How much does an Employer of Record really cost?

Hiring internationally is exciting, but managing compliance requirements and payroll for international employees? Not so much. That's where an Employer of Record (EOR) steps in. But how much does it really cost to use an EOR?

This article breaks down the true cost of using an Employer of Record, based on insights from Colby Clark, VP of Employer of Record at Airswift, and his team.

We’ll also discuss the legal compliance, additional costs, and pricing structure that come with hiring talent in foreign countries, as well as the legal employer responsibilities that need to be managed.

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What's an Employer of Record?

An Employer of Record is a company that legally employs workers on behalf of another business. While you manage the employee’s day-to-day work and performance, the EOR handles all formal employment responsibilities, like payroll, tax compliance, benefits administration, and employment contracts.

In short, an EOR allows companies to hire talent in foreign countries without a legal entity, bypassing the complexity and cost of setting one up.

It helps businesses navigate compliance issues, administrative tasks, and labour laws while avoiding unexpected costs and administrative burdens.

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Five factors that influence Employer of Record pricing

Employer of Record pricing isn't one-size-fits-all. The total cost depends on various factors related to the complexity of the employment situation, the services provided, and the countries involved. Here's what typically impacts the price.

1. Country of employment

We must consider the full package of services included, but the country of employment is crucial; the complexity can vary so much between countries.

Compliance risks, tax burdens, and statutory benefits vary by country, and so do the costs to manage them. Countries with complex labour laws or limited local infrastructure may require additional effort or third-party support, which increases cost..

2. Number of employees

The size of the workforce matters. Larger teams may benefit from volume-based pricing, while smaller, specialised teams might incur higher per-head fees.

3. Employee seniority and benefits involved

Senior-level employees typically necessitate more comprehensive benefit packages, which can elevate the overall employment costs, even if the EOR fee remains unchanged. Enhanced benefits, particularly healthcare-related, are likely to raise expenses.

4. Relocation requirements

It’s as small as a visa application all the way up to moving your family and taking care of the entire relocation process. Ivory Coast might be $1,000 to move a family there, but downtown London could run $50,000.

EORs can also support international relocation, and these services vary dramatically in cost depending on complexity and country. But it’s good to remember that relocation costs are custom-quoted and in most cases, billed separately from the core EOR fee.

5. Range of the service scope and customisation

Some providers impose additional charges for extras, whereas bespoke EOR providers generally adopt a transparent, all-inclusive pricing model. This results in fewer unexpected expenses — and greater predictability for your finance team.

Why are some EOR providers so expensive?

Premium EOR providers typically charge more because they offer end-to-end, high-touch support. This includes faster onboarding, in-country legal expertise, customised benefits packages, and a dedicated account manager.

These providers often have deep infrastructure in multiple countries, which means they can handle more complex employment scenarios without relying on third parties, but that expertise and responsiveness come at a price. For that, it is essential to compare EOR providers before making the final decision.

Add-ons that can also raise prices are:

• 24/7 global support
• Speed of setup
• Personalised compliance strategies
• Built-in legal guidance for contracts and risk mitigation

What factors drive down EOR prices?

Lower-cost EORs often operate on a lean or limited-service model. While they appear budget-friendly upfront, the low price excludes essential services like benefits administration, employee support, or country-specific legal advice, which can make a huge difference for the client.

Many rely on third-party partners or automated platforms, which can reduce costs but also increase risk or reduce flexibility. Before hiring an EOR, it is important to be aware of the differences each provider can bring to the table.

Other reasons for lower pricing can include:

• Outsourced local partners (outsourcing adds risk if not managed well)
• Limited customisation or templated contracts
• Hidden fees for add-ons like terminations or contract changes
• Minimal in-country presence, which could delay issue resolution

Hidden costs to watch out for

When working with EOR providers, hidden costs can arise, including:

• Surprise taxes or missed statutory contributions: Inaccurate tax filings or missed payments can lead to penalties, increasing your total cost.

• Excluded benefits that later need adding: Some providers may not include all necessary benefits upfront, requiring additional costs for healthcare, insurance, or other employee perks later on.

• Non-transparent contracts: Unclear agreements can lead to unexpected costs as services expand beyond the original scope, especially when dealing with custom requirements or urgent needs.

Trustworthy EOR providers reduce the risk of hidden fees, surprise charges, and unclear contract terms through clear service bundles and transparent pricing.

