businesses looking to streamline HR functions and enhance support without relinquishing complete control.
Setting up your own legal entity involves establishing a local company in each country where you hire employees without involving an EOR or PEO. This route gives you full control over HR processes and compliance, but comes with significant costs and administrative burdens. Unlike EOR services, which handle local employment laws for you, or PEOs that share responsibilities, having your own entity means shouldering all legal, tax, and operational requirements independently.
Also Read: Employer of Record vs. PEO: What's the Difference?
Switching between employer of record companies and setting up your own legal entity, or vice versa, hinges on your goals. If cost savings, compliance simplicity, and operational flexibility are your priorities, work with an employer of record EOR services.
Conversely, setting up your own entity grants you full control over your operations but at a steeper cost. You assume all legal and compliance responsibilities, which can be resource-intensive. For businesses aiming to solidify their presence in a specific market with extensive resources, this approach can be beneficial.
Working with the best EORs means you tap into a streamlined global HR ecosystem. EOR services handle local labor laws, reducing your administrative burden. This allows you to hire global workforces without the need to establish a local entity, thus slashing overhead costs. EOR allows you to hire swiftly and scale operations, ideal for dynamic markets.
Staffing agencies differ from EORs, PEOs, and setting up your own entities primarily in their scope and function. While staffing agencies focus on recruiting and placing temporary or permanent employees, they do not handle payroll, compliance, or benefits administration.
Unlike EORs, staffing agencies leave the client company as the legal employer. This means the client remains responsible for compliance with local labor laws and other employer obligations, whereas EORs and PEOs manage these aspects on behalf of the company.
In this complex landscape, Playroll emerges not just as a provider but as a navigator, offering clarity and direction in choosing the best employer of record to simplify market entry. Ready to streamline your global expansion? Request a Playroll demo today.
An Employer Of Record (EOR) is a third-party service that assumes all employer responsibilities on behalf of another business, including payroll and benefits management for employees. EOR services are widely used by companies that are hiring employees internationally, without the hassle, time and cost of establishing a legal entity first.
The EOR acts as the legal employer paper, while you manage the employee's daily activities.
Yes, we admit our bias, but can point to a proven track record of success when it comes to compliantly employing, managing and paying remote teams for businesses of any shape and size.
Playroll simplified our expansion into new markets by providing a comprehensive understanding of local regulations. Through this partnership, we could immediately tick the box on compliance, at no risk to BET Software.
Gizelle Govender, Senior People Partner, BET Software
As a global Employer Of Record, Playroll stands out for its cost effective pricing, without compromising on the quality of its EOR services or support. It offers truly human customer support for both employers and employees to simplify international employment. This is in contrast to many competitors that rely on ticketing systems, do not offer dedicated support, or upcharge for support. We are uncommonly flexible when it comes to the needs of our customers, going the extra mile to customize contracts and facilitating transfers between EOR and client entities as needed.
Playroll’s user-friendly platform allows you to employ, pay and manage employees and contractors alike in 180+ countries, and provides a team of experts that ensures compliance with shifting employment regulations. Other services include comprehensive localized benefits packages, immigration support, and streamlining global payroll operations.
Pricing: From $399 per month, per employee. No annual commitment required for affordable prices.
Papaya Global is especially known for its comprehensive support in payroll processing, and is innovative when it comes to integrating AI within HR tech. They have a broad range of customization options available to customers.
On the downside, Papaya Global relies fully on third party partners to provide their services, instead of having its own infrastructure of owned entities. This can mean extra fees being passed on to customers, on top of already hefty monthly EOR fees. It also means the EOR provider always has to liaise with third-party partners when providing customer support, which can significantly delay their response times.
Pricing: From $599/month, per employee.
G-P is a popular EOR choice that offers a broad range of products. They split their EOR services between a core and premium offering. This can be useful for businesses that are looking for a broad range of options to pick and choose from. They also have many options to tweak and customize services, and advanced data analytics.
Globalization Partners does have its cons. Their pricing is complex and obscure, with reports of high monthly fees. Many of their EOR features are only available with their premium product, and they’ve received some negative feedback for slow customer service. Overall, this could make them a poor fit for smaller companies that have more limited resources and require more hands-on support to make their first international hires.
Pricing: Not publicly disclosed.
OysterHR is known for their fun branding and user-friendly platform, with quick onboarding times reported. They have a wide country coverage, and solid compliance credentials behind their name.
On the other hand, they are priced at the upper end of the market for their EOR services, which can quickly prove to be a financial bottleneck for companies hoping to hire more than just a handful of international employees. In addition, there have been some reports of payroll mistakes and delays on public review sites.
Pricing: From $599/month, per employee if paying annually. Monthly plans are priced from $699 p/month.
Remote is a well-known EOR provider, with a focus on providing services through their own network of owned entities, which can be useful for businesses that want to avoid dealing with any additional third parties in the equation.
On the downside, their EOR fees are very high compared to some other names in the business, and they have received some negative reviews on slow customer service and multiple points of contact. They also don’t offer a very wide network of country coverage for EOR services, with less than 100 countries covered, which can limit your ability to scale as a business.
Pricing: From $599/month, per employee.
Deel is another well-established player in the EOR space, offering options to manage full-time employees and contractors in 150+ regions. They can be a good fit for businesses looking for an EOR partner with many owned entities, and a comprehensive range of integrations.
That said, Deel’s fees are expensive and require annual commitments for cheaper pricing, and they’ve received many negative reviews of hidden fees and unexpected costs. This can make it hard to properly budget for their services, and can prove too expensive for smaller businesses looking to scale globally.
Pricing: From $499/month, per employee if paying annually. Monthly plans are pricier, at $599 p/month.
Rippling is a popular workforce management solution, and is especially known for their broad range of products that include payroll, finance and IT management. This can make them a good choice for companies looking for a single solution to workforce management.
If you’re looking for a specialist in global employment and EOR services though, there are some cons to consider. Their pricing is not publicly disclosed, though high fees are reported – and they’ve received negative reviews of a bloated product with a steep learning curve, as well as payroll errors.
Pricing: Not publicly disclosed.
