How Much Does an EOR Cost?

Picture this: a founder gets excited about finally expanding globally. They start shopping around for an Employer of Record service. The main question they ask every provider? “What do you charge?”

Here’s the thing about that question. It’s like asking “How much does a car cost?” without mentioning whether you need basic transportation or a vehicle that can handle Arctic expeditions. The answer changes entirely based on what you actually need to accomplish.

Companies across every continent face this same puzzle when they start exploring EOR options. Some providers quote rock-bottom rates that sound incredible upfront. Others present comprehensive packages with higher price tags. The real story lives in the details that separate a true partnership from a bare-bones transaction.

Those tempting low base rates often come with a catch. Hidden fees appear when you need real support. Service gaps emerge right when you need help most. What looked like a bargain becomes an expensive lesson in why transparency matters more than the initial sticker price.

What is an EOR, and what does it cover?

An Employer of Record acts as the legal employer for your international team members while your day-to-day stays the sme. Think of it as having a local business partner in every country where you want to hire. They handle the legal framework so you can focus on building your team.

The magic happens through end-to-end services that most EORs bundle together. These providers become your behind-the-scenes operations team for everything employment-related in foreign markets.

Here’s what typically falls under an EOR’s umbrella:

• Employment contracts and onboarding. They draft legally compliant agreements that protect both you and your employee. Local employment laws get translated into clear agreements that make sense.
• Payroll and tax withholding. Monthly salaries get processed accurately with all the right deductions. Payroll tax obligations get handled automatically, so nobody ends up with surprise bills from foreign tax authorities.
• Benefits administration. Health insurance, retirement contributions, and mandatory local benefits get managed seamlessly. Your employees receive the coverage they expect without you navigating dozens of local insurance providers.
• Compliance with local labor laws. Employment regulations are monitored and applied correctly. When laws change, your EOR updates processes so you stay compliant without constant legal research.
• HR support and employee relations. Questions about leave policies, performance management, and workplace issues get addressed by local experts. Your team members have someone to turn to who understands both your company culture and local expectations.

Most EOR providers package these services under a single recurring monthly fee per employee. This bundled approach means you get predictable costs instead of surprise charges every time you need support. The question becomes whether that bundle includes everything you need to succeed.

Typical EOR cost structures

EOR providers have settled into three main pricing approaches over the years. Each provider has their own way of charging for international employment services based on what makes sense for different types of businesses.

Percentage of gross payroll

This approach ties EOR fees directly to what you pay your employees. Most providers charge between 10%to 15% of each employee’s total compensation. Some providers push this percentage higher to 18% to 25%, particularly for specialized services or complex markets.

The math works beautifully when you hire at consistent salary levels across multiple countries. Your EOR costs scale naturally with your payroll expenses. If you give someone a raise, your service fees increase proportionally.

The tricky part happens when compensation varies dramatically across your team. A senior developer earning $120,000 generates vastly different EOR fees than a customer service representative making $35,000. This model can become expensive quickly for high-salary positions while staying cost-effective for entry-level roles.

Flat monthly fee per employee

Fixed fees are the best option for budgeting. Most providers charge between $199-$800 per employee monthly, though premium services can reach $1,000-$2,000 depending on the country and service level. You know exactly what each international hire will cost before you make the offer.

This structure shines when you hire senior professionals or work in regions where flat fees beat percentage calculations. A $150,000 software architect in Germany might cost $599 monthly with a flat fee provider versus $1,875 monthly (at 15% of salary) with a percentage-based model.

The downside hits when you hire in lower-cost markets. Paying $599 monthly for a virtual assistant earning $800 a month in the Philippines makes the percentage model much more attractive.

Country-specific pricing

Some EOR providers adjust their fees based on local employment complexity rather than employee salaries. France might cost $800-$1,500 monthly per employee due to intricate labor laws and mandatory benefits. The Philippines might range from $250-$400 a month because of simpler regulatory requirements.

This approach recognizes that managing employment in Germany requires more legal expertise and compliance work than managing employment in India. The pricing is about the actual effort involved, not treating all countries equally.

Country-specific models work best for companies that understand their target markets and how to budget for them. Basically, you pay more for countries that are more difficult to operate in than the more straightforward ones.

What makes EOR cost more or less expensive?

Multiple variables affect what you’ll pay—from which countries you pick to how you set up your team. That’s why one provider might quote you $400 per month while another wants $1,200 for the exact same employee in the exact same country.

