Frequently Asked Questions

An EOR becomes the legal employer of your international team members, handling payroll, taxes, benefits, and compliance with local labor laws. Your company retains full control over the employee's role, responsibilities, and day-to-day work. Read our complete guide to Employer of Record services.

You do. The client company manages all day-to-day work, including tasks, performance, scheduling, and team collaboration. The EOR only handles the legal employment relationship: payroll, contracts, compliance, and benefits. Operational control stays entirely with you. Learn more about how EOR services work.

An EOR manages employment contracts, payroll processing, tax withholding and filing, statutory benefits, compliance with local labor laws, and onboarding and offboarding administration. The EOR assumes the legal employer role so the client company can focus on managing the work itself. See a full breakdown of EOR responsibilities.

An EOR calculates and processes payroll in local currencies, withholds income taxes and social contributions, files required tax documents with local authorities, and ensures all payments comply with regional regulations. This removes the need for the client to navigate foreign tax systems directly. Read more in our Employer of Record guide.

An EOR monitors and applies local labor laws, tax regulations, and employment standards in every country where it operates. This includes generating compliant contracts, tracking regulatory changes, and adjusting employment terms as laws evolve, reducing the risk of fines or legal disputes. Learn how compliance works under an EOR.

An EOR administers locally compliant benefits including health insurance, paid leave, retirement or pension plans, and other statutory entitlements. Benefits packages are tailored to meet each country's legal requirements and market standards. Explore our guide to global employee benefits.

Onboarding under an EOR typically includes contract generation, document collection, benefits enrollment, and payroll setup. Offboarding covers termination procedures, final pay calculations, statutory notice periods, and severance in accordance with local law. See how EOR onboarding works in detail.

Key benefits include the ability to hire internationally without establishing a legal entity, reduced compliance risk, faster onboarding, streamlined payroll and tax administration, and access to locally competitive benefits packages. Read our full analysis of EOR pros and cons.

Because the EOR already has legal entities and compliance infrastructure in place, new hires can be onboarded in days rather than the weeks or months it takes to set up a foreign entity. Contracts, payroll, and benefits are handled from day one. Learn about the EOR onboarding process.

An EOR eliminates the expense of setting up and maintaining foreign legal entities, which can cost tens of thousands of dollars per country. It also reduces the need for in-house legal and payroll specialists in each market. See a detailed cost comparison in our EOR guide.

The EOR assumes legal employer status and takes on responsibility for adhering to local labor laws, tax filings, and employment regulations. This shifts compliance risk away from the client company and onto a provider with dedicated in-country expertise. Understand EOR risk mitigation in our pros and cons guide.

An EOR lets companies hire in a new country without committing to entity setup, making it possible to test market viability with a small team before investing in permanent infrastructure. If the market doesn't work out, winding down is far simpler. Read our guide to leveraging an EOR for global growth.

A PEO enters a co-employment arrangement where both the PEO and your company share employer responsibilities. An EOR becomes the sole legal employer on paper, taking full responsibility for payroll, taxes, and compliance while you direct the employee's work. See a full comparison of EOR, PEO, GEO, and AOR models.

Yes. Because a PEO operates as a co-employer, your company must already have a registered legal entity in the country where the employee works. The PEO supplements your existing HR infrastructure rather than replacing the need for local incorporation. Learn more in our EOR vs. PEO comparison.

No. An EOR employs workers through its own legal entities, so your company does not need to establish or maintain a local entity. This is the primary reason companies use an EOR to enter new markets quickly. Read the full breakdown of entity requirements.

In a PEO model, legal liability is shared between your company and the PEO. In an EOR model, the EOR assumes full legal employer liability for compliance, payroll, and tax obligations. Your company retains liability only for workplace conduct and management. Compare liability structures across models.

An EOR typically enables faster hiring because it does not require you to set up a local entity first. With a PEO, you need an existing entity before the co-employment relationship can begin, which adds weeks or months to the process. Read more about speed differences between models.

A PEO is best suited for companies that already have a legal entity in a country and want to outsource HR functions like benefits administration, payroll processing, and compliance management for an existing domestic workforce. Read our comprehensive guide to Professional Employer Organizations.

An EOR is best suited for companies that want to hire employees in countries where they don't have a legal entity. It's ideal for international expansion, remote-first hiring, or testing new markets without the cost and complexity of entity setup. See our guide to what an EOR does.

Choose a PEO when you already have a local entity and need help managing HR operations at scale, particularly benefits, payroll, and compliance for a sizable domestic workforce. PEOs work best when you want shared responsibility rather than full outsourcing. Learn when a PEO makes sense in our PEO guide.