Velocity Global stands out for its wide country coverage as an EOR provider, at 185+ regions, which can make them a good choice for employers interested in stable support for any future growth plans.
They are another example of an EOR provider that doesn’t disclose their pricing publicly, with reports of steep monthly fees. Another downside is the many negative reviews they’ve received for slow customer service and multiple points of contact, which can make them a frustrating provider to deal with if you value quick response times to enquiries.
Pricing: Not publicly disclosed.
Multiplier offers good pricing for the EOR services, and has a solid library of extra global hiring resources available for employers. They also have all compliance credentials needed to mitigate risk for employers looking to hire internationally.
On the other hand, they take a complex approach to invoicing, and have received some reviews of slow and faulty payroll services. They’ve also received negative feedback on slow customer service. Overall, this can mean risk to your business if you value simple, timely payroll for employees.
Pricing: From $400/month, per employee.
WorkMotion is an EOR service that specializes in supporting European companies, and can also assist with in-country registrations – which can make them a good choice for EU companies looking to expand their business.
As for its cons, WorkMotion charges very high EOR fees that only become more affordable when hiring many employees. They also don’t offer any support in hiring independent contractors, which can be detrimental to businesses that are looking for a single service to hire any type of worker across the globe. Lastly, they don’t have SOC2 certification, which many businesses require to safeguard their data when working with EOR providers.
Pricing: €649 p/month ($724) per employee for up to 4 employees. Price decreases if onboarding more people.
Playroll ticks the boxes on robust compliance, broad country coverage and many owned entities. This is similar to many of the competitors mentioned on this list, and are some of the standard offerings you should look out for when choosing an EOR provider that offers comprehensive services.
Overall, though there are many strong EOR contenders on the market, Playroll stands out for its competitive pricing, as well as its on-the-ground support for businesses of all sizes – with dedicated support and flexibility for both employers and employees.
We believe quality support is the single most important trait for an EOR provider, since EORs support businesses that are expanding into jurisdictions they’re often unfamiliar with. This means quick responses to tricky compliance questions, flexibility to customer needs and a truly human touch is invaluable.
Book a chat with our team to find out how we can help you scale your global team.
Compare the top EOR providers side-by-side, with a full breakdown on cost, support, coverage and more.
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An Employer Of Record (EOR) is a third-party service that handles employment responsibilities for your company, like payroll, taxes, benefits, and compliance with local labor laws. The EOR legally employs your global team on paper, while you manage the employee's daily activities.
EOR providers typically operate under these business models: using their own wholly-owned local entities, partnerships with local providers, or a combination of these two approaches. A wholly-owned EOR model means the provider sets up its own entities in each country and retains full control over hiring and payroll.
In contrast, some EORs partner with local vendors and outsource these tasks. While this can be cheaper for the EOR, it may lead to less reliable service for you. Wholly-owned entities has the following advantages:
Selecting an EOR partner with a robust network of wholly owned entities can give you advantages in all these areas.
It's important to find an EOR with transparent pricing. Some providers may have hidden fees, like onboarding and offboarding charges, which can increase costs unexpectedly. Look for an EOR that clearly communicates all potential expenses upfront, is straightforward in their invoicing, cost effective and offers a clear breakdown of what’s included in their pricing.
Lastly, they should offer flexibility in their pricing models that suits the needs of your business: this includes offering monthly charges for full-time employees over requiring annual commitments for lower rates.
The level of support an EOR provides can make or break your global employment strategy. Quick response times and hands-on support are essential, especially when dealing with complex issues like payroll queries or legal compliance in jurisdictions you might be unfamiliar with.
Before bringing an EOR provider on board, check their public reviews on platforms like G2 and Trustpilot. Additionally, ensure that the EOR offers dedicated support for your employees to ensure employee satisfaction and retention. Be sure to ask if dedicated support comes free of charge, as some EOR providers charge extra for this service.
Your EOR provider should have a strong presence in the countries where you wish to expand in the short-term and in the long run. In cases where they do not operate in your desired country, your growth might be hampered if you're locked into a contract you’re unhappy with. Some providers also charge fixed offboarding fees – it’s a good idea to ask whether this is the case before you commit to a provider.
Identify a company with comprehensive country coverage. For example, Playroll operates in over 180+ regions and offers the extensive coverage required to support your global ambitions.
An ideal EOR should help you hire both full-time employees and contractors legally. This flexibility is essential as your workforce needs may evolve over time. It’s much easier to use one service provider that can cater for all potential needs, than having to choose different providers to hire full-time employees and contractors.
Additionally, the EOR provider should be able to assist with classifying your workers correctly to avoid the penalties associated with misclassifying employees as contractors, and convert contractors to full-time employees if needed.
Check that your chosen EOR provider will support hiring different types of workers, in all the regions you’re interested in.
Competitive employee benefits are a key component of attracting and retaining top talent. Your EOR should offer a comprehensive benefits package that includes both local benefits and global options.
Enquire about additional services like benefits management and visa support. The more robust and flexible the benefits, the better equipped you’ll be to support your international team no matter any curveballs that might come your way.
Timely and accurate payroll is a non-negotiable part of your day-to-day operations when managing a global workforce. Having delayed and faulty payroll can result in great reputational harm to your business and potential legal fallout. Ensure the EOR has a proven track record of paying employees on time and offers a user-friendly payroll system.
Before committing, ask for a demonstration of how their payroll system works and whether it provides a clear view of all transactions in one place. Ask how their invoicing system works, as some providers can make this needlessly complex.
Your data should always be safe, and data security is an important consideration while choosing an EOR. Ensure this by checking the certifications the EOR holds, such as GDPR and SOC2, and inquire about the measures they take to protect your Intellectual Property. An EOR provider should guarantee that all contracts are compliantly set up to ensure your IP will belong to you.
Be wary of EORs that rely heavily on third-party partners since this can increase the risk of data security issues.
Compliance with local labor laws is one of the main reasons to partner with an EOR. The right EOR should have a team of experts on hand to help you navigate challenges such as employee misclassification risk, and meeting all compliance requirements in new markets. Again, be sure to check if the EOR provider has a track record of quick response times, as you might need fast support when it comes to questions of compliance.
Ask about their legal expertise in the specific countries you’re interested in and how they help you stay compliant with local regulations.
