Expanding into new markets like the US, India or Canada is exciting.

At PamGro, we know how complex and costly international expansion can get when companies underestimate the true costs of setting up their own entities. From regulatory compliance to ongoing administrative burdens and expensive employee exit procedures, these challenges often result in unexpected stress and setbacks.

With deep expertise in global HR, payroll and compliance, PamGro helps businesses expand internationally with confidence. Our solutions are strategic and cost effective, so you can enter new markets smoothly and scale efficiently.

In this article we break down the financial realities of setting up your own entities versus partnering with a trusted Employer of Record like PamGro. An Employer of Record (EOR) simplifies this process by handling various administrative tasks related to human resources, such as payroll and benefits administration. Additionally, EOR services play a crucial role in ensuring compliance with local labor laws and regulations. But how much does EOR cost?

This guide goes into the various factors that affect employer of record costs, compares different pricing models and provides insights to help you choose an EOR that fits your budget and business needs.

The cost of using an Employer of Record (EOR) varies depending on the provider, the country of employment, the complexity of the employment arrangement, and the employee headcount. Generally, EOR pricing consists of basic fees and additional charges. On average, EOR costs start at $599 per month for standard services.

EOR fees are often calculated as a percentage of each employee’s salary, which means that higher salaries and increases in employee headcount can lead to greater administrative complexity and higher costs.

1. Flat Monthly Fee
   • Ranges from $200 to $2,000+ per employee per month, depending on the country and local labor law complexity.
   • Some providers offer more targeted ranges, such as $299 to $1,500 per employee.
2. Percentage of Payroll
   • Typically 5% to 25% of the employee’s gross salary.
   • Suitable for companies with variable or high compensation structures.

1. Setup Fees – One time charges from $500 to $2,000 or more for onboarding, contract drafting and compliance.
2. Offboarding Fees – One time termination fee to handle exit paperwork and compliance, often unspecified but similar to setup fees.
3. Refundable Security Deposit – Some EORs require a 1–3 month salary deposit per employee, refundable after contract termination.
4. Currency Exchange (FX) Fees – Typically 2% to 10% for converting funds into local currency.
5. Compliance & Legal Fees – Additional charges for complex legal or regulatory matters.
6. Benefits Administration – Varies depending on benefits offered and employee count.
7. Immigration & Visa Support – Often an add-on; costs vary by country and complexity.
8. Custom Services – Unique payroll schedules, specific tax handling or specialized HR requests incur extra fees.
9. VAT (Value Added Tax) – In applicable jurisdictions, service costs may be increased by VAT rates as per local laws.

Several factors contribute to EOR cost. Understanding these will help you anticipate expenses and choose the right provider for your needs. The total cost of employing global talent can vary greatly based on the number of employees so plan accordingly.

EOR cost varies greatly based on the country where the employee is located and the complexity of local employment laws. For example, employing workers in countries with complex labor laws or higher statutory benefits like the US is more expensive than in countries with simpler regulations like India.

In the US, EOR services can range from $1,000 to $2,000 per employee per month, whereas Employer of record cost in India is between $300 and $1,500 per employee per month. PamGro charges $99 per employee per month in India.

Legal compliance is crucial in different countries, as EOR services assume responsibility for managing the complexities of employment laws and regulations, ensuring businesses can safely employ global talent without risk of misclassification or non-compliance.

Note: These figures are estimates and can vary based on the EOR provider and specific employee circumstances.

Some EOR providers offer volume discounts for companies hiring multiple employees, which can help manage ongoing costs effectively. The more employees you onboard through the EOR, the lower the per-employee cost may be. However, employer of record pricing can vary based on the number of employees, affecting your overall budgeting and financial planning.

EORs offer different levels of service from basic payroll processing to comprehensive EOR solutions, including benefits administration, compliance management, and employee onboarding. The broader the scope of services, the higher the cost.

Employer of Record services can significantly impact overall costs by managing administrative responsibilities and ensuring compliance, which is crucial for companies employing international talent.

