Global Employer of Record Comparison: Choosing the Right Partner in 2025
Hiring across borders is becoming more common as companies expand into new markets and build distributed teams. However, employing people in countries where a business has no legal presence introduces legal, tax, and compliance responsibilities.
A global Employer of Record (EOR) is a service that helps companies manage these responsibilities. It enables organizations to hire international employees without setting up a local entity in each country.
This article explains what a global EOR is, how it works, and what to consider when comparing providers in 2025.
What Is a Global Employer of Record
A global Employer of Record (EOR) is a third-party service that legally employs workers on behalf of a company in countries where that company does not have a legal entity. The EOR becomes the legal employer on paper, while the company directs the employee's day-to-day work.
The EOR handles all the legal parts of employment, including contracts, payroll, taxes, and making sure everything follows local labour laws. This arrangement lets companies hire internationally without creating their own foreign subsidiaries.
Global EORs are sometimes called international employers of record or GEORs. Companies use them to:
Enter new markets quickly: Hire talent without waiting months for entity setup
Reduce compliance risks: Avoid penalties from misunderstanding local laws
Control costs: Eliminate the expense of setting up and maintaining foreign entities
Key Services Every EOR Should Provide
Not all global employers of record offer the same level of service. When comparing providers, look for these essential services:
Payroll and Compliance
A good EOR manages international payroll by calculating wages, applying the correct tax rates, and ensuring payments arrive on time in the appropriate currency.
Tax withholding: The EOR deducts the right amount of income tax based on local laws
Social contributions: They handle mandatory payments to social security, healthcare, and pension systems
Reporting: They create and file all required tax documents with local authorities
Benefits Administration
EORs manage employee benefits by enrolling workers in required programs and offering additional options based on market standards.
They ensure employees receive mandatory benefits like public healthcare or statutory leave. Many EORs also provide access to supplementary benefits like private insurance, retirement plans, or wellness programs that match local expectations.
Legal Documentation
EORs create compliant employment contracts that follow local labour laws. This includes:
Employment agreements with required local clauses
Work permits and visa sponsorship (where applicable)
Proper termination documentation that follows local requirements
HR Support
EORs provide ongoing support for HR matters throughout the employment relationship. This includes:
Handling workplace issues according to local regulations
Updating policies when laws change
Supporting performance management processes
Managing terminations in a legally compliant way
EOR vs PEO: Understanding the Difference
Many people confuse Employers of Record (EORs) with Professional Employer Organizations (PEOs). While they sound similar, they work differently:
EOR: Becomes the legal employer of record in countries where you don't have an entity
PEO: Creates a co-employment relationship but requires you to have your own legal entity
A global EOR is ideal when you want to hire in a country where you don't have a business entity. The EOR handles all employment responsibilities, while you manage the employee's work.
A PEO works best when you already have a legal entity but want help with HR functions. You and the PEO share employer responsibilities.
For companies testing new markets or hiring just a few people in a country, an EOR is usually more practical. For larger, established teams, setting up an entity and using a PEO might make more sense long-term.
How to Compare Global EOR Providers
When evaluating global employers of record, consider these key factors:
Geographic Coverage
EORs differ in where they can legally employ workers. Some cover many countries, while others focus on specific regions.
Look for:
Country availability: Does the EOR support all locations where you plan to hire?
Entity structure: Does the EOR own its local entities or work through partners?
Local expertise: How deep is their knowledge of each market's laws and practices?
Technology Platform
Modern EORs offer technology platforms that streamline employment processes. The best platforms include:
Employee onboarding tools: Digital contract signing and document collection
Self-service portals: Where employees can access pay information and request time off
Reporting dashboards: That show real-time data on your global workforce
Integration capabilities: That connect with your existing HR systems
Service Level and Support
Consider how the EOR delivers its services and supports your team:
Response times: How quickly they answer questions or resolve issues
Support hours: Whether they offer help across multiple time zones
Implementation speed: How long it takes to onboard a new employee
Account management: Whether you have a dedicated contact person
Compliance Expertise
EORs must stay current with employment laws in every country where they operate:
Legal team: Do they have in-house experts or rely on external advisors?
