What is the main difference between an EOR and a PEO?

An employer of record is the only legal employer of your worker in that country. A PEO is a co-employer: you keep your own company and stay an employer, and the PEO shares payroll, tax and HR duties.

How much does an employer of record cost?

As of October 2026, Deel, Remote and Justworks list EOR prices from $599 per employee a month, and Oyster lists $699. The worker's salary, local taxes and benefits are on top.

Can I use a PEO to hire abroad?

PEOs work where you already have a legal entity, and most US PEOs serve US staff. For a country where you have no entity, an EOR is the usual route.

Is an EOR cheaper than hiring a contractor?

No. Contractor platforms cost far less, from about $29 to $49 per contractor a month. But a worker who acts like an employee can be misclassified, which carries legal risk in many countries.

Employer of record vs PEO: which one you need

Use an employer of record (EOR) when you want to hire someone in a country where you have no company. The EOR becomes their legal employer there. Use a PEO when you already have a company where your staff live and want help with payroll, HR and benefits. EOR prices start near $599 per employee a month. US PEO prices start near $79. Prices are as of October 2026, in US dollars.

The difference in one line each

EOR: the provider is the legal employer. You direct the work. You do not need an entity in that country.
PEO: you are the employer, and the PEO is a co-employer. You need your own entity where the staff work.

Who is the legal employer

With an EOR, the provider signs the local employment contract, runs local payroll, pays local taxes and provides required benefits. Your worker's contract is with the EOR. You pay the EOR the salary, the employer costs and a monthly fee. You decide the work, the goals and whether to keep the person.

With a PEO, you keep your own company and your own employer status. The PEO shares duties under a co-employment contract. In the US, the PEO usually runs payroll and files employment taxes under its own tax ID, and gives you access to its group benefits.

In the US, the tax liability depends on whether the PEO is certified. The IRS chart of third-party arrangements says a certified PEO (CPEO) is generally solely liable for federal employment taxes on the wages it pays to worksite employees. For providers that are not certified, the employer usually remains responsible. Check certification on the IRS CPEO page.

Where each one works

EOR: in countries where you have no entity. The big providers cover many countries. Remote says it hires in more than 90.
PEO: in the country where your company is. Most PEOs you will meet are US PEOs for US staff.

If your company is in the US and you hire in Portugal, Mexico or the Philippines, that is EOR work. If you are hiring your tenth US employee and want better health plans, that is PEO work.

Published prices

Employer of record, per employee per month:

Deel: from $599.
Remote: from $599.
Justworks: $599, available with its PEO Basic and Plus plans.
Oyster: $699, with annual discounts available.

US PEO, per employee per month:

Justworks PEO Basic: $79. PEO Plus with medical, dental and vision: $124.
Remote US PEO: from $99.
Deel US PEO: from $125.

Sources: Deel, Remote, Justworks and Oyster.

What the fee does not include

The fee is only the provider's charge. On top, you pay the salary, employer social taxes, mandatory benefits and any extras such as equipment. In many countries, employer costs add a large share to salary. Ask the EOR for a full cost estimate per country before you make an offer.

Say you hire a designer abroad at $4,000 a month. At $599 a month, the EOR fee alone is $7,188 a year. Add the local employer costs from the EOR's estimate to get the real total.

The cheaper option, and its risk

Many owners start with contractors. Contractor platforms cost much less:

Remote Contractor Management: from $29 per contractor a month.
Deel contractors: from $49 per contractor a month.
Contractor of record, where the provider holds the contract and takes on more risk: from $325 a month at both Deel and Remote.

The risk is misclassification. If a contractor works fixed hours, only for you, under your direction, many countries may treat them as an employee. That can bring back taxes, benefits and penalties. Rules differ by country, so check with a local employment lawyer before you treat a full-time person as a contractor.

When each one fits

Choose an EOR when:

You want to hire a specific person in a country where you have no entity.
You want a proper local employment contract and benefits for them.
You are testing a market before you set up a local company.

Choose a PEO when:

Your staff work in the country where your company is registered.
You want better benefits than you can buy alone.
You want HR help and payroll tax handling in one place.

Set up your own entity when:

You plan several hires in one country for years. At some headcount, an entity and local payroll cost less than EOR fees. Ask an accountant in that country to run the numbers.

Questions to ask an EOR

EOR questions

What is the full monthly cost for a [role] in [country] at [salary], including employer taxes and mandatory benefits?
Do you have your own entity in [country], or do you use a partner?
What is the notice period, and what does ending the contract cost?
Who owns the work the employee produces, and what does the contract say about it?
How do you handle equipment, expenses and time off?
How fast can you onboard, and what documents do you need?
What is your contract length and your fee if I move the employee to my own entity later?