Employment contracts can vary across different regions and your EOR should be flexible to your specific needs and can create customized agreements if needed. Ask about their process for amending contracts and how long it typically takes.
Flexibility in this area ensures your contracts are aligned with both local laws and your business objectives.
Employee terminations can be difficult and complicated, making it a matter that should be handled carefully. Ensure the EOR has a clear and compliant process for managing terminations, including support for both the employer and the employee during the offboarding process. Understand this process thoroughly before entering into a partnership to prevent legal issues in the future.
If you're considering moving an employee from an EOR to one of your own entities, many EOR providers require a ‘resign and rehire’ process. During this process, the employee resigns from the EOR and is rehired by your entity. This approach can complicate the businesses’ relationship with the employee.
Clarify with the EOR if they offer a flexible transfer process.
Choosing the right EOR partner is fundamental for your business’s global expansion. Playroll stands out by meeting the criteria mentioned above, offering extensive country coverage at 180+ regions with a robust network of wholly owned entities.
Enjoy transparent, best-in-class pricing, dedicated support for employees and employees, and a flexible approach to employment contracts – with a team of HR, finance and legal experts on hand every step of the way.
Compare EOR providers and book a demo with Playroll today to explore how we can support your international growth.
Establishing a foreign subsidiary is the traditional route to expanding globally as a business. While it’s one way to grow as a company and establish your reputation as a global employer, the process can be lengthy, complicated and requires significant resources as a business.
This article will deep-dive into the pros and cons of establishing a foreign subsidiary and the steps involved in setting one up. Plus, we outline alternatives that can save significant time and cost when expanding into new markets.
A foreign subsidiary is a separate legal entity established by a parent company in another country. It operates independently but remains under the control of the parent company. Establishing such a subsidiary allows businesses to access new markets, mitigate risks, and optimize tax benefits.
Companies often choose between wholly owned subsidiaries, where they hold 100% control, partially owned subsidiaries, shared with local partners, or joint ventures formed in collaboration with other entities.
Companies typically establish foreign subsidiaries to access new markets, mitigate their risks and optimize tax benefits.
Types of Subsidiaries:
A foreign branch is not a separate legal entity and the parent company bears full liability for its operations. In contrast, a foreign subsidiary is a distinct legal entity, providing better legal protection and compliance independence. Understanding these differences is crucial for businesses to make informed decisions about their global expansion strategy.
Creating a foreign subsidiary can open up your business to permanent establishment (PE) risk, which subjects the parent company to local taxation and regulatory requirements. This risk underscores the importance of thorough research and compliance with local laws to avoid unexpected liabilities.
Establishing a foreign subsidiary involves high initial setup costs, ongoing operational expenses, and extensive research to ensure compliance with local regulations. The time-consuming nature of these tasks can strain resources and delay market entry.
Cultural differences may also pose integration challenges, impacting organizational cohesion. Additionally, closing down a foreign subsidiary can be a complicated and costly process, requiring careful consideration and planning.
Despite the challenges, establishing a foreign subsidiary offer benefits too. They provide access to new markets, enabling businesses to expand their global presence and reach new customers. Subsidiaries can also offer tax benefits, taking advantage of favorable local tax regimes.
By operating as a separate legal entity, a subsidiary reduces the parent company's legal risks. This structure allows for better division of labor and resource allocation, enhancing operational efficiency. Moreover, having a local subsidiary builds trust and credibility with customers in the new market, fostering brand loyalty.
Often, it makes sense to open a foreign subsidiary if you're planning to hire many new employees in a new market, to justify the investment in time and cost.
To establish a foreign subsidiary, businesses must conduct preliminary research into the target market to understand local employment practices and compliance requirements. Forming an expansion team and planning the hiring strategy for the new market is essential. Ensuring compliance with local labor laws will usually involve consulting with your own appointed team of legal, financial, and tax experts.
Deciding on the appropriate entity structure, such as an LLC or corporation, is a critical step. Securing funding for both setup and operational costs is necessary, along with appointing a board of directors and management team.
Gathering all necessary documentation, including business plans and legal agreements, and registering with local authorities are vital steps in the process. Finally, setting up operations involves hiring employees, establishing offices and infrastructure, and developing local partnerships.
For businesses seeking a less complex and cost-effective approach to hiring internationally, there are two alternative solutions:
Employing contractors allows businesses to manage overseas operations without establishing a legal entity, though it’s only suitable if you’re looking for support with short-term projects. Treating contractors the same as a full-time employee carries misclassification risks.
An Employer Of Record is a third party service that assumes all employer responsibilities on your behalf in new regions, handling payroll, taxes, and compliance with local employment laws.
It offers a route to quick market entry and vastly reduces the financial and administrative burden for businesses, offering an alternative to the traditional method of establishing legal entities.
Companies often use Employer Of Record services for the following reasons:
Playroll's EOR services can be a strategic solution for businesses looking to expand globally without worrying about the complexities of setting up a foreign subsidiary.
Playroll has a global footprint in 180+ regions, and teams of experts on hand to help navigate international hiring and ensure you stay fully compliant – with direct support for employers and employees, every step of the way. Hire, pay and manage a global workforce, all in one platform.
Speak to our experts to find out how Playroll can help you scale your global workforce.
With the Employer of Record market growing at a 6.8% CAGR, reaching USD 6604.4 million by 2029, the trend leans towards EOR companies for quicker, compliant market entry. Firms continue to evaluate EORs' speed against the solid ground of legal entities.
The dilemma is clear: Should you get EOR services or establish your own entity abroad?
Let's dive into what EOR services and legal entities entail, and how they each play a role in supporting companies' global ambitions.
An Employer of Record (EOR) simplifies the process of hiring overseas by acting as the legal employer for your staff abroad. This arrangement covers all compliance, payroll, and HR tasks in line with local laws. It's an ideal solution for businesses looking to expand internationally without the hassle of creating their own legal entity in each country of operation.
Essentially, EORs offer a direct route to global talent, legally employ workers on behalf of companies, and meet local employment standards.
On the other hand, forming a legal entity such as a limited liability company (LLC), general partnerships, or limited liability partnerships represents a different strategy. This is the option for establishing a more permanent foothold in a new market.
