How Much Does
an Employer of Record Cost:
EOR Pricing Guide 2025

Any business can benefit from partnering with an employer of record. It relieves the burden of daily HR tasks, enables international hiring without the need to establish a legal entity in every target market, and handles administrative and financial tasks, from payroll to taxation. Yet, the EOR pricing models may seem overwhelming and overly complex at first glance.

A quick search will give you a figure that roughly ranges from $150 to $599 per month, with some providers charging $1,000+ per employee per month. How is this price determined, and what factors does it depend on?

This article offers a user-friendly introduction to the employer of record service cost to help you set the budget for this aspect of business process optimization.

Understanding Employer of Record Pricing Models

Striking a mutually beneficial deal with an employer of record requires a nuanced understanding of EOR pricing models on your part. As a rule, the EOR pricing depends on the following factors:

• Country of residence. The location of your target employees’ residence matters much in terms of employer of record cost. People living in developed countries usually experience higher living expenses and have higher taxes. Recruitment in these jurisdictions also comes with greater legal complexity, thus increasing the service’s price.
• The number of employees you need. If you need a couple of staff only, the employer of record cost may be higher. Yet, many providers offer discounts for bulk employment and can give you a better price for a larger team.
• Additional services. The range of services you need from your provider also determines the final price you pay. If you need to include custom employee benefits, work visas, and software/hardware provisions in the service package, all these add-ons will need to be paid separately.

Besides, the final employer of record cost is compiled of the service categories you want to delegate to the hired provider. As a rule, these aspects include:

• Employee salaries. Since your partnering EOR pays the full official salary to your staff, it takes into account all the taxes and transfer expenses involved in payroll. These agencies can find skilled and competitive staff for your business needs only if they offer reasonable salaries in line with local standards.
• Employee benefits. Every employee’s compensation package needs to include benefits, such as health insurance, retirement provisions, paid leave, social security expenditures, etc. These benefits are also compensated from the client’s pocket.
• Compliance and legal expenses. EOR performs compliant recruitment based on your recruitment needs in every jurisdiction. This way, the provider has to cover the expenses for concluding official employment contracts and tax withholdings for every employee. It also manages the legal side of guaranteeing legally compliant working conditions.
• Administrative and operational tasks. These agencies are often contacted for the sake of day-to-day management tasks. These activities may cover payroll, time tracking, payroll, and the like.
• Technology and infrastructure investments. If your EOR uses an HR and employee management platform for staff activity tracking, you may also need to pay for the subscription expenses for your team. Such tech innovations give you a single point of control over all employee operations, thus simplifying task tracking and communication with the responsible staff.

With these factors and components of EOR pricing in mind, you can now navigate the complex structure of EOR pricing models and approaches.

Fixed Pricing vs. Percentage of Employee Models

The simplest and most convenient of all employer of record pricing models is the flat rate for every hired employee. The EOR pricing per employee differs widely, with some companies charging a modest $50 fee and others requiring $2,000+ per employee. The estimate is made up of the agency’s reputation, location, and breadth of included services.

Businesses prefer this arrangement to other employer of record pricing options because this one is more predictable and transparent. By setting a flat rate for every hired employee, the client can budget accordingly and scale teams up and down depending on their budget. EORs also find this approach beneficial because they avoid nuanced price calculations with every client and can simplify the contract negotiation routines.

We at GEOR also use a tiered approach to the fixed pricing model, allowing our clients to choose the scope of services they need us to cover. At present, three tiers are available:

Basic – $499 per employee. It covers employee payroll only and enables businesses to pay their remote employees in a variety of jurisdictions.

Advanced – $1,380 per employee. This tier covers the employee’s recruitment and payroll management. This way, clients can enjoy end-to-end service coverage by expert HR recruiters of GEOR without spending time and resources on staff screening and employment.

Pro – $1,870 per employee. This is the highest tier of EOR service that enables businesses to delegate the entire spectrum of HR and administrative tasks to GEOR executives. We handle payroll, recruitment, and talent management and assume full responsibility for your staff, from onboarding to daily HR tasks.

Percentage of Employee Payroll Model

Rates for staff hiring and management can differ widely across states and industries, which sometimes makes the flat rate non-suitable for the calculation of employer of record pricing. Unskilled, low-pay employees and senior-level tech experts earn very different salaries, and the process of hiring and managing them involves different resources and HR competencies. Besides, low-pay employees may be too costly for the client based on the flat rate.

