Employer of Record (EOR) services typically cost between $200 and $650 monthly for each hired employee. This is a general estimate, as actual costs vary based on your company’s needs. You can better plan your budget for each new hire if you understand how much the employer of record costs. As companies go global, they need to know about these costs to plan their finances and pick the best way to hire people. Let’s examine the specifics of EOR pricing and the things that affect these prices.
Details of Expected Fees and Additional Costs
Knowing how the fees are usually structured is important before using an EOR service. Here is a breakdown of their pricing models:
| EOR Model | Costs | Benefits |
| Independent Contractor Solution | $29 per contractor per month | Seamless, compliant, global contractor management. |
| Professional Employer Organisation (PEO) | $100 to $200 per employee/month, plus country-specific costs | Support for payroll and benefits services globally. |
| Virtual Employer Organisation (VEO) | $450 per employee/month, plus a one-time registration fee | Virtual EOR-like support for highly regulated countries. |
| Full-Service Employer of Record (EOR) Solution | $200 to $600 per employee/month | Comprehensive global hiring and management support. |
| Custom Solutions | Support tailored to your company’s exact needs. | Custom monthly pricing |
You can see that the prices are very different based on the type of service you need. The least expensive solutions are those that use independent contractors. Full-service EOR solutions, on the other hand, offer more support at a higher cost.
Factors That Influence the Cost of EOR Service
The following are the main factors that influence the cost of an EOR:
1. EOR Setup
The EOR costs can have a big effect on your total EOR costs. There may be onboarding or implementation fees of $500 to $2,000 the first time you work with an EOR provider. These fees depend on how complicated your needs are and how many countries are involved.
Some providers don’t charge these fees if you sign a longer-term contract or a bigger account, but others include them in their monthly prices. Before signing an agreement, you should always understand what the setup process includes and how much it costs.
2. Refundable Security Deposit
Many ask for a security deposit when you start working with an EOR service. This deposit usually equals one to two months’ pay and benefits.
You can get this money back when your contract ends, as long as you’ve met all your responsibilities. The deposit gives the EOR a financial safety net so it can pay its employees even if there are problems with client transfers. Don’t forget to include this one-time expense in your budget, even though it’s not a real “cost.”
3. Employee’s Salary and Additional Liabilities
In addition to the base EOR service fee, you’ll also need to consider the cost of hiring someone. This includes the employee’s income and any required benefits, Social Security payments, or taxes due in the employee’s home country.
These costs are very different depending on where you live. For example, employer payments in France could be as high as 45% of salary, while they might only be 17% in Singapore. Before you hire them, a good EOR company will give you a clear breakdown of these prices for each country.
4. Supplementary Employee Benefits
You should offer benefits beyond the legal minimum requirements to attract and retain top talent. Your overall EOR costs increase when you get extra perks like extra health insurance, wellness programs, professional growth allowances, or retirement contributions. Even though these costs aren’t required, they’re becoming increasingly important in tight job markets. Some EOR companies offer standard benefits packages that may be less expensive than putting together these benefits individually.
5. EOR Service Fee
Your company will charge you an EOR service fee, which is the main cost. This fee usually ranges between $200 and $650 per employee monthly. This fee covers the EOR’s administrative work, such as managing contracts, handling payroll, ensuring rules are followed, and helping with HR issues.
Different providers charge different amounts for their services. Some charge a flat monthly fee for each employee, others charge a percentage of payroll (usually between 5 and 20%), and others have different prices for different numbers of workers. It’s essential to review what’s included in the base fee, as lower-priced providers may offer limited services.
6. Currency Exchange Fees
When you hire people from other countries, currency exchange is unavoidable in your EOR costs. There is usually a conversion fee and sometimes an unfavorable exchange rate every time money moves between currencies, whether you’re paying the EOR, covering staff salaries, or managing reimbursements.
These 1–3% transaction fees may seem small, but they can add up quickly with regular payments. While some EOR providers handle currencies better than banks and offer better rates as part of their platforms, others work with specialized forex services to keep these costs as low as possible.
Comparing EOR Costs to Traditional Employment Methods
| Aspect | EOR Solution | Own Legal Entity | Contractor Misclassification |
| Initial Costs | $0 upfront entity setup | $15,000-$50,000 upfront | $0 upfront (but high risk) |
| Monthly Costs | $200-$650 per employee | $5,000+ for compliance and operations | Lower costs |
| Setup Time | Days to weeks | Months | Days |
| Legal Risk | Minimal (managed by EOR) | Moderate (depends on your compliance team) | Very high (potential penalties in millions) |
| Best For | Companies with fewer than 15-20 employees per country | Companies with 15+ employees in one country | Not recommended due to legal risk |
| Leadership Time Investment | Minimal | Significant | Minimal until legal issues arise |
| Long-term Value | Higher cost but lower risk for small teams | More economical for larger teams | High risk outweighs any cost savings |
| Compliance Management | Handled by EOR experts | Requires in-house expertise or consultants | Non-compliant |
Hidden EOR Costs to Watch
Even though trustworthy EOR providers are clear about their charges, there may be other costs you need to be aware of. Some service providers charge extra costs, such as:
- Termination processing ($300-500 per employee)
- Background checks ($50-200 per candidate)
- Special payroll runs outside the normal schedule ($100-200 per occurrence)
- Annual tax document preparation ($50-100 per employee)
Always ask for a full list of fees, and ask about any possible extra costs not included in the standard service package. An EOR relationship that doesn’t come with surprises is the most cost-effective.
Conclusion
Businesses that want to hire remote workers from other countries or expand abroad need to know how much an Employer of Record costs. Base fees are usually between $200 and $650 per monthly employee. Still, the real cost varies depending on where the business is located, what benefits are offered, and what services are needed. By carefully examining these factors and choosing the right provider for your needs, you can find a good balance between cost, compliance, and employee experience.
HR Options offers EOR solutions that fit the needs and budget of companies to improve their hiring strategy while keeping costs low. Contact our experts for personalized consultations and specialized services!
