How does an EOR work?

An Employer of Record (EOR) is a third-party entity that hires and manages employees on behalf of a client company. EORs typically take on all administrative tasks related to employment, such as payroll processing, tax compliance, benefits administration, and employment contracts. The client company remains responsible for the daily work assignments, management, and direction of the employees. Here is how an EOR works: Contract Negotiation: The client company and the EOR enter into a contractual agreement that outlines the scope of work, services to be provided, and fees for services. Hiring and Onboarding: The EOR recruits and hires employees on behalf of the client company. Once hired, the EOR takes on all the administrative tasks related to onboarding, such as employment contracts, benefits enrollment, and tax documentation. Employee Management: The EOR acts as the employer of record for the client company's employees. This means that the EOR is responsible for managing all aspects of employment, such as compliance with local labor laws, tax compliance, and payroll processing. Payroll and Benefits Administration: The EOR is responsible for payroll processing, including tax withholding and remittance, and administering benefits to employees. This includes health insurance, retirement plans, and other employee benefits. Termination: If an employee is terminated, the EOR is responsible for the separation process, including final payments and processing of any necessary paperwork. Overall, an EOR allows client companies to expand their operations globally without the need to establish a legal entity in a foreign country. The EOR takes on all administrative tasks related to employment, allowing the client company to focus on their core business activities.

EOR, or Employer of Record, is used in various situations, including: International Expansion: Companies that want to expand their business to a new country but do not have an established legal entity can use an EOR to hire employees and handle payroll and HR compliance. Staff Augmentation: Companies that need to quickly and efficiently scale their workforce or bring in specialized talent for a specific project can use an EOR to hire additional employees without having to go through a lengthy recruitment process. Compliance: Companies that want to ensure that they are following all the legal requirements and regulations of a particular country can use an EOR to manage payroll, tax compliance, and employment regulations. Cost-Effective Hiring: Companies that do not want to spend a significant amount of time and resources on hiring and HR can use an EOR to outsource these tasks to a third-party provider, which can be more cost-effective. Reduced Risk: Companies that want to minimize their risk when hiring employees in a foreign country can use an EOR to take on the legal and financial responsibility of the employment relationship.

Simplify Global Hiring

Gain critical market insights and let us
guide you through the complexities of
international expansion.

Build Your Global Team

Explore More Resources

Downloadable Guides

Guides designed to help you navigate key aspects of global hiring.

Managing a Global Workforce: 5 Essential Tips for Success

Expanding your team internationally opens up incredible opportunities—but let’s be honest, it also comes with challenges. From navigating compliance laws to...

Discover More➝

Why Latin America is the Next Big Tech Talent Hub

Finding top tech talent is becoming more competitive, but Latin America is emerging as a prime destination for companies looking to scale...

Discover More➝

The 10 Best Places to Find Top Talent in Latin America

Hiring internationally can feel overwhelming, but Latin America is making it easier than ever. With a booming workforce, cost-effective salaries, and growing...

Discover More➝

The Smart Way to Borderless Hiring: A Guide to PEO Services

Hiring talent in a new country is exciting—but it can also be a logistical headache. From legal compliance and payroll...

Discover More➝

Case Studies

Real-world examples of how our expertise transformed global businesses.

Service provided

BPO and EOR

countries covered

5-400

workers per project

100%

compliance with safety laws

<30

days’ workforce scaling

Read Case➝

Service provided

Employer of record

20+

employees relocated

countries covered

100%

compliance with local laws

entity setup required

Read Case➝

Service provided

Recruitment process outsourcing

company areas filled

100%

regional compliance

<30

days special hiring turnaround

recruitment risks

Read Case➝

Service provided

Employer of record

countries covered

$150k

saved on entity setup

100%

compliant hiring

legal risks

Read Case➝

Service provided

PPO and EOR

+1,500

employees

100%

error-free salary and tax calculations

$9.7

billion industry

Read Case➝

Service provided

Employer of record

<15

days for recruitment

$103

billion industry

payroll management risks

Read Case➝

Payroll Simulator

Estimate global salaries by automatically factoring in local taxes, benefits, currencies, and more.

Calculate Payroll

Articles

Stay informed on the latest topics in the world of global expansion.

What is Neurodiversity in The Workplace And How to Support it

Talent Acquisition

5 Read

Fostering a truly inclusive workplace means going beyond compliance and actively celebrating neurodiversity in the workplace.

Simplify Global Hiring

Explore More Resources

Downloadable Guides

Managing a Global Workforce: 5 Essential Tips for Success

Why Latin America is the Next Big Tech Talent Hub

The 10 Best Places to Find Top Talent in Latin America

The Smart Way to Borderless Hiring: A Guide to PEO Services

Case Studies

Service provided

Service provided

Service provided

Service provided

Service provided

Service provided

Payroll Simulator

Articles

What is Neurodiversity in The Workplace And How to Support it

PEO vs EOR Services: 2 Options to Choose

New Minimum Wage in El Salvador: What it Means For Global Companies

Serviap Global Celebrates 15 Years

How to Pay Contractors Internationally: a Quick Guide

How Can a US Company Hire a Foreign Employee?: 3 Useful Options

Working Hours in Mexico: Country Plans 8-Hours Reduction by 2030

4 Global Expansion Tips With Aaron McDaniel

Serviap Global Wins at the 2025 Excellence in Customer Service Awards

Live Webinar: What You Must Know About Global Expansion in 2025, with Aaron McDaniel

Serviap Global is a Finalist at the 2025 TIARA Talent Solutions Awards US

How to Use AI in Hiring International Workers

How U.S. Tariffs Benefit Canada and Mexico: A Strategic Advantage in Global Trade

Borderless Talks Ep. 6: Women in Remote Work And The Evolution of The EOR Industry

Serviap Global is a Finalist at the 2025 Latin America Inspiring Workplaces Awards

How to Manage International Teams: 5 Tips for Leaders

2 Options for Hiring Remote Foreign Employees Without a Local Entity

Infographics: Can we Overcome The Global Talent Shortage in 2025?

Borderless Talks Ep. 5: Advantages of Chinese companies in Latin America

6 Important Documents to Hire Employees Abroad

Global Hiring Trends in 2025: Which Industries Are Leading International Expansion?

Infographic: Working Hours in Latin America by Country

Hiring In Colombia: 10 Key Factors To Know Beforehand

How Does EOR Work?: Your 6-Steps Easy Guide

New “Unidad de Medida y Actualización” in Mexico: What it Means for Employers in 2025

Borderless Talks Ep. 4: Top Global Expansion Mistakes to Avoid in 2025

Infographics: International Maternity Leave Standards

Borderless Talks Ep. 3: Zain Ali on Global Hiring Solutions

5 Top Digital Nomad Destinations in South America

6 Global Team Building Tips from Santa Claus Himself