EOR vs PEO vs ASO: What’s the best fit for UK startups?

If you’re running a startup, you’ll know how quickly things can scale. One minute it’s just you and a few mates in a co-working space. Next minute you’re trying to sort payroll for ten people in three countries and someone’s asking about maternity leave.

At some point, DIY HR stops working. That’s when people start looking into outside help. And sometimes, it's in the form of an Employer of Record (EOR), a Professional Employer Organisation (PEO), or an Administrative Services Organisation (ASO). They may sound a little similar, but they each do very different jobs.

This article goes through exactly what each one does, how they handle things like payroll processing, tax, and onboarding, and when they make sense for a growing team. We also cover how they fit in when you’re dealing with international employment and juggling a bunch of new HR responsibilities.

Quick definitions: EOR, PEO, and ASO

Before you decide which one’s right for your business, you need to know what each one does. Here’s a general overview:

What’s an EOR?

An EOR is a third party that hires people for you in another country. They become the legal employer. But your team still works for you day-to-day. You stay in charge of the work. The EOR sorts the legal side. For instance, things like contracts, payroll processing, tax, and employee benefits.

In short, they take care of all the employment admin in whatever country your worker is based, without you needing to set up a legal entity there.

What’s a PEO?

A PEO helps with HR responsibilities, but it doesn't employ staff for you. A PEO works alongside your business, offering outsourced HR and payroll services. That means the PEO looks after payroll processing, benefits administration, and some compliance work.

You stay the legal employer and in charge of daily operations. The PEO supports you with the HR side of your employer responsibilities. And they do it behind the scenes.

What’s an ASO?

An ASO gives you ongoing HR support, but you stay in charge of everything else. They don’t employ your staff. They don’t act as a co-employer either. What they do is take care of the admin behind the scenes. Things like payroll runs, managing benefits, and keeping HR records tidy.

The key thing is: you’re still the legal employer, and you’re still on the hook for all compliance. They just look after some of the admin so you don’t have to. It’s more like hiring an extra pair of hands than handing over control. You get help with the paperwork. But you’re still the one making the decisions and carrying the risk.

Main differences between an EOR, PEO, and ASO

To make things easier to absorb, here are the key differences between an EOR, PEO, and ASO:

Which model is right for your startup?

Now that you know the basics of each model, let’s talk about when each one might make the most sense for your business:

When to use an Employer of Record

Use an Employer of Record when you want to hire people in countries outside the UK without setting up shop in every country. It can be ideal if you’re moving fast and need boots on the ground, but don’t want to spend months (and thousands) setting up local companies.

You stay focused on the work. The EOR deals with tax regulations, employment laws, benefits administration, and all the bits that could land you in hot water otherwise. They take on all the employer responsibilities, while you still run the day-to-day operations.

Example: You’re a UK tech startup. You land a new client in Spain and need a sales rep based there. Instead of setting up a Spanish company, you use an EOR. They legally employ the rep, sort tax compliance, and set up benefits. And you stay focused on growing your business, without getting bogged down in red tape.

When to use a Professional Employer Organisation

Use a Professional Employer Organisation if you’re growing your UK team and HR admin is starting to take over your life. A PEO acts like an outsourcing firm for all the fiddly HR jobs. For example, things like payroll functions, pensions, benefits, and basic compliance. You stay the legal employer under the PEO model. But you’ve got a service provider sorting the paperwork.

It can be a smart move if you want to keep control over your core business but don’t have time to wrestle with annual leave calendars, benefits auto-enrolment, or other bits of admin.

Example: You’re running a FinTech startup. You’re hiring five people in a month and realising payroll and HR admin is eating half your week. You bring in a PEO. They run your payroll functions, sort benefits, and manage leave tracking. This frees you up to focus on growing the business.

When to use an Administrative Services Organisation

Use an Administrative Services Organisation if you just want help with admin but still want to stay in charge of everything. An ASO gives you ongoing HR support like running payroll and filing paperwork, but you keep full control over your team and all compliance risk.

It can be best when you’ve already got your processes sorted, but you’re ready to hand off the admin so you can work smarter.Example: You’re managing a small startup team. You’ve already set up contracts, benefits, and policies. But keeping on top of HR support and filing paperwork is driving you mad. An ASO takes it off your plate so you can focus on the important stuff without having to give up control.

Keep things flexible with Rippling

You don’t have to pick one model and stick with it forever. With Rippling, you get the flexibility to use an EOR, a PEO, or an ASO. And all through the same simple platform.

Need to hire someone overseas? Rippling’s Employer of Record sorts the legal side in minutes, so you can start onboarding straight away without opening a local entity.

Need reliable HR and payroll help for your UK team? The Professional Employer Organisation setup lets you hand off all the boring admin but still stay in control.

Just want someone to take care of payroll runs and HR paperwork? Rippling's Administrative Services Organisation model has you sorted.

Rippling is the only all-in-one workforce management platform that connects HR, Payroll, IT, and Spend management all in one place. Everything runs off a single source of truth. That means when you update something like a start date, salary, or benefits, it flows through every system automatically. No double handling. No mistakes.

Whether you're scaling at home or hiring internationally, you can switch between EOR, PEO, and ASO services as you grow. And without changing platforms, providers, or contracts. Just plug and play what you need, when you need it.

EOR, PEO, and ASO FAQs

What’s the best ASO for small businesses in the UK?

There’s no one-size-fits-all answer. The best ASO for your business depends on how much support you want and how much control you want to keep. If you’re after a platform that’s simple to use, scales with you, and lets you stay fully in charge while taking the admin off your plate, Rippling can be a strong choice.

It runs payroll, manages employee benefits, keeps your HR paperwork tidy, and lets you stay the legal employer, all from one system. You don’t have to switch tools or providers as you grow either. It’s built to move with you as your business gets bigger.

How do I know which EOR is right for my business? 

Not all EORs are the same. If you’re picking one, here are some things to check:

• Compliance support: Make sure they properly handle employment laws, tax regulations, and employer responsibilities in every country you want to hire in.
• Independent contractors: Some EORs only support full-time employees. If you might want to hire contractors too, check they can handle both.
• Benefits administration: Check what kinds of benefits the EOR can offer your overseas team. For example, things like health insurance, pensions, and other perks. It matters when it comes to attracting and keeping good people.
• Up-to-date systems: Your EOR should keep payroll, taxes, and contracts up to date automatically, without you having to run after them.
• Cost savings: Compare the costs of using the EOR with setting up a legal entity yourself. The right EOR should save you time and money.

If you want a simple option that covers all of that, and lets you manage UK and international teams on the same platform, Rippling can be a great option.

What’s the difference between HR and PEO?

HR is the function inside your company that handles things like hiring, onboarding, managing benefits, and sorting out workplace issues. It’s the people and systems you set up yourself.

A PEO is an outside service that takes care of lots of these HR responsibilities for you. For instance, payroll processing, benefits administration, and some elements of compliance. With a PEO, you’re still the legal employer, but the PEO steps in to take care of the fiddly day-to-day admin under a co-employment setup. Think of it like getting a full HR department on call without having to build one from scratch.

What’s the difference between HR and ASO?

As mentioned, HR is your internal team or systems that run your employee admin, policies, hiring, and people management.

An ASO is a service that gives you ongoing HR support, but without changing your employment setup. You’re still the legal employer. You’re still in charge of everything. The ASO just steps in to take care of things like running payroll, sorting out employee benefits, and keeping your HR systems in good shape. It’s a bit like hiring a really organised assistant to deal with the paperwork side, while you still steer the ship.

This blog is based on information available to Rippling as of May 13, 2025.

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.