How to find the right EOR service: 7 key steps

Hiring someone overseas seems exciting until you get to the behind-the-scenes stuff. It's at this point you're likely to realise it's not so exciting at all. There's a ridiculous amount of stuff to get your head around. This includes everything from different tax systems to payroll setups, local employment laws, contracts, and employee benefits. In short, not only is it a monstrous amount of admin, but it's admin you’ve probably never seen before.

Thankfully, there's something called an Employer of Record (EOR) that can do the majority of the heavy lifting for you.

In this article, we explain what an EOR is and what an EOR service typically includes. We also share how to pick the right EOR for your business and when it makes sense to use one.

The info in this article is current as of June 2025. Employment laws change often, especially when you’re dealing with multiple countries. Before you act on anything here, it’s a good idea to double-check the latest rules or talk to a local expert.

What is an Employer of Record (EOR)?

Imagine that you want to hire someone in another country. You’ve found the right person. But you don’t have a company set up there. So, you can’t legally hire them, run payroll compliantly, or issue a contract that you're certain ticks all the local labour law boxes.

That’s where an employer of record shines. Essentially, the EOR becomes the legal employer on paper. You still manage the employee and assign them their work. But the EOR takes care of the rest (conveniently, the less fun bits). For example, the employment contracts, tax, payroll, benefits, and anything else tied to local employment laws.

Without an EOR service in your corner, you’d need to set up your own legal entity in the country you want to hire in. That generally means registering with the government there, getting business numbers, setting up a local bank account, hiring a lawyer, and learning local rules. And then on top of all that, hoping you don’t miss anything. It’s a huge amount of work just to get one person or a few people on board.

With an EOR, you can skip all that 'noise'. A great EOR service will typically:

• Draft the right contract based on local employment laws
• Take care of tax, super, and leave based on local standards
• Run payroll in local currencies, on time
• Offer the right mix of statutory benefits and extras
• Keep you out of trouble with local authorities

If you're hiring international employees and don’t want to deal with the red tape, engaging an EOR service is the easier way to do it. It means you can stay focused on the work while the EOR takes care of the legal responsibilities.

How to find the right EOR service

Not all EOR services are built the same. Some only cover a few countries. Some don’t get payroll right. Some promise the world, but leave you running after support tickets when things go astray.

The good EORs manage everything properly, from start to finish, without making your team clean up after them. They make it easy to start hiring employees overseas without second guessing every move. Here are a few pointers to help you separate the good from the bad:

Step 1: Check geographic coverage and local expertise

First things first. Can they actually help in the country you want to hire in? It sounds obvious, but not everyone realises that not all EORs cover the same ground. It's also worth noting that some EORs say they support 100+ countries, when in reality, they farm most of it out to local third parties. That can mean longer wait times, miserable communication, and a fair bit of room for things to go wrong.

It's important that the EOR you choose has excellent on-the-ground knowledge. They should understand the small stuff too. In other words, not just what the law says, but how things really work in practice. Every country has unique rules, hidden steps, and admin quirks. If your EOR provider doesn’t know them, your team is more than likely to end up paying for it.

Example:

You want to hire someone in Germany. A good EOR will know the probation period is capped at six months. They’ll know Bavaria has extra public holidays that don’t apply elsewhere. And that you need to give one month's notice if the person works for you for over two years. They’ll make sure all of that is in the employment contract.

A weak EOR, on the other hand, might leave those specifics out or copy them from the wrong region.

Step 2: Assess compliance track record and risk management

International hiring creates real legal risks. Choose an EOR service that tracks rule changes every day, updates contracts fast, and guides terminations by the book. Ask for proof, such as recent audits, local licences, and a clear action plan for if things blow up.

A poor EOR provider may miss shifts in local tax laws and then put the administrative burden back on your team. Mistakes aren't just a matter of inconvenience, either. They can land you in court.

Example:

You need to end a sales rep’s contract in France. A competent EOR will ensure you follow the correct steps. For example, setting up a clear performance plan, sending formal warnings, and giving notice that meets French law. If your company has a works council, they’ll tell you when it needs to be consulted.

And when it’s time to pay severance, they’ll use the correct salary calculation so you don’t end up shortchanging the employee or paying too much. A sloppy EOR might miss key steps. And that’s how unfair dismissal claims happen.

Step 3: Evaluate payroll accuracy and reliability

Payroll needs to be 100% correct. Delays, rounding errors, and tax slip-ups rarely end well. If you're paying employees in multiple countries, with different rules, in different currencies, your EOR needs to get it right. If they can't, they’re putting your business at serious risk.

Ask how they run payroll processing. For instance, do they use the same system in every country? Or do they patch things together using third parties? Ask how they manage tax compliance, what checks they do before payday, and how fast they fix issues if something doesn't go to plan.

Example:

You hire employees globally, including one in Brazil. Brazil has a 13th-month salary, compulsory union deductions, and a rotating tax table that changes depending on your employee's monthly income. A good EOR will know this inside out. 