Employment contract terms directly impact EOR costs, as different types of contracts can influence the pricing structure. Employee salary and benefits package directly impacts EOR cost. Higher salaries mean higher employer contributions to taxes and benefits, increasing the overall cost.

Additionally, changes in an employee’s salary, such as raises or new hires, can further impact overall budgeting and workforce growth.

Many EORs charge one-time setup fees per employee ranging from $500 to $2,000 for contract creation, onboarding, payroll setup, and other setup costs. Termination fees may also apply depending on local labor laws and EOR agreement. Additionally, businesses should be aware of the fixed monthly fee typically charged per employee, which provides clarity on ongoing costs.

If you are paying employees in different currencies, EORs may charge additional fees for currency conversion, international payment processing, and tax filing as part of their financial responsibilities.

Additionally, tax filings are crucial for ensuring compliance with local regulations, making them an integral part of the overall employment and payroll process.

Let’s examine the starting prices per employee per month for some of the leading EOR providers:

Employer of Record (EOR) providers usually offer a few different pricing models, each with its own pros, cons and suitability based on company size, payroll complexity and market expansion plans. These pricing structures include flat fees, where a consistent monthly rate per employee is charged regardless of salary, percentage of salary and custom pricing models.

Understanding these models is key to choosing a cost-effective and scalable EOR solution. EOR services charge can vary significantly based on whether they employ a flat fee per employee or a percentage of employee salary, impacting budgeting and financial planning.

• How it works: A flat fee is charged per employee each month, regardless of their salary or compensation changes. This pricing model often includes a fixed monthly fee, providing clarity on what potential clients can expect to pay for such services.
• Typical Range: Starts at $299 and can go up to $1,500+ per employee per month, with many providers offering pricing between $599 and $1,000.
• Best for: Companies with smaller or frequently changing workforces that need predictable, transparent pricing.
• Benefits:
  • Easier budget forecasting.
  • Simplified headcount expansion.
  • Less impact from employee salary changes.

The Percentage of Payroll pricing model involves the Employer of Record (EOR) charging a fee based on a percentage of each employee’s salary, typically ranging from 10% to 25%. This model is often attractive to companies with relatively stable, lower payroll costs or minimal variable compensation, as the initial costs can seem manageable.

However, one major drawback is that costs increase proportionally with any changes in employee compensation—such as salary raises, bonuses or promotions. As your team grows or compensation packages evolve, the EOR fees can rise significantly, making this model less predictable and potentially more expensive over time.

Moreover, it may open the door to hidden or unexpected costs which can affect long-term budgeting and scalability. Additionally, eor services charge can vary, with some charging a flat fee per employee and others charging a percentage of payroll, impacting financial planning and workforce growth.

• How it works: Tailored pricing based on the company’s specific requirements, such as custom payroll cycles, compliance needs or unique service bundles.
• Best for: Enterprises with specialized HR requirements or large, complex teams.
• Benefits:
  • Highly flexible and scalable.
  • Avoids paying for unneeded services.
• Considerations:
  • Pricing can be opaque.
  • Difficult to forecast long-term expenses accurately.
  • May require negotiation and fine print review.

Determine how many employees you’ll hire, where they’ll be located, and what level of support you need to hire employees effectively. This will help you find EORs that serve your target markets and offer the services you need.

International hiring is crucial when choosing an EOR, as it allows organizations to legally employ staff in foreign locations, streamlining global employment processes.

Research multiple EOR providers, compare their pricing models, services and customer reviews. Tools like PamGro’s EOR cost comparison can help you.

Contact shortlisted EORs and ask for customized quotes based on your specific needs. Make sure the quotes include all potential fees, such as setup, termination and currency conversion charges.

Ensure the EOR has expertise in local labor laws and can provide robust legal compliance support. Also assess their customer service and HR support services. Understanding and navigating local employment laws is crucial for ensuring compliance and avoiding potential legal issues.

Choose an EOR that can scale with your business, growing into new markets and increasing employee counts without significant cost increases.

PamGro is a modern Employer of Record (EOR) solution designed to simplify and optimize contractor management across global markets. Just as businesses need cost-effective, compliant and easy-to-use global workforce solutions, PamGro delivers all this—and more—at industry leading prices.