The own entity route allows businesses control over their foreign operations and workforce, but requires navigating the complexities of local legal, tax, and employment landscapes.
Setting up an LLC or PEO (Professional Employer Organization) provides substantial long-term advantages and demonstrates a solid commitment to the local market. However, it demands considerable resources, time, and legal expertise to implement and sustain.
Each pathway offers distinct benefits and challenges – let’s unpack them together.
Choosing between leveraging an EOR for expedient market access and establishing a company for deeper market integration depends on a company's objectives, resource availability, and risk tolerance.
Here's a straightforward comparison between EOR services and creating a legal entity for global business expansion.
Navigating global HR solutions means choosing between Employer of Record (EOR) services, a Professional Employer Organization (PEO), or setting up your own legal entity. The differences may seem subtle but are critical.
An EOR handles the legal and administrative duties of employing staff abroad, making it a cost-effective solution for companies that want to hire internationally without setting up local entities. The EOR becomes the local employer, taking on responsibilities such as payroll, taxes, and compliance.
A PEO, on the other hand, offers a broader suite of HR services, including recruitment, training, and employee benefits administration, through a co-employment model. This means your company shares employer responsibilities with the PEO, retaining some legal and compliance obligations. PEOs are ideal for domestic market-focused businesses looking to streamline HR functions and enhance support without relinquishing complete control.
Setting up your own legal entity involves establishing a local company in each country where you hire employees without involving an EOR or PEO. This route gives you full control over HR processes and compliance, but comes with significant costs and administrative burdens. Unlike EOR services, which handle local employment laws for you, or PEOs that share responsibilities, having your own entity means shouldering all legal, tax, and operational requirements independently.
Also Read: Employer of Record vs. PEO: What's the Difference?
Switching between employer of record companies and setting up your own legal entity, or vice versa, hinges on your goals. If cost savings, compliance simplicity, and operational flexibility are your priorities, work with an employer of record EOR services.
Conversely, setting up your own entity grants you full control over your operations but at a steeper cost. You assume all legal and compliance responsibilities, which can be resource-intensive. For businesses aiming to solidify their presence in a specific market with extensive resources, this approach can be beneficial.
Working with the best EORs means you tap into a streamlined global HR ecosystem. EOR services handle local labor laws, reducing your administrative burden. This allows you to hire global workforces without the need to establish a local entity, thus slashing overhead costs. EOR allows you to hire swiftly and scale operations, ideal for dynamic markets.
Staffing agencies differ from EORs, PEOs, and setting up your own entities primarily in their scope and function. While staffing agencies focus on recruiting and placing temporary or permanent employees, they do not handle payroll, compliance, or benefits administration.
Unlike EORs, staffing agencies leave the client company as the legal employer. This means the client remains responsible for compliance with local labor laws and other employer obligations, whereas EORs and PEOs manage these aspects on behalf of the company.
In this complex landscape, Playroll emerges not just as a provider but as a navigator, offering clarity and direction in choosing the best employer of record to simplify market entry. Ready to streamline your global expansion? Request a Playroll demo today.
By 2026, the HR outsourcing market is expected to grow by US$10.90 billion. As businesses navigate the hiring landscape, HR outsourcing firms like Professional Employer Organizations (PEOs) have emerged as allies to support optimizing and improving day to day operations.
And then there are Employers of Record (EOR), which serve as a comprehensive service for companies aiming to expand internationally. Let’s brush over the definitions:
What is it? A PEO acts as an outsourced HR partner
Who is it for? Businesses without formalized inhouse HR functions
How does it work? By forming a co-employment agreement, PEOs work closely with companies to manage a variety of HR-related functions.
What does it handle? Payroll and payroll tax management, benefits administration, HR compliance, risk management and employee relations.
By partnering with a PEO, businesses can focus on their core operations without the worry of managing the more intricate aspects of HR.
What is it? The Employment of Record (EOR) model managing companies through established international entities
Who is it for? Global employers looking to outsource the employment of its staff overseas,.
How does it work? By providing its own legal entities to employ staff internationally.
What does it handle? The maintenance of normal working relationships with employees across borders through HR tech, visa support, benefits management, etc.
While the concepts "PEO," "employee leasing," and "HR outsourcing" can be easily confused, there are differences that exist between them. Here’s what you need to know:
A PEO shares employer responsibilities with a client company though a co-employment relationship. The organization is directly responsible for managing HR functions and compliance on behalf of the client company
Also referred to as "staff leasing", employee leasing typically involves providing workers to a client company for a contractually agreed upon fee. The client company maintains control over day-to-day employee relations.
HR outsourcing involves contracting specific HR functions out to external HR service providers, without forming a shared co-employment. Specific HR-related functions are subcontracted to specialized HR firms on an ad-hoc basis.
Still weighing your options? Let’s break down the pros and cons of choosing one over the other.
EORs might involve higher costs and offer limited control over HR functions, as well as less direct employee engagement. But PEOs can introduce complexities in shared control and HR policy conflicts.
However, overall both models provide robust solutions but cater to distinctly different business needs.
Playroll is an employer of record service that assumes full responsibility for local labor laws and regulations around global hiring.
Importantly, with Playroll EOR, the client company maintains control over the employees' daily tasks and duties, unlike in a typical PEO arrangement where some operational controls are shared.
The burgeoning interest in PEO and EOR services, particularly in the US, parallels the increasing foreign direct investment, highlighting the EOR's vital role in facilitating international business expansion without the administrative burdens typically associated with entering new markets.
As businesses look towards sustainable growth, EORs allow companies to maintain a competitive edge in international markets, ensuring they remain agile and compliant amid shifting economic and political climates.
Ultimately, the choice between EOR and PEO hinges on a business’s specific needs, but the rise of the EOR model points to a shift towards global employment solutions that prioritize efficiency, compliance, and strategic international presence.
Start your global hiring journey today from $399 per employee.
Your business is growing—you’re breaking the mold, and now you’re ready to enter new, international markets.
But, becoming a global business isn’t easy. You have big decisions to make and new compliance concerns to manage, all while keeping up with your current operations. On your journey to the world stage, you might need some help from an employer of record service.
