The Employer of Record : How Employer of Record Works

An Employer of Record (EOR) serves as the “go-between” between the employee and the client company. It is particularly important when the latter expands into a country where it does not already have a presence.

The best way to explain the meaning of Employer of Record is to use a relatable example.

Think about jobs you've held in the past...

It's time to get down to business after accepting the offer...

You begin the process of filling out the necessary employment paperwork.

In order to get paid, you need to get paid.

Taxes must be deducted where applicable.

It is likely that you will need employee benefits, such as health insurance

As well as verifying and recording all required work permit

 Essentially, an Employer of Record serves as an intermediary between the employee and the client company when the latter expands into a new country. 

Why or when would a company use Employer of Record services?

In global expansion, an EOR is often used when a company wants to conduct business without setting up its own physical presence in a foreign country.

It can be expensive and difficult to register a local business entity. A project or new business venture may require the company to move quickly. Short-term solutions may be all that's needed.

 How Does an EOR differ from a Global Employment Organization?

Your remote employees in the host country will see the EOR as their legal employer. EORs are often part of a larger Global Employment Outsourcing (GEO) strategy. A GEO is a service that assists businesses of any size in mobilizing their personnel in another country. The GEO will abide by all labor regulations, taxes, and work licenses in the country and locally. They might also employ an EOR to handle the workforce payroll.

As a result, hiring personnel in that country through a global Employer of Record can be a cost-effective option. The EOR will be governed by a legal body that will handle local payroll and employment tasks.

 What Are the Advantages of Using a Record-keeping Employer?

When growing internationally without a prior presence, an EOR is appealing. In the host country, the EOR will be legally responsible for payroll processing, taxation, and immigration. An Employer of Record can also assist you with international hiring, background checks, benefits administration, and other administrative chores.

Companies can get up and running faster than they could if they incorporated a foreign entity in the country. For smaller businesses, using an EOR is also a practical and cost-effective solution. Especially for businesses that lack the necessary corporate infrastructure to handle local payroll, taxes, and immigration.

 What factors should I consider while selecting an Employer of Record?

Most Employers of Record organizations provide similar services, but it's crucial to choose one with whom you feel most at ease. Don't rush the decision-making process; instead, consider the following questions before making a choice.

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Do they have a presence in the country where you want to go?

Are they in compliance with local labor laws on a global scale?

Have they worked with other business owners in your industry?

Will you have a single point of contact or an online portal assigned to you?

Is the Employer of Record service a fundamental service for them?

Our comparison of Employer of Record firms post provides you with a useful foundation for selecting the best EOR service provider for your company's needs.

 PayrollBD's Employer of Record can help you simplify your global business expansion.

PayrollBD can assist you in extending your business operations overseas. Working side by side with clients, we can create an integrated outsourced global employment organization.

Our Employer of Record services include a variety of elements that can be tailored to your specific need. Outsourcing payroll management, assuring compliance with labor laws, tax filing, and work visa sponsorships are just a few of our main services.

We are a genuinely global company that takes a local approach to employee innovation. We don't only work in the countries where we do business; we call them home.