Choose an EOR when you need to hire internationally without establishing a foreign entity, when speed to hire is critical, or when you want to test a new market with minimal commitment. EORs are especially valuable for startups and companies scaling globally. See how startups use EOR services.

PEOs generally work best for companies with at least 10 to 20 employees in a single country, as co-employment arrangements are more cost-effective at scale. Smaller teams may find the overhead and entity requirements harder to justify. Read more about PEO suitability in our guide.

Yes. This is one of the EOR model's core strengths. Unlike entity setup, which requires the same investment whether you hire one person or fifty, an EOR charges per employee, making it practical and cost-effective to start with a small team. See how startups use EORs to hire globally.

The EOR takes on legal and compliance risk as the official employer of record. This includes responsibility for correct tax withholding, labor law adherence, and statutory benefits. The client company's risk is limited to managing the work relationship and workplace conduct. Explore how EORs mitigate risk in our pros and cons guide.

A Common Law Employer directly employs workers through its own entity and handles all legal obligations in-house. An EOR is a third party that becomes the legal employer on paper, managing compliance and payroll while the client company directs the employee's day-to-day work.

Under a Common Law Employer arrangement, your company holds full legal responsibility for employment compliance. With an EOR, the provider assumes legal employer status and takes on responsibility for payroll, tax filings, and labor law adherence in the employee's country. Compare this to the foreign entity model.

In both models, the client company manages the employee's daily work, performance, and responsibilities. The difference is purely on the legal and administrative side. A Common Law Employer handles those functions itself, while an EOR handles them on the company's behalf.

A Common Law Employer must build and maintain its own compliance infrastructure in every country it operates in. An EOR handles compliance on your behalf, monitoring local labor laws, processing tax filings, and administering benefits through its existing legal entities. Learn how entity setup compares to EOR services.

A Common Law Employer must have a registered legal entity in each country where it hires. An EOR removes this requirement by employing workers through its own entities, allowing companies to hire internationally without local incorporation. Read more about hiring without a legal entity.

Hiring through a Common Law Employer in a new country requires setting up a legal entity first, which can take weeks to months depending on the jurisdiction. An EOR can typically onboard employees within days because its infrastructure is already in place.

Most EOR providers use one of two models: a flat monthly fee per employee (regardless of salary) or a percentage-of-salary model (typically 8 to 20% of the employee's gross pay). Some providers offer tiered or custom pricing for larger teams. See our detailed explanation of EOR pricing.

Flat monthly EOR fees generally range from $300 to $1,000 per employee, depending on the provider (despite very low sticker prices), the country of employment, and the scope of services included. Providers with owned entities and dedicated local support tend to sit at the higher end of this range. Compare fee ranges in our EOR cost guide.

Tiered and custom pricing are typically offered to companies hiring larger teams or operating across many countries. Providers may offer volume discounts, bundled services, or negotiated rates based on headcount, contract length, or the complexity of the jurisdictions involved. Read about pricing model options in our cost guide.

Western Europe and North America typically carry higher EOR fees due to complex labor laws and high social contributions. Latin America and Southeast Asia are generally more affordable. Total cost also reflects local employer tax obligations and mandatory benefits. Compare costs across regions: United Kingdom, India, Mexico.

Beyond the monthly service fee, total EOR costs include the employee's gross salary, employer-mandated taxes and social contributions, statutory benefits, and potentially currency conversion fees. Some providers also charge for contract amendments or mid-cycle changes. See a full cost breakdown in our EOR pricing guide.

Some EOR providers charge a one-time onboarding or setup fee, typically ranging from $200 to $500 per employee. However, many providers, including Borderless AI, have almost entirely eliminated these fees, with no upfront costs or deposits required to get started.

Termination fees vary by provider and country. They may cover statutory severance calculations, notice period administration, and offboarding compliance. Some providers bundle termination support into their monthly fee while others charge separately. Always ask about offboarding costs before signing a contract.

Switching typically involves transferring employee contracts, payroll data, and benefits administration from your current provider to the new one. The outgoing provider handles offboarding while the new provider onboards employees under its own legal entities. Read our guide to switching EOR providers.

Migration timelines depend on the number of employees and countries involved, but most transitions are completed within a few weeks. Your dedicated support contact manages the process end to end, coordinating with your outgoing provider to minimize gaps in coverage. Learn more about switching to Borderless AI.

The goal is zero disruption. Borderless AI coordinates onboarding to overlap with your outgoing provider's offboarding, ensuring continuity of payroll, benefits, and contracts. Employees receive hands-on support from our team throughout the transition. See how we handle provider migrations.

Borderless AI is the highest-rated EOR platform on G2, with owned entities in 170+ countries, a dedicated single point of contact for every client, 5-day payroll processing, deep local compliance expertise, and no salary deposits. See detailed comparisons with specific providers.