Here we explore seven benefits of seeking expert help from an international employer of record to help you make the best decisions for the future of your business.
Also read our breakdown of employer of record services: What Is an EOR and Why Should You Have One?
Employers of record cover a lot of ground—their expertise and tools can help you navigate the international market, streamline your HR operations and plan for future growth.
Let’s explore the benefits of using such an employment service to support your growing, global business:
When you expand into a new country, you’ll likely need to hire additional, local help to work in brick-and-mortar facilities, complete the services your business offers, provide customer support and more.
With help from a global employer of record, you can seamlessly add new staff to your team to quickly and efficiently onboard them into your workforce. How? By letting them act as your legal entity.
In most cases, a business that legally employs abroad must establish their local entities within the borders of their employees’ home countries in order to remain in compliance with local laws. But, when you use an employer of record, you can skip that step. EORs act as the legal employer as worldwide entities, exempting their clients from having to.
You can instead begin your talent search and hire new staff without waiting for local governments to approve your legal entity applications!
When you expand to even just one more country, you suddenly double your compliance workload—unless you partner with an international employer of record, also referred to as globalization partners.
EORs support compliance monitoring so you don’t need to be an expert on international labor laws, minimum employee benefits or business regulations to run a worldwide business. Their expert teams ensure that your business is always operating above board, even if you’re not familiar with laws in your new markets.
Employers of record are also international HR compliance experts legally responsible for keeping up with changing laws, research regulations abroad and complete mandatory reporting benchmarks related to labor and legal establishment. This saves you the energy of researching the labor and benefits laws in your new employees’ homelands, leaving that burden to the professionals while you build new teams.
Remove the pressure of required compliance with local employment laws, such as:
Running a business is time-consuming—especially when you need that bandwidth to focus on innovation, operations, and international growth. Key stakeholders like presidents, owners and CEOs have enough on their plates; employers of record can help reduce their workload by automating and streamlining HR and tax-related tasks.
Take Tax filing and payments as an example—EORs file and pay taxes domestically and abroad as a part of their payroll management system. Importantly, they assume any liability for filing and payment mistakes, taking the risk off of your shoulders.
If an operational measure can save key stakeholders time, it can certainly do the same for other employees. When employees have fewer banal tasks on their plate, they can dedicate their time to innovation, brainstorming and project work.
Finally, EORs can also save time by providing simple, structured and paperless onboarding and HR data collection. As the old adage goes, “Time is money”!
Reducing HR workloads not only saves on overhead costs but also allows employees to focus on profit-generating activities such as service delivery, product development, and client communication.
Take benefits administration, for example. By partnering with an employer of record, firms gain access to an extensive international benefits network. This can secure advantageous group-rate prices, thereby optimizing staffing expenditures.
Employers of record can also help with financial planning: estimating costs, creating short- and long-term plans, and budgeting for future staffing investments. They keep you from hiring staff you can’t afford, and optimize the profits available for HR investments.
Finally, EORs help eliminate routine tasks such as payroll management, compliance research, and other internal duties that represent a significant overhead.
Streamlined by an employer of record, employees can allocate their time more effectively to devise new efficiency strategies to cut costs further and drive growth in new international markets
When it comes to operating a business, implementing reliable global payroll processes is vital to employee morale and your reputation as a business leader. Slipping can decrease employees’ trust in company leadership, or even motivate employees to look for work elsewhere. In addition, late payments without cause or prior warning—in some cases—are against the law.
By providing payroll management services, employers of record ensure that your company is always up-to-date on payroll tasks and tax functions. And, arguably most importantly, employers of record can complete these tasks without regular input from in-house HR or finance staff once employee onboarding is complete.
Business owners can then stay on top of:
Your business probably started small, and there are certainly benefits to maintaining a lean staff. Has that changed, and do you want to do something about it?
Entrusting an employer of record with your HR procedures, regulatory tasks and tax-related obligations can prevent overstaffing: instead of hiring a team of employees to handle each of the three, you can assign them all to one entity.
In addition, consider employers of records’ roles in international growth. Establishing a legal entity in a foreign country requires manpower—but, if you partner with an employer of record, you can bypass this step and reduce your staffing needs. Get yourself back on track with smaller communication chains and lower management workload!
Technology changes quickly—investing in software to improve your operational efficiency always comes with a risk of future obsolescence and, thus, reduced ROI.
But, employers of record develop their own platforms instead of relying upon third-party software providers to maintain their tech. Partnering with them gives you access to automated payroll services; EORs handle payroll solutions for growing companies looking to automate global HR processes. They calculate wages, deductions, and benefits, and deliver international contractor or employee paychecks via direct deposit in a completely paperless, streamlined process.
Usually, an EOR’s proprietary platform or software are their major selling point—so they are always working on improvements behind the scenes. Employers of record also invest in their staff, who are trained to become experts in their own software and provide high-quality tech services.
Finally, employers of record control the data that they use—instead of risking a security breach with additional third-party software, they keep your confidential company information self-contained. Get the best of both worlds: cutting-edge tech and seasoned professionals who know how to use it.
Also Read: Know the difference between an employer of record and a professional employer organization or PEO
For more than two decades, Payroll’s teams of HR and compliance experts have been helping worldwide businesses spread their wings, enter new markets, and generate profit.
Plus, our all-in-one, user-friendly platform can help you monitor compliance efforts, plan future staffing investments, efficiently onboard employees and so much more.
You’re ready to go worldwide, and Playroll is ready to help. Book a demo.
Expanding your business and seeking a partner to comply with local regulations during the often grueling process? A Professional Employer Organization (PEO) or Employer of Record (EOR) might just be your best bet. Aside from ensuring compliance with local and international employment laws, EOR services handle the responsibilities of day-to-day HR matters, letting you focus on core business growth.
Still curious? Of course you are! In this blog, we delve into the benefits of an Employer of Record, explore how hiring international employees can be simplified, and provide insights into locally compliant employment contracts. Discover everything you need to know about how an EOR can assist with the complexities of international employment, ensuring that your expansion efforts are seamless and legally sound.
Simply put, an employer of record (EOR) is a third-party company that acts as an employer for the sake of tax and legal purposes.