Compliance updates: How they monitor and adapt to changing regulations
Risk management: Their approach to preventing compliance issues
Track record: Their history of successfully navigating complex regulations
Pricing Models and What to Watch For
Global EORs use different pricing structures. Understanding these models helps you compare costs accurately:
Common Pricing Approaches
Most EORs use one of these pricing models:
Percentage-based: A percentage of the employee's salary (typically 8-15%)
Flat fee: A fixed monthly amount per employee (usually $500-1,500 CAD)
Hybrid model: A base fee plus variable costs for additional services
Hidden Costs to Consider
Beyond the basic fee, watch for these potential extra charges:
Setup fees: One-time costs to begin service
Currency conversion: Fees for exchanging money between currencies
Off-cycle payments: Charges for payments outside the regular schedule
Termination fees: Costs associated with ending employment
Pre-Funding Requirements
Some EORs require you to deposit funds in advance to cover payroll and taxes. This can affect your cash flow:
Deposit amounts: How much money you need to provide upfront
Funding timeline: When you need to transfer funds before payroll
Refund policies: How unused funds are returned if an employee leaves
Look for EORs that offer post-payment models, where you pay after payroll is processed. This approach improves your cash flow and reduces financial risk.
Top Factors for Choosing the Best EOR
When selecting a global employer of record, prioritize these key factors:
Scalability and Flexibility
The best EORs grow with your business and adapt to changing needs:
Contract flexibility: Ability to add or remove employees without penalties
Country expansion: Ease of hiring in new locations as you grow
Service customization: Options to adjust services based on your requirements
Exit options: Support if you later decide to set up your own entity
Data Security and Privacy
EORs handle sensitive employee information, making security essential:
Data protection: How they secure personal and financial information
Privacy compliance: Adherence to regulations like GDPR
Access controls: Who can view employee data and how it's protected
Breach protocols: Their plan for responding to security incidents
Intellectual Property Protection
When hiring internationally, protecting your company's intellectual property matters:
IP clauses: Standard language in employment contracts that protects your IP
Non-compete options: Availability of enforceable non-compete agreements
Confidentiality terms: How employee confidentiality is maintained
Legal enforcement: Their approach to addressing IP violations
Future Trends in Global EOR Services
The global EOR industry is evolving with new technologies and approaches:
AI-Enabled Compliance
Artificial intelligence is transforming how EORs manage compliance:
Automated monitoring: AI systems that track regulatory changes across countries
Smart contracts: Employment agreements that update automatically when laws change
Compliance verification: Automated checks that identify potential issues before they become problems
Real-Time Payments
Traditional international payroll can be slow, but modern EORs are introducing faster options:
Instant transfers: Same-day payment processing in many countries
Digital wallets: Alternative payment methods beyond traditional banking
Payment tracking: Real-time visibility into where money is in the payment process
Mobile-First Employee Experience
As workforces become more distributed, EORs are creating better mobile experiences:
Mobile apps: Platforms that let employees manage their information from smartphones
Digital onboarding: Paperless processes that can be completed from anywhere
Remote support: Multi-channel assistance for employees in different time zones
Choosing the Right Global EOR Partner
Selecting a global employer of record is an important decision that affects your international hiring strategy. The right partner helps you navigate complex employment laws while providing a good experience for your international team members.
When comparing providers, look beyond price to evaluate their geographic coverage, technology platform, compliance expertise, and service quality. Consider how well they match your specific needs and growth plans.
Borderless AI offers a comprehensive global employer of record solution that addresses these key considerations. With coverage in over 170 countries, an AI-native platform, and a focus on compliance and employee experience, Borderless AI helps companies hire internationally without the complexity of setting up foreign entities.
To explore how Borderless AI can support your international hiring strategy, book a demo to see the platform in action.
FAQs About Global EOR
What is the difference between a global employer of record and a professional employer organization?
A global employer of record becomes the legal employer in countries where you don't have an entity, handling all employment responsibilities. A professional employer organization creates a co-employment relationship but requires you to have your own legal entity in the country.
How much does a global employer of record service typically cost?
Global employer of record services typically charge either 8-15% of employee salary or a flat monthly fee of $500-1,500 CAD per employee, with pricing varying based on country, service level, and employee count.
Can a company transition from using an employer of record to establishing its own entity?
Yes, companies can start with an employer of record and later establish their own legal entity when they reach sufficient scale in a market, with most EORs providing transition support during this process.
How quickly can a global employer of record onboard new international employees?
Most global employers of record can onboard new international employees within 1-2 weeks, though timelines vary by country, with some markets allowing same-day onboarding while others require 3-4 weeks due to local regulations.
Do global employers of record handle contractor management as well as employment?
Many global employers of record also manage independent contractors by providing classification guidance, compliant contracts, and payment processing services that follow local regulations for self-employed workers.