• Country of employment. Labor laws, tax complexity, and mandatory benefits vary dramatically between countries. Sweden costs significantly more than Singapore because of extensive government-mandated healthcare, parental leave, and pension requirements that add both administrative burden and actual benefit costs.
• Employee compensation level. In percentage-based models, higher salaries directly translate to higher EOR fees. A senior developer earning $120,000 annually costs $1,000 monthly at 10% while a customer service representative making $36,000 costs just $300 monthly using the same rate.
• Included versus optional services. Base packages often cover payroll and compliance, but benefits administration, visa support, and specialized HR services frequently cost extra. Some providers bundle comprehensive services while others charge separately for each add-on, creating vastly different total costs.
• Currency exchange handling and FX markups. International payroll requires currency conversion, and many EORs apply markups of 2% to10% above market exchange rates. This seemingly small percentage can add thousands annually when processing regular payroll for multiple employees.
• Number of employees or regions supported. The more people you hire, the less you pay per person—but spread your team across multiple countries and costs go up because there are more legal requirements and admin work to manage.

The overall cost evaluation of an EOR provider could also include factors like avoiding penalties, such as the case with contractor conversion and misclassifying workers. “These [penalties] can run from the tens of thousands to millions and are best avoided,” says Peter Dixon, Pebl’s Vice President of Europe, Middle-East, & Africa, in a LinkedIn post.

Why the cheapest EOR might cost you more in the long run

The cheapest option rarely stays cheap once real work begins. This lesson hits companies hard when they choose an EOR based solely on advertised rates. That $299 monthly fee suddenly becomes $600 when you need actual contract drafting, benefits setup, or tax filing support.

The best EOR providers lay out precisely what is included in their base fee versus what costs extra. Transparent providers might charge $499 monthly upfront, but include everything you actually need. Misleading providers quote $299 but then charge separately for onboarding, offboarding, contract amendments, and basic HR support.

Vague contracts create the perfect storm for budget surprises. Some EORs bury extra charges in confusing legal text, or they simply don’t bother mentioning what happens when you need to let someone go, change their benefits, or fix a contractor classification issue. You don’t find out about these costs until you’re dealing with the situation—not exactly when you want billing surprises.

The real calculation goes beyond simple monthly fees. Total cost of ownership includes the EOR fee, operational risk, plus employee satisfaction. A transparent provider might cost 20% more monthly but save thousands in avoided compliance mistakes and employee retention.

Consider what happens when an EOR cuts corners to offer rock-bottom pricing. Delayed payroll damages employee trust. Incomplete benefits administration creates legal exposure. Poor compliance support leads to government fines that dwarf any savings from choosing the cheapest option.

The companies that succeed with international hiring focus on value rather than the lowest advertised rate. They ask detailed questions about what gets included. They demand clarity about additional fees. They choose partners who view transparency as a competitive advantage rather than something to hide behind complex contracts.

How to figure out what you’ll really pay

Shopping for EOR services feels overwhelming when every provider claims to offer the best value. Marketing websites showcase impressive client logos and competitive rates, but the real decision comes down to asking the right questions. The companies that choose well focus on gathering specific information rather than accepting surface-level promises.

Smart buyers don’t just take the first pitch at face value. They ask questions, compare what’s actually included, and figure out what they’re really getting for their money. It’s the difference between finding a provider that truly delivers and getting stuck with one that looks good on paper but hides the important stuff in the fine print.

• Ask for itemized pricing. Request a detailed breakdown that shows base fees, additional service charges, and any potential extras. Many providers bundle services under vague descriptions like “full HR support” without explaining what that actually includes or excludes.
• Clarify what’s included in monthly fees. Push for specific details about contract drafting, benefits administration, tax filing, and employee support services. Some providers include comprehensive support, while others charge separately for each interaction with your employees.
• Consider long-term scalability, not just short-term affordability. Evaluate how costs change as your team grows across different countries and salary levels. A provider that works perfectly for five employees might become prohibitively expensive at fifty employees due to hidden scaling issues.
• Compare total value across providers, not just the numbers. Factor in compliance quality, employee experience, support responsiveness, and risk mitigation alongside pure cost. The cheapest option often becomes the most expensive when operational problems emerge.
• Test their transparency during the sales process. Providers who dodge pricing questions or provide vague answers likely hide costs elsewhere. The best EOR partners welcome detailed discussions about fees because they have nothing to conceal.
• Understand currency exchange policies. Ask specifically about FX markups, conversion timing, and how exchange rate fluctuations affect your costs. These seemingly minor details can add thousands annually to your international payroll expenses.

How Pebl does EOR pricing differently

Pebl built its EOR pricing around the transparency that most companies wish they could find elsewhere. The all-inclusive approach covers local compliance, comprehensive payroll processing, and complete onboarding support across 185+ countries without surprise charges or hidden extras. This straightforward pricing scales naturally with growing teams while maintaining the trust that comes from knowing precisely what you pay for and exactly what you get. Connect with Pebl to learn more.

This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided “as is,” and no representations are made that the content is error-free.

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