EORs are most commonly used by companies looking to expand internationally or non-recruiting small businesses. This is due to the fact that there are boatloads of benefits when using an EOR if you are looking to sow some seeds across the global pond. Small and large businesses can also benefit from the fact that an employer of record can manage their H.R. and payroll duties.
If your company is aiming for global expansion and looking to hire talent from across the globe in a legally compliant manner, look no further than an EOR. They simplify the complexities of managing payroll taxes and adhering to local entity requirements, making international hiring a walk in the park.
Payroll’s EOR handles all aspects of global workforce needs, offering a wide range of customizable services to meet the unique demands of global employers. We provide EOR services in every country worldwide, ensuring expansion efforts are seamless and efficient.
For the benefit of those just wading into this, let’s refresh on what overseas expansion can look like—without the right EOR sidekick at your back to flag and steer around the maze of pitfalls.
Without an Employer of Record, landing, expanding and opening operations in new regions can be time-consuming, risky and expensive:
Have fun with that! Those who brave the gauntlet of overseas HR and payroll will need to have a will of iron to complete the journey successfully and mentally in one piece.
The route is often lined with so many barriers and potential legal issues that the risk-benefit analysis might not even get the green light.
Now perhaps you appreciate the kinds of miracles EOR partners perform. But it’s important to choose wisely to avoid complications down the road.
Not all Employer of Record partners are created equal, and not all will cater to the same use-cases in the same ways. It’s about knowing your goals and avoiding overinvesting to achieve them.
There are many benefits to partnering with an Employer of Record that can improve your business's overall efficiency—all while allowing you to hire the best talent from anywhere in the world.
Human resources activities, from hiring new employees to processing payroll, require constant attention to every detail, including individual payments, taxes, commissions, reimbursements, and other general employee benefits. With an EOR, you can authorize someone you trust to handle everything on your behalf. This way, you save a lot of time which you can, in turn, invest in effective business development.
Not only will hiring an Employer of Record take a load off your shoulders, you can enjoy the diligence, accuracy of information and practical perks of expansion-strategy implementation that comes along with outsourcing to a seasoned Employer of Record service.
Accuracy is important simply because employment and fiscal law changes so rapidly. When your HR policies and finances are tied to multiple countries, these changes can become a regular month-by-month event, complicating HR narratives.
Managing employees and payroll globally means maintaining legal compliance. However, keeping track of the labor laws of different countries at once is difficult when you do it yourself. As part of your package, an EOR keeps up-to-date tax tables and easily tracks social standards in countries worldwide. With an EOR behind you, you no longer have to worry about regulatory risks.
If you open an international entity and decide against using an EOR once you are up and running, you will become a permanent establishment in the country in which you operate, and it will be your responsibility to ensure that you are fully compliant. This means that your business will become liable for local corporate taxes, income tax, indirect employer tax and value-added tax (VAT).
If you decide to use an EOR partner (like Playroll!), it will be the local and employer for foreign entities managing taxation and statutory requirements. If a compliance issue comes about, thankfully, it will be our problem to deal with and not yours!
Playroll brings a modern, vibrant SaaS approach to extending Employer of Partner service to clients. Combining automation with consultative and partner services, Playroll offers both client independence and expert stewardship.
Despite the young, fresh feel, Playroll has extensive experience building its Employer of Record infrastructure over the course of 20 years and has been managing multinational payroll across the globe for just as long.
With 2,000+ employees in over 40 countries, Playroll can now extend talent-relocation and hiring practice into any county. Playroll is also backed by the VAT IT Group which services 50% of Fortune 500 companies and attends to over 13,000 companies.
If you’re looking for an Employer of Record service with a simple onboarding process that will let you start planning HR costs and overseas expansion for free, Playroll is a great option.
When choosing your Employer of Record partner, make sure you connect with them having clearly defined and understood your own goals. That way, you’ll help them to help you with a tailored approach and the right series of steps in the right order.
Navigate the minefield of global employment with ease with our essential insights on EOR risks every expanding business needs to master.
Employer of Record (EOR) takes over the HR processes of a business, including managing payroll, tax withholding, benefits administration, compliance, and more. That saves time and resources for companies without the financial muscles to keep a dedicated HR team in-house. That said, there are Employer of Record risks for employees and employers that may lead to financial and compliance risks if not addressed.
An Employer of Record is a third-party service provider that offers HR support for small businesses. That enables small business owners to hire and manage employees without an HR department or the need to hire an HR professional.
That said, there are EOR pros and cons. They save businesses time, money, and compliance hassles, especially when building a global workforce.
On the flip side, delegating power to an EOR comes with financial, compliance, and operational/strategic risks. That’s because the business owner loses some level of control over HR and workforce management.
In this article, we delve into common EOR risks, and how Playroll’s EOR experts can help you navigate EOR complexities.
Employers of Record (EORs) charge fees that may pose potential business financial pitfalls. Apart from the set-up fee and the monthly margin, some EORs may levy hidden charges that may not be disclosed upfront, including:
These fees can quickly add up and pose a substantial financial burden to employers. Businesses should ensure a full understanding of an EOR's fee structure and any extra charges, and whether these align with their budget.
Labor laws, tax regulations, and employment standards vary among countries. These may cause serious Employer of Record risks, especially if the EOR doesn't have previous experience in certain labor markets.
Non-compliance with international and local employment laws may attract expensive legal fines, penalties, and lawsuits. Important things to keep in mind to avoid such risks include:
Post-Brexit immigration policies and GDPR are examples of recent regulatory changes in the EU that EORs must adapt to stay compliant and avoid legal consequences.
Some of the best practices to mitigate employer of record risks for employees and employers include:
Pricing and compliance remain the top challenges in the EOR landscape. As this employee management model gains a foothold in global labor markets, EORs will need to figure out strategies for offering superior services at realistic prices.
Changes in the regulatory landscape across global markets are also an interesting trend to watch. To win, EORs must remain compliant and ready to adapt to changing labor laws, data protection regulations, employment practices, and other related legislations.
Playroll.com is a reliable global Employer of Record partner that takes proactive steps to help small businesses avoid financial and compliance pitfalls. Our platform is packed with features and services for EOR risk management, including:
Explore our platform for effective EOR risk management and streamline your payroll with ease at Playroll!
