Employer of Record (EOR)

What is Employer of Record (EOR)?

An Employer of Record (EOR) is a third-party company that legally employs staff on a client's behalf in a country where the client has no local entity, handling local payroll, tax, and compliance.

An EOR solves a specific problem: hiring someone in a country where you are not registered as an employer, without setting up a local subsidiary. It is common for a first hire in a new market, or for one or two people somewhere you do not plan to build a large team.

It is a different problem from core HR. An EOR handles the legal employment relationship and local payroll compliance in one country at a time; core HR software manages records, leave, and compensation across a company's whole team, including people already employed directly. Companies sometimes run both - an EOR for a handful of cross-border hires, and an HR system for everyone.

Related terms

• Payroll
• Employment status (employment type)
• Core HR

See also

• HREvio vs Deel