An incompetent one may miss a tax rule or pay the wrong amount. And your employee will probably be the one to flag it, not them. It's not a good look.

Step 4: Understand their benefits administration capabilities

Some EORs only offer the legal minimum when it comes to benefits. In other words, the stuff the law forces you to cover, like super in Australia. Generally speaking, top talent wants more. So, it pays to check if the EOR service also handles private extras. For example, better health insurance and wellness perks.

Ask how they run benefits administration. For instance, do they source plans, enrol staff, track usage, and keep everything compliant? Or do they dump that work on you?

Example:

You need to hire an engineer in Singapore. The statutory benefits there include Central Provident Fund (CPF) contributions and basic health cover. A decent EOR service might offer a range of private health plans, enrol the employee, and manage claims end to end. They may also set up yearly medical and dental check-ups (which most multinationals provide in that market).

A weak provider, however, will probably stop at CPF, hand you a pile of forms, and tell your HR team to sort out the extras.

Step 5: Look at the employee experience they deliver

Your team won’t care that you’re using an EOR. They’ll just expect things to work. If the employee experience sucks, for example, contracts don't make sense, payslips are late, or support takes forever, it's your brand that takes the hit, not the EOR.

When choosing an EOR service, try to get an understanding of what the experience feels for the employee. For instance, how do they get their contract? Is it in their local language? Are payslips easy to read? What happens if there’s a mistake with pay?

Example:

You hire a designer in the Philippines. A good EOR helps them get their Tax Identification Number (TIN) and PhilHealth set up. They also send an easy-to-understand contract that includes 13th-month pay, and they run payroll every two weeks in pesos. One month in, the employee notices their Social Security System (SSS) contribution is missing. The EOR picks it up, owns the mistake, and fixes it that same day.

A bad EOR shrugs it off, claims they're looking into it, and leaves the employee unpaid for three weeks. That kind of thing can kill trust fast.

Step 6: Review transparency of fees and contract flexibility

Some EORs make pricing more confusing than it needs to be. There may be a flat fee, then a bunch of 'handling charges' or 'local surcharges' hidden somewhere in the fine print. That’s not how it should work.

Beyond being cost effective, it's important that pricing is clear and predictable. You definitely shouldn't be left guessing what your actual cost will be each month and losing sleep over surprise fees. Make sure you check how long you’re locked in for, too. Some EOR service providers may lock you into 12-month contracts and charge a penalty if you want to offboard an employee or stop using their service before the end of the term.

Example:

You hire a developer in Vietnam. The EOR quotes you $1,200 a month. But then you get your first invoice and see random line items for 'country compliance fee' and 'currency adjustment'. Suddenly you’re paying $1,400. 

A fair EOR will give you a simple breakdown of costs upfront. You'll know exactly what you need to pay each month. And you can leave if things stop working for you, without being penalised.

Step 7: Examine the technology and scalability of the platform

When choosing an EOR, it's important to remember that you’re not only picking a service. You’re also picking a platform. If it’s slow, awkward, or full of workarounds, your team’s probably going to feel it.

Ask to see how it works. Identify if you can add a new employee yourself, download a contract without asking for support, and see everyone’s pay in one place. If not, chances are you’re going to spend half your week running after things that should otherwise take a couple of clicks.

Example:

You’ve got a developer in India, a designer in the Philippines, and a marketing hire in New Zealand. An innovative EOR platform gives you a clear view of all three in one place. For instance, at a glance, you can see their pay, contracts, time off, the lot. You can also make changes without logging three separate tickets.

A poorly designed EOR platform, however, may mean bouncing between country portals and waiting two days just to tweak a salary. While it can be manageable with one or two hires, once you start growing, it'll likely become a full-time job.

When does using an EOR make sense?

An EOR service isn’t always a necessity. For example, in cases whereby you’ve already got a legal entity or you’re hiring a contractor. But if you’re bringing on international workers as employees and you don’t have boots on the ground, it’s often the easiest and safest way to do it.

It can help you tap into global talent quickly, without drowning in admin or getting stuck in legal grey areas. Here are some of the most common situations where an EOR makes sense:

Hiring in a new country without setting up a local entity

Setting up a company overseas may sound straightforward, but it's really not. You’ve got to register with local authorities, find a local bank, hire a lawyer, set up payroll, and follow a hiring process you’ve never dealt with before. And that’s just to get started. Then there's ongoing reporting and tax filings to deal with.

An EOR service lets you hire in different countries without going through all of that. You can get someone on board fast. And without having to establish local legal entities you’re not ready for.

Testing new markets or hiring quickly

Imagine you’re thinking of expanding into Southeast Asia. But you don’t know yet if it’ll work. And you definitely don’t want to waste months setting up an entity just to test the waters. In cases like this, an EOR makes sense. You can hire someone, get started straight away, and just see how things go. If it works, fantastic. If not, you haven’t wasted thousands building something you don’t need.