What's covered in an EOR service package

EOR providers range widely in pricing and in what that price includes. Higher-end providers typically offer fully managed, all-inclusive solutions that help reduce risk, ensure compliance, and streamline hiring processes.

Here’s what a high-tier EOR service often includes:

• End-to-end employment support, from onboarding to offboarding
• Deep local compliance expertise across 60+ countries
• Customisable benefits to meet market standards and employee expectations
• Fast setup and ongoing support, even in complex regions
• Relocation and immigration support with hands-on guidance

Transparent, bundled pricing from these providers gives clients clarity over costs and coverage—making financial forecasting easier and ensuring HR teams deliver a smooth experience. If predictability, compliance, and scalability matter to your business, a premium EOR service may offer stronger long-term value than a low-cost alternative.

Employer of Record pricing model

Not all EOR pricing is created equal. While low-cost options may cover the basics, premium EOR providers typically include more comprehensive support, better compliance safeguards, and greater flexibility—key factors for businesses looking for long-term value.

Here’s a general guide to what you can expect:

• Standard support package: $1,100–$1,500 per employee/month
  Includes core employment services such as onboarding, payroll, and compliance oversight.

• Executive or relocation package: $2,000+ per employee/month
  Designed for senior-level hires or international relocations. Typically includes visa support, tailored benefits, and hands-on management.

• Large teams (10+ employees): Discounts may be available depending on headcount and hiring country.

Higher-tier providers also tend to offer clearer pricing structures, with bundled services that help avoid hidden fees or unexpected costs. If you're unsure which package fits your business, it's worth speaking with an EOR specialist to walk through the differences.

Here’s a breakdown of a typical EOR package:

1. 35% – Payroll + Taxes: This includes processing salaries, managing deductions, handling tax filings, and ensuring compliance with local tax laws.
2. 20% – Benefits: Covers employee benefits such as health insurance, retirement plans, paid leave, and other perks based on local regulations and market standards. If your company offers add-ons or a different scope of benefits, this percentage can be increased.
3. 15% – Admin & HR support: Encompasses everything from onboarding to offboarding, including contract management, employee records, and other administrative tasks that help manage your workforce efficiently.
4. 15% – Risk & compliance: Includes ensuring that your business stays compliant with local labour laws, managing statutory requirements, and providing legal support to mitigate risks.
5. 15% – Service management & Client support: Covers the ongoing relationship management with clients, including dedicated account managers, support teams, and regular updates on employee status, performance, and compliance.

Employer of Record FAQ

Is there a setup fee?

Many EOR providers charge a one-time setup fee. In some cases, larger providers include this fee within their service packages. It’s important to confirm whether setup costs are clearly outlined to avoid unexpected charges.

Do EOR providers offer volume discounts?

Yes, many EOR providers offer volume-based pricing. Hiring more employees often opens the door for more flexible rates, especially when scaling across multiple locations.

Are relocation costs included?

Relocation costs are typically billed separately. Simple visa support may be low-cost, but full relocation packages—including housing, schooling, and immigration services—can vary widely depending on the country and complexity.

Which countries do EOR providers typically cover?

Most global EOR providers operate in 50+ countries, covering regions like Europe, the Americas, APAC, the Middle East, and Africa. Coverage varies, so it’s worth checking whether the provider supports local payroll, compliance, and benefits administration in your target countries.

What benefits are usually included?

Standard EOR offerings include health insurance, paid leave, and retirement contributions. These benefits can often be customised to meet local statutory requirements and employee expectations.

Which regions are more complex to operate in?

Countries with frequently changing labour laws—such as those in Latin America, Africa, and parts of Asia—can be more difficult to navigate. A knowledgeable EOR provider can help reduce risk and maintain compliance in these markets.

Is an Employer of Record right for your business?

When expanding globally, the cost of hiring through an Employer of Record (EOR) depends on several factors—such as the country of employment, required benefits, compliance risks, and any relocation needs.

What remains consistent with reputable EOR providers is a focus on transparency, predictable pricing, and end-to-end support. Rather than dealing with hidden fees or fragmented services, businesses can expect a full-service model that simplifies international hiring and ensures compliance throughout the entire employee lifecycle—from onboarding to offboarding.

If you’re considering an EOR and want to understand the cost for your project, our team is ready to provide a clear, tailored breakdown based on your specific needs. Get in touch with Airswift’s EOR experts today.