Employer of Record

Employer of Record (EOR) is a service where a third party legally employs workers on behalf of a client company. The EOR handles payroll, tax withholding, benefits and statutory compliance while the client controls daily tasks and performance management.

What is Employer of Record

An EOR becomes the legal employer for payroll and compliance purposes. It issues pay, manages deductions, and fulfils local employment obligations so the client can engage talent quickly across jurisdictions.

How does it work

Clients contract an EOR to hire and pay staff. The EOR registers employment locally, administers payroll and social contributions, and maintains required records. Operational control stays with the client.

Using an EOR reduces employer liability and speeds international hiring while maintaining local compliance.

Practical usage

Common HR scenarios include:

• Hiring contractors or employees in a new country without a local entity
• Managing payroll and tax compliance for remote workers
• Short term projects or market testing before setting up an office

Related HR concepts

Related terms include PEO, payroll outsourcing, global employment, contingent workforce management and tax compliance. These concepts overlap but differ in legal employer responsibilities.