The Talent500 Blog

Benefits of EOR: Expand Your Global Workforce with an Employer of Record

Engaging an EOR is a crucial part of your global talent strategy. Read more to understand how different EOR cost and pricing structures work, and which one might be the most suitable for your business.

Remote work is the new normal. Organizations are no longer restricted to hiring within a 40-mile radius and now have access to limitless talent from across the world. For any business aiming to scale and grow, entry into foreign markets is a priority.

But with entry into a foreign market, comes the hassle of  compliance with local rules and regulations, tax policies, worker benefits and perk schemes, payroll management and more. Calculating and managing these things costs time and money. Partnering with an EOR changes this.

An employer of record (EOR) is a third-party organization that specializes in handling all the legal and operational requirements of building a global workforce for its client companies. Thus, traditional employment responsibilities like management of payroll and taxation, employee benefits, and other such administrative and legal obligations are undertaken by the EOR. 

Cost of an EOR

Maintaining employees for another employer can get costly. This is because the EOR will take care of more than just hiring and onboarding. Their responsibilities  include payroll management, employee bonuses, perks, benefits management, retaining talent, complying with evolving labor costs and providing steady HR support. In addition, the EOR will also act as a link between the employer and the employee. 

Thus, the exact price of an EOR cannot be determined unless the specifics are known. These could include the region of hiring, number of employees being hired, type of employee being hired, relevant taxation structure and the statutory employer benefits, (contractual/full time) among other things. That being said, let’s see what usually affects the pricing of an EOR.

Types of EOR pricing models

There are two types of EOR pricing models: flat charge structures and percentage arrangements.

In the flat-rate pricing structure, you only pay for the service per employee, regardless of the employee’s compensation. An EOR will typically charge $250 – $500 per employee monthly, depending on the requirements of each employee.  

Under the percentage pricing, EORs get their own cost from your employee’s salaries. Thus, in the long run, a percentage-based pricing structure disincentives you from raising wages or hiring more employees. To offer an employee a bonus or a raise when you pay a percentage, you must pay a third party extra money. 

This is why a flat fee costing structure will always be more beneficial, even though a percentage structure might seem more enticing initially. 

Factors which affect EOR costs

The expenses to the company when recruiting a worker in a certain nation include any taxes, obligatory employer  benefits, and other charges that the local government may impose.

Depending on the country in question, its taxation regime and statutory requirements, the overall employer cost will change. For instance, the Canada pension scheme, occupational health tax, parental health bonus, and workman’s comp insurance are all covered by employer costs in Canada.

Why should you engage an EOR?

The complexity of international employment legislation increases when you take into consideration hiring across multiple nations. It’s better to know when you will need to use an EOR, and when you can survive a DIY adventure into a foreign market.

EORs make the experience smoother and more streamlined. However, engaging with an EOR is an integral part of your global expansion plan, and choosing the wrong partner can result in considerable loss financially. Here are the top benefits of engaging an EOR:

Explore new markets

An EoR enables you to test out expansion into a new nation without the obligation of forming a legal entity in the new country. It enables you to employ professionals  in new international markets, create new streams of income, and attract new clients. In short, it makes global expansion more achievable for companies of all sizes.

Attract & retain global talent

In today’s job climate, the flexibility to work from anywhere is a highly prized perk. Since it’s so difficult to find top talent these days, more and more businesses are choosing to employ remote workers. Additionally, recruiting without regard to location expands your talent pool and enables you to focus on talent with the precise skill sets you need.

A worldwide EOR enables businesses to recruit people from all around the world. It also enables you to retain your top people without having to create an organization when workers desire or need to migrate.

Hassle free tax and payroll management

The EOR is listed as the employee’s employer with the tax authorities. This indicates that they must deduct specific taxes from employee paychecks. They must also adhere to any reporting obligations and regularly submit such sums to the appropriate authorities.

All workers’ payroll is processed by the EOR in accordance with the local laws of the country of residence. Managing the necessary tax deductions, cost reimbursements, and leave entitlements are all included in this. The manner and cycle of payment is determined by the client company’s preferences, local traditions and regulatory requirements.

Most people may assume that employing an EOR will be expensive, however this is frequently a cost-effective choice, especially for new firms. The taxes that must be paid when recruiting staff are already included in the cost of an EOR.

Each expansion into a new overseas market has its own set of complications that need an expert staff. At Talent500, we understand that the transition to location independent working is a multi-layered process involving numerous stakeholders and factors. Our team of experts and network of highly skilled professionals are here to help you build your global team in over 50 countries. Ready to take the first step? Set up a consultation with our team here.


Vikram Ahuja

Vikram Ahuja

A serial entrepreneur and co-founder of Talent500. Enthusiastically strives to expand businesses across multiple domains by bringing creativity to the table. Zealous about pursuing ventures at the intersection of art, technology, and business. An award-winning short film-maker, and well-traveled theatre-performer. Took part in Google's global Daydream Impact program, which promoted the use of Virtual Reality for impact-based stories.

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