That’s why some providers prefer to peg their EOR pricing models to the hired employees’ gross salaries. The fee usually ranges from 10% to around 25%, depending on the niche and the personal arrangement with the client. This arrangement is more beneficial for companies hiring part-time or low-pay staff, with a flat rate often equalling more than 25% of the employee’s gross salary. This approach to employer of record pricing may also be beneficial for EORs that want to peg their remuneration to the complexity of recruitment and managing advanced-level employees.

Understanding Custom Pricing for EOR Services

Besides the employer of record pricing models discussed above, you can negotiate a custom approach to price-setting with the chosen provider. This arrangement makes sense if the client comes with a non-standard inquiry and has a complex set of hiring requirements that don’t match the standard package.

Custom estimation is more flexible on the provider’s part because it enables the service provider to factor in the complex labor laws and taxes in multiple hiring locations, thus making the contract financially viable. Yet, arriving at a custom contract is a lengthy process with lots of negotiations. Therefore, the parties should engage in it if they are both sure that it’s the only option for arriving at a financially viable and mutually satisfying employer of record pricing strategy.

What Influences the Cost of an EOR?

All participants of the market agree that the calculation of EOR costs is pretty complex. We’ve already covered the major elements factored in this sector’s price-setting models, and here are a couple of additional fee categories you should also consider.

The Impact of Compliance on EOR Pricing

The key goal of paying for EOR services is to secure your legal presence in the target labor market. This means that the provider completes all hiring procedures in line with the local labor laws and regulations. These arrangements vary widely across jurisdictions, so the cost of your EOR service will heavily depend on the procedural complexity of hiring your staff in the target jurisdiction.

EOR Security Deposit

It is also important to discuss the sum of the security deposit that doesn’t actually affect the employer of record pricing but still shapes your upfront costs of establishing a partnership with an EOR entity. Rules and preferences for the sum of the security deposit vary across businesses, and you should find out how much your prospective EOR provider wants to secure for emergencies. At times, startups may find it hard to reserve a lump sum of money, such as, for instance, a 2-month percentage of hired staff’s salaries, to cover the cost of initiating the EOR partnership.

Hidden and Extra Fees to Consider

Before you sign a contract with the chosen provider, you need to read the fine print in detail to see whether your partnership arrangement comes with any additional or hidden fees. These unexpected expenditures can turn your exciting new labor market entry into an unaffordable business challenge. So, you need to be 100% aware of all the costs your negotiated service range will come with.

Things that many business owners skip at the stage of choosing an EOR company are as follows:

• Currency exchange rates. This firm will pay salaries to your employees in various states and jurisdictions. They will need to exchange the main currency for local payroll, which may turn into an additional financial burden.
• Additional local insurance and taxes. While you may be more focused on hiring the right talent, the new employees’ local taxes and insurance requirements may be overlooked. This practice may significantly increase the EOR charges because the provider doesn’t assume responsibility for these expenses.
• Contract prolongation fees. Though it’s not always the case, some EOR providers set up a contract prolongation fee that has to be paid once a year. This means that you will have to reserve a separate sum of money apart from the monthly fees for every hired employee to secure the continuation of your partnership with the company on the negotiated terms. At times, such arrangements are put in place to give the EOR company flexibility to renegotiate the contract after one year of collaboration; thus, you should be ready for rising fees. A much better option for such cases is to fix the terms in the current contract and to discuss the stability of fees for contract prolongations in advance.

How Does EOR Cost Compare to Traditional Employment Models?

With all these complexities and nuances of EOR fee models discussed above, you might be considering alternative options, which is normal. Yet, a quick comparison between EOR arrangements and traditional in-house hiring can highlight the competitive benefits of choosing EOR, at least as a temporary solution. Here are the main implications of using EOR services compared to classical staffing approaches.

EOR vs. In-House Hiring: Cost Comparison

Here is a quick breakdown of expenditures you will have to cover when following an in-house hiring strategy compared to using EOR services.

Long-Term Financial Implications of Using an EOR

With these differences in mind, you may reap the following long-term financial benefits of using EOR services:

• Reduce overhead costs related to having a permanent in-house HR department.
• Avoid the costs and resource expenditures on payroll, HR routines, legal, and compliance tasks.
• Reduce expenditures on the office space in the countries of your factual presence as an employer.
• Reduce time-to-hire and maximize the accuracy and relevance of hiring decisions.
• Enjoy cost-effective scalability of core business processes.
• Take advantage of staffing flexibility for project-based, temporary, and short-term work arrangements.
• Avoid the burden of permanent staffing costs.