PamGro is highly competitive pricing starting at $29 per contractor per month—much lower than many EOR providers in the market. And unlike others that charge onboarding and offboarding fees, PamGro has zero extra charges for starting or ending a contractor engagement, so you know exactly what you’ll pay from day one.

PamGro’s platform is designed to support contractor onboarding, global payroll and timesheet management, so it’s easy for HR teams and talent to use. From automated payments to localized contracts, everything is centralized and accessible in one place, reducing admin burden and ensuring accuracy.With 14 self-owned legal entities and presence in over 150 countries, PamGro is able to help businesses expand into new markets without the complexity of setting up local entities. This in-country presence allows PamGro to navigate local labor laws and regulations effectively, so you can be sure your workforce is handled compliantly and professionally.

PamGro is committed to being fully compliant with all local labor, tax and employment regulations, so you can avoid misclassification or non-compliance penalties. You can rely on PamGro to manage employment complexities across multiple regions.

Whether you’re a fast-growing startup or an established business entering new international markets, PamGro’s EOR services is a scalable, hassle-free solution for global contractor management.

📈 Case Study: How an IT Company Reduces Hiring Costs 25% Using PamGro

In conclusion, EOR pricing is a critical aspect of global hiring, and businesses must carefully consider the costs involved. EOR services can provide a cost-effective solution for hiring international employees, but it’s essential to understand the pricing models and potential additional costs. By choosing the right EOR service provider and considering factors such as local labor laws, employee benefits, and compliance requirements, businesses can ensure a smooth and successful global hiring process.

EOR pricing models, including flat monthly fees and percentage-based fees, can provide predictable costs and transparent pricing, making it easier for businesses to budget and plan. Ultimately, the key to successful EOR pricing is to find a provider that offers competitive pricing, ensures compliance with local regulations, and provides excellent service and support. By doing so, businesses can minimize risks, reduce administrative burdens, and focus on growing their global workforce.

1. Why do Employer of Record (EOR) services seem so expensive?

   EOR services may seem costly because they take on significant legal responsibility across multiple jurisdictions. Managing global employment involves navigating complex labor laws, tax compliance, and administrative tasks in each country. EORs absorb this burden so businesses can remain compliant and risk free—making their expertise and liability coverage part of the service value.

   Additionally, the EOR acts as the legal employer for workers it hires, handling essential functions like compliance with local laws, payroll, and administrative tasks, thus managing costs effectively.

2. Can I switch to a different EOR later?Yes, you can switch to another EOR if needed. But make sure to review your current provider’s terms, including any notice period or exit fees, and plan the transition carefully to avoid disruptions to your employees.
3. What are the risks of using an EOR?While EORs reduce many risks, working with a less experienced provider can still lead to issues like compliance errors, data handling concerns or service lapses. Choose a reliable and compliant EOR like PamGro to minimize these risks.
4. How long does onboarding take through an EOR?Onboarding times vary by country but typically takes a few business days to a couple of weeks depending on the legal and documentation requirements involved.
5. Can an EOR manage employee exits?Yes. A core function of EORs is to handle employee terminations and manage employment contracts according to local labor laws so you’re compliant and protected from potential liabilities. Employment agreements are also crucial in the exit process, ensuring that all terms are met and compliance is maintained.
6. Can I move employees from EOR to my own entity later on?Yes. Once you have a legal presence in a country, you can transition employees from the EOR to your own entity—following local compliance requirements.
7. Do EORs offer employee benefits?Yes, EORs administer compliant benefits like health insurance, pension plans and more according to local laws and market standards.
8. Who is the official employer—me or the EOR?Legally the EOR is the employer of record. But employees report to and work under your direction, effectively part of your internal team.
9. How do EORs handle taxes?EORs handle all tax withholdings and contributions in the employee’s country so you’re fully tax compliant and reporting accurate.
10. Do currency exchange rates affect EOR billing?Yes. Some EORs lock in exchange rates for stability while others reflect real-time fluctuations. It’s good to clarify the provider’s policy on this before signing the agreement.