It’s also helpful when you find the ideal candidate but don’t have time to sort out the admin. An EOR service lets you move quickly and legally, without holding up your global operations.

Hiring remote talent where you lack expertise in local compliance

Hiring overseas goes far beyond just finding someone. It involves staying compliant in a place where the local laws don’t match what you’re used to dealing with. Every country has its own rules around contracts, notice periods, tax, leave, benefits, and how you hire talent in the first place. Getting it wrong carries a lot of risk. And if you're new to the market, the chances of getting it wrong aren't exactly slim.

An EOR becomes the legal employer. It takes care of all the boring-but-important stuff. It also makes sure you’re not breaking laws you probably didn’t even know existed.

Scaling global teams without growing internal HR/admin workload

If you’re growing fast across borders, your HR team is probably already feeling the stretch. Managing payroll, compliance, and reporting in multiple countries can push them over the edge. This is where an EOR service can make a significant difference. It can manage the legal setup, run payroll, help keep you compliant, and take care of the local admin.

Using an EOR is one of the easiest ways to support global expansion without blowing out your headcount or falling behind on international HR compliance.

Everything you need to run a global team

Rippling is a full global employment platform. It helps you manage your entire workforce from one place, whether they’re down the road or on the other side of the world.

If you need to hire international employees, Rippling can act as your legal employer through its built-in EOR capabilities. That means you can onboard people quickly, without setting up a local entity or learning a whole new set of employment laws. Rippling handles the employment contracts, compliance, global payroll, benefits, and more, while you stay focused on the work.

With Rippling, you can:

• Tap into international employment without setting up local entities
• Run global payroll in local currencies with full tax compliance
• Stay on top of employment laws in multiple countries
• Onboard staff quickly, with compliant employment contracts, policies, and benefits
• Manage global employees and domestic staff in one HR system
• Scale your global workforce without growing your administrative burden

What makes Rippling different from other EORs is the way everything works together. HR, payroll, benefits, and IT provisioning are all in one place and built on a single source of truth. That means fewer tools to battle with and way less double-handling. It also means no more back and forth between brain numbing spreadsheets or third parties when something breaks.

From your first global hire to a full international team, Rippling gives you the visibility, control, and flexibility to do it efficiently from day one.

EOR service FAQs

What is the difference between an EOR and a PEO?

A Professional Employer Organisation (PEO) shares employment responsibilities with your business. You remain the legal employer. The PEO helps you manage payroll, benefits, and compliance, usually within the same country.

An Employer of Record (EOR) becomes the legal employer on paper. It takes full responsibility for compliance, employment contracts, payroll, and tax. You still manage the day-to-day work, but the EOR takes care of the admin.

Is an EOR a staffing agency?

No. A staffing agency finds and supplies workers, often for short-term placements or seasonal roles. You don’t choose the person. And they work for the agency, not you.

An EOR doesn’t source talent for you. You find and hire your own people. The EOR just makes it legally possible to hire them in a country where you don’t have your own entity.

Do I need an EOR if I already have a local entity?

Not always. If you already have your own legal entity in the country, you may be able to manage legal employment on your own. But keep in mind that even with a local presence, managing payroll, benefits, and compliance can still be tricky. This is especially true in countries with layered employment laws.

Some businesses still choose to use employer of record services alongside their own entities. They do this to simplify global hiring, reduce risk, or bridge gaps during a transition period. What you choose to do ultimately depends on your setup, resources, and appetite for local admin.

Is using an EOR legal in all countries?

EOR services aren’t explicitly illegal anywhere. But in some countries, the rules are pretty tight and you need to be very careful how you use an EOR.

Germany, France, Italy, and Spain, treat EORs like labour leasing, for example. That means the provider often needs a licence. There may also be limits on how long you can employ someone through that setup. China allows EORs, but only under strict labour dispatch rules. In the UAE, you need special government approval to use an EOR model. And in Brazil, you have to follow detailed compliance steps, which include registering each employment relationship with the local authorities.

So, while EOR services aren’t necessarily banned anywhere, the path isn't always straight and narrow. A reputable EOR provider will tell you upfront if the country you want to hire in has restrictions or requires extra setup. If they try to gloss over that, consider it a red flag.

How quickly can I onboard an employee through an EOR?

This depends heavily on the EOR service you use. Typically, though, you can onboard an employee within a week or two. Sometimes faster.

If you’re hiring in places like the Philippines, Singapore, or the UK, it may be a matter of a few days. Countries like Brazil, France, or Germany can take longer. This is mostly because there’s more paperwork and local approvals involved.

Often, delays stem from waiting on things like ID, banking info, or tax numbers from your employee. A good EOR will chase that up quickly though and keep you in the loop regarding exactly what’s holding things up. A bad one? You’ll be the one asking for updates and confused why nothing’s moving.

If speed is important to you, make sure you ask the EOR to explain how long it usually takes in the country you’re hiring in and what they do to keep the ball rolling. 

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.