Through these mechanisms, Playroll.com offers a unique value proposition to businesses seeking to mitigate the inherent risks of employing an EOR, making it an appealing choice for businesses aiming to expand their global footprint while minimizing potential pitfalls.
In the dynamic realm of workforce management, businesses often grapple with the choice between an Employer of Record vs a Staffing Agency, but making the right choice can mean the difference between failure and success for your business.
An EOR assumes the role of the legal employer, shouldering responsibilities such as payroll, benefits administration, and compliance. On the contrary, Staffing Agencies function as intermediaries, facilitating connections between businesses and potential candidates without taking on the mantle of an employer. An example of a Staffing Agency includes Global M - an international recruitment consultancy working with SMEs and larger corporates to recruit the most talented professionals for tech teams, helping organizations to scale rapidly.
The essence of these models lies in their functions within the employment process. EORs establish a direct legal relationship with employees, managing all aspects of their employment. Staffing Agencies, in contrast, focus on sourcing and recruiting candidates, leaving the employer responsibilities to the hiring company.
The EOR hiring process is a meticulous journey, encompassing comprehensive onboarding, payroll management, and adherence to legal compliance. EOR services extend to managing international talent seamlessly, ensuring a smooth integration into the workforce. Staffing Agencies streamline recruitment processes, presenting a curated pool of potential candidates to businesses.
However, their involvement is primarily confined to the sourcing and recruitment phase, leaving subsequent employment procedures to the hiring company.
The key differences between these processes lie in the depth of involvement. EORs are deeply entrenched in the entire employment lifecycle, ensuring legal compliance and efficient payroll management, whereas Staffing Agencies focus predominantly on candidate acquisition.
A nuanced understanding of the strengths and weaknesses of each model is imperative. While EORs provide comprehensive HR solutions, Staffing Agencies excel in agility and flexibility in talent acquisition.
EORs bear the weight of legal obligations associated with employment. This includes compliance with local labor laws, payroll taxes, and other regulatory requirements. This ensures a secure and legally sound employment framework for businesses.
Staffing Agencies, by design, share employment responsibilities. However, the client retains certain legal obligations. This hybrid approach allows for a more distributed responsibility, but businesses must remain vigilant about compliance.
Delving into the legal intricacies, businesses must consider the level of liability they are willing to assume.
EORs offer a comprehensive legal shield, while Staffing Agencies provide a more shared responsibility model.
In the realm of workforce management, a critical aspect for businesses to navigate is to weight up the breakdown of costs between an Employer of Record vs Staffing Agency. Understanding the distinct cost structures is essential for informed decision-making.
EORs typically involve fixed costs, covering payroll, benefits administration, compliance management, and other related services. This predictable cost structure aids businesses in budgeting and financial planning. For example, Playroll's pricing start from $399 p/month per employee per month, with a flat fee of $35 p/month per contractor.
Staffing Agencies often charge a percentage of the employee's salary, along with additional fees for their services. This variable cost structure allows businesses to align expenses with actual hiring needs.
The financial considerations go beyond mere cost comparison. Businesses must weigh the predictability of fixed costs with EOR against the variable costs associated with Staffing Agencies.
Identifying the most suitable business scenarios for an Employer of Record (EOR) involves recognizing its preference among businesses aspiring for global expansion. EORs stand out with their centralized HR management, offering significant benefits to organizations with diverse and international workforces.
On the other hand, businesses requiring flexibility in workforce management, especially start-ups and enterprises with fluctuating staffing needs, often find Staffing Agencies to be a pragmatic choice. The key lies in understanding the unique needs of a business and aligning them with the strengths of either an EOR or a Staffing Agency, making a strategic decision based on specific operational requirements.
The suitability of each model is contingent on the unique needs of a business. Recognizing these needs and aligning them with the strengths of either an EOR or a Staffing Agency is crucial.
When comparing control and flexibility between an Employer of Record vs Staffing Agency, nuances emerge in workforce management. EORs grant businesses a higher degree of control, enabling streamlined HR processes and standardized policy enforcement. Conversely, Staffing Agencies provide flexibility in workforce management, accommodating scaling based on business needs. However, this flexibility involves relinquishing some control over HR functions.
Striking the right balance between control and flexibility becomes a nuanced decision, requiring businesses to carefully evaluate their priorities and management preferences.
"Employee benefits and HR management are pivotal considerations when weighing the options between an Employer of Record vs Staffing Agency. Opting for an EOR ensures a comprehensive array of employee benefits and robust HR support. This encompasses various aspects, from healthcare provisions to retirement plans, creating a secure and well-rounded employment framework.
In contrast, Staffing Agencies may offer a more limited scope of benefits, with the depth of HR management contingent on the specific terms negotiated between the agency and the client. The depth and breadth of HR management offerings become pivotal factors when deliberating between an Employer of Record and a Staffing Agency. A nuanced understanding of the level of support needed for your business is essential for making an informed decision that aligns with your specific HR and workforce management requirements."
The depth and breadth of HR management offerings become pivotal in when considering an Employer of Record vs Staffing Agency. Understanding the level of support needed for your business with help you weight up the benefits for your benefits, enabling you to make an informed decision.
When navigating the feasibility of an Employer of Record vs Staffing Agency, there are three things to keep in mind. Let's explore them in more detail:
Navigating the complexities of international expansion is now a breeze with Playroll's cutting-edge Employer of Record Services. Our advanced technology seamlessly connects companies with top-tier talent across 180+ countries, removing the need for establishing local entities. Playroll ensures a smooth hiring process, allowing businesses to focus on what truly matters—the business of their business. Discover the efficiency of our platform by scheduling a demo with our dedicated team. Let us demonstrate how Playroll can effortlessly meet all your Employer of Record needs, freeing you from the intricacies of global workforce management.
The term "Employer of Record UK" signifies a pivotal role in the realm of international business operations. It's not just bureaucratic jargon; its significance lies in its function as a local entity that assumes the responsibility of hiring employees on behalf of a foreign company. This involves not only navigating the intricacies of the UK labor laws but also ensuring adherence to various legal requirements that govern the employment landscape.
The complexity of UK employment laws necessitates specialized expertise to navigate smoothly. Employer of Record in the UK services play a crucial role in this arena, constantly staying informed about the evolving legal landscape. They ensure that businesses remain compliant with regulations governing employment contracts, working hours, and other critical aspects. This involves proactive monitoring of legislative changes to adjust HR policies accordingly, providing businesses with a reliable shield against legal pitfalls.
Statutory Sick Pay (SSP) is a critical component of the UK employment landscape, and understanding and managing it require meticulous attention. Employer of Record services in the UK take on a pivotal role in managing SSP, serving as a reliable bridge between employers and employees. They ensure that employees receive the benefits they are entitled to during periods of illness while concurrently ensuring compliance with the intricate rules governing sick pay. The Employer of Record in the UK plays a crucial part in administering SSP efficiently, handling the complexities of documentation, calculations, and timely disbursements.
Negotiating notice periods and crafting contracts of employment are intricate tasks that demand precision. Employer of Record in the UK provides valuable expertise in tailoring contracts, outlining notice periods, and ensuring that these documents align with the stipulations of UK labor laws. By addressing these fundamental aspects of HR management, EORs contribute to the establishment of clear expectations between employers and employees, promoting a harmonious working relationship.
The labyrinthine nature of national insurance contributions and payroll tax in the UK can be overwhelming for businesses entering the market. Employer of Record in the UK shoulder the responsibility of handling these financial intricacies. This includes ensuring accurate and timely payments, navigating tax regulations, and safeguarding businesses against potential pitfalls. By doing so, EORs alleviate the administrative burden on businesses, allowing them to focus on their core operations without being bogged down by financial complexities.
In a competitive job market, offering attractive employee benefits is crucial for talent acquisition and retention. Employer of Record services in the UK assist businesses in structuring comprehensive benefit packages. This includes health insurance, retirement plans, and other perks that contribute to employee satisfaction and long-term commitment. Moreover, EORs play a proactive role in ensuring that these benefit packages comply with both industry standards and the ever-evolving legal landscape, fostering a positive work environment.
When businesses contemplate expanding operations to the United Kingdom, the process of hiring employees becomes a pivotal but challenging aspect. Employer of Record in the UK simplify this process by assuming responsibilities associated with recruitment, onboarding, and ongoing HR management. Employer of Record in the UK plays a particularly crucial role in navigating the complexities of hiring, serving as a liaison between businesses and the intricacies of the local employment landscape.
Operating in the UK comes with a myriad of legal requirements that span from employment contracts to adherence to notice periods. Employer of Record in the UK act as a protective shield, ensuring that businesses are not only aware of these legal obligations but also fully compliant. This proactive approach mitigates the risk of legal repercussions, providing a solid foundation for businesses to thrive in the UK market. EORs act as a strategic partner in legal compliance, helping businesses navigate the complex regulatory landscape and avoid potential pitfalls that could hamper their growth.
One of the distinct advantages of Employer of Record in the UK lies in their local expertise coupled with a global reach. This unique combination allows businesses to harness the benefits of international expansion while seamlessly navigating the nuances of the UK employment landscape. Local expertise ensures a deep understanding of the local business culture, employment laws, and market dynamics, allowing Employer of Record in the UK to provide tailored solutions that align with the specific needs of each business. Simultaneously, their global reach enables businesses to tap into a wider talent pool and explore international growth opportunities.
Employer of Record in the UK offers flexible solutions that cater to diverse business needs. Whether a business is looking to hire employees for short-term projects or establish a long-term presence in the UK, EOR services can adapt to these varied requirements. This flexibility ensures that companies can scale their operations without being hindered by administrative complexities. EOR services in the UK can swiftly adjust their services to accommodate changes in business needs, offering a level of adaptability that traditional HR management models may struggle to match.
Managing HR functions in a foreign country can be resource-intensive, both in terms of time and money. Playroll provides cost-efficient solutions by streamlining processes and leveraging economies of scale. Employer of Record in the UK offered by playroll.com play a pivotal role in optimizing operational efficiency, particularly in the context of managing HR functions abroad.
Staying compliant with UK employment laws is a top priority, and Playroll takes this responsibility seriously. As an Employer of Record service in the UK, Playroll not only ensures that your business understands the legal obligations but also actively works to keep your operations fully compliant. This proactive approach mitigates the risk of legal repercussions, providing a solid foundation for your business to thrive in the UK market.
Expanding operations to the United Kingdom involves navigating the complexities of hiring employees. Playroll simplifies this process by assuming responsibilities associated with recruitment and onboarding. With a streamlined approach, playroll.com ensures that your business complies with local labor laws and cultural expectations, fostering a seamless transition for both employers and employees.
Communication is a cornerstone of successful partnerships. Playroll places a high value on transparent and clear communication. As an Employer of Record in the UK Playroll goes beyond the basics, not only explaining the intricacies of UK employment laws but also providing regular updates on compliance matters. This commitment ensures that you are well-informed at every step, promoting transparency and clarity in the working relationship.
Business landscapes evolve, and Playroll understands the importance of adaptability. Whether there are changes in legal regulations or shifts in your business needs, Playroll provides continuous support and adaptability. This ensures that your business remains agile and responsive to external changes, mitigating potential risks and maximizing opportunities.
Playroll leverages cutting-edge technology to streamline HR processes. From payroll management to compliance monitoring, the platform integrates advanced solutions to ensure accuracy, efficiency, and security. This tech-driven approach not only enhances operational efficiency but also minimizes the risk of errors associated with manual processes.
Partnering with Playroll as your Employer of Record in the UK offers a comprehensive suite of benefits that go beyond mere service provision. It establishes a strategic alliance that positions your business for success in the intricate UK employment landscape. With local expertise, global reach, tailored solutions, cost-efficiency, compliance management, efficient recruitment processes, transparent communication, continuous support, and technology integration, Playroll emerges not just as a service provider but as a catalyst for your business's growth and prosperity.
As your business prepares to venture into the dynamic UK employment landscape, experiencing the streamlined efficiency of playroll.com firsthand is a strategic move. Book a personalized demonstration today to explore how our EOR services can elevate your operations.
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