How to choose the right employer of record: 7 steps

Global employment sounds exciting until you hit the legal stuff. At this point, it can become somewhat overwhelming and confusing.

If you’re thinking about hiring outside the UK, chances are you’ll need an Employer of Record (EOR). An EOR acts as the legal employer in the country you want to hire in. They take care of all the boring-but-important bits like contracts, payroll, and adhering to local employment laws.

But there's a catch. Not all EORs are equal. Some offer full legal protection and brilliant tech. Others are basically middlemen with slow systems and patchy coverage.

In this article, we offer guidance on how to choose the right Employer of Record partner. We share what to look for, what to avoid, and what questions to ask before you sign anything. Because when it comes to hiring international talent, doing it the wrong way can be an expensive mistake.

What is an Employer of Record (EOR)?

Want to hire employees abroad but don’t fancy setting up a company in every country? Then you’ll need an Employer of Record. An EOR is a third party that becomes the legal employer on paper. But your team still works for you.

You choose who you want to hire. The EOR then hires them on your behalf. They draft their contracts, sort their benefits, handle their payroll, and make sure everything aligns with local labour laws. Even though the EOR is the 'legal employer', it's still you who's in charge of the international hires' day-to-day work, projects, deadlines, and performance. The EOR doesn’t step into that side of things.

The big win here is that you don’t need to set up your own legal entity in the country you’re hiring in. You get to skip the red tape, the foreign banking nightmares, and the risk of breaking employment law without knowing. The Employer of Record takes that weight off your shoulders by handling the legal responsibilities in each country you hire.

Working with an EOR makes it possible to build a global team quickly while minimising the risk of messing up contracts, misclassifying staff, or facing fines because you didn’t follow the rules.

7 steps to choosing the right Employer of Record for your business

There's more to picking an Employer of Record than who's cheapest or who answers your enquiry first. If you want smooth, efficient, reliable EOR services, you’ve got to dig a bit deeper than that. Here’s a step-by-step guide to choosing the right EOR for your business:

Step 1: Define your hiring goals and locations

Before you start comparing providers, you should have a clear idea of what you need. Are you hiring one person in Germany? Or building a remote sales team across five countries? Your international hiring goals will shape everything. For instance, what kind of EOR services you require, how much support you’ll need, and how much it’s likely to cost.

Write down the roles, the countries, and how fast you need everything in place. That’ll stop you from getting pulled in by flashy sales talk that doesn’t quite fit your situation.

Step 2: Research providers that operate in those countries

Not all EORs work everywhere. Some only cover Europe. Others outsource most of their operations in Asia or Africa. So, make sure the Employer of Record you go with actually operates in the countries you want to hire in. And without needing to rely on a foreign entity or third-party network.

Check that they understand the local laws and tax rules. Because that’s the whole point, right? You want someone who knows exactly how to hire legally in each country and help you build a global team without stepping on landmines.

Step 3: Compare core services and compliance coverage

'Employer of Record services' is a broad phrase. Look closely at what each EOR actually provides. Some just take care of basic employment contracts and payroll. Others go further. For example, offering visa support, employment benefits, and comprehensive compliance solutions.

Make a list. Do they handle right-to-work checks? Do they stay on top of contract updates when laws change? Can they advise on UK HMRC ‘off-payroll’ (IR35) implications and other mis-classification risks when hiring contractors abroad? Do they manage onboarding and offboarding properly? You need an EOR who’ll keep you safe across the full employee lifecycle. Not just on day one.

Step 4: Request pricing and service breakdowns

Employer of Record pricing can vary quite a lot. Some charge a percentage of salary. Others work on a flat monthly fee. And some sneak in extra charges for onboarding, offboarding, or country-specific extras.

Make sure to ask potential EORs for a full breakdown of international employment costs. What’s included? What’s not? How do fees change if your team grows? A decent EOR will be upfront. If they’re vague or cagey, walk away.

Step 5: Evaluate their platform and technology

If you’re dealing with global employment, good tech isn’t optional. It’s what keeps things fast, trackable, and error-free. Ask to see the platform. Can you view employee records, generate payslips, approve time off, and get reports easily?

The best EORs offer user-friendly dashboards with all your global team data in one place. The worst ones send you PDFs by email and expect you to chase missing files. You don’t want that.

Step 6: Ask about employee support and experience

The Employer of Record might take care of the paperwork. But your international team will still see you as their employer. So, if something goes wrong, like a payslip error or a mix-up with holiday leave, it reflects badly on your business, not the EOR.

Ask how the provider deals with employee questions. Who should your global team contact if they’re confused about local health insurance? How quickly will they get a response? What support is available in their own language?

You want your team to feel looked after, no matter where they’re based. A good EOR should offer solid onboarding, fast support, and clear communication every step of the way.

Step 7: Check reviews, case studies, and references

What’s the Employer of Record's track record like? Have they helped companies like yours before? Any big wins or red flags? Don’t just trust what’s on their website. Look at third-party review sites. You could even go as far as asking for real references you can speak to.

Good EORs are proud of the companies they’ve helped. They’ll happily connect you with other founders, finance teams, or HR leads who’ve worked with them. If they get weird about it, trust your gut.

Key things to look for in an EOR provider

Once you’ve narrowed things down, it’s time to dig into the details. It's important that the EOR you choose knows exactly what they’re doing and has the right setup behind the scenes. Here are some of the things that really matter:

Local compliance expertise

The Employer of Record you choose has to know their stuff when it comes to local labour laws. That includes things like notice periods, statutory sick pay, public holiday entitlements, and parental leave in each country you’re hiring in.

You don’t want a provider who just copies and pastes the same template contract across 10 countries. You want one that knows the difference between, say, French and British employment law, and can handle things accordingly.

Example: If you’re hiring in Spain, a local expert will know that severance rules are strict and redundancy payouts vary depending on tenure. Choose an EOR who can explain that before you make an offer.

Global coverage (including where you need to hire)

Plenty of providers claim to offer 'global hiring'. But that doesn’t mean they’re set up everywhere. Check their actual presence in the countries you're targeting. Do they have a local entity on the ground? Or are they piggybacking on third-party partners?

Example: If you’re planning to grow a team across Latin America, you don’t want an EOR that only has proper infrastructure in Brazil and outsources the rest.

Transparent pricing

If you’re comparing providers, you’ll quickly notice that pricing models vary. As mentioned, some charge a flat monthly fee per employee and others take a percentage of salary. Some also bundle in extras, while others charge separately for everything from onboarding to benefits admin.

What you want is clear pricing with no surprises down the line.

Example: One provider might quote £450/month for each employee. Another might quote 12% of salary. But if that 12% excludes setup fees, benefits, and local taxes, it could end up costing you a lot more than the flat-fee option.

Employment contracts and benefits

The right Employer of Record won’t stop at a basic employment offer letter. They’ll create compliant employment contracts that cover everything your hire has a right to. They'll also help you offer the right perks to compete locally.

This is where things like private health insurance, paid parental leave, or even meal stipends come in. If you're hiring a global workforce, you need an EOR that understands what employees in each country expect.

Example: In Germany, offering zero benefits might be fine on paper, but it won’t attract strong candidates. A good EOR can help you shape packages that stand out, without breaking local laws.

Payroll and tax accuracy

This one’s simple: if payroll’s done wrong, employees aren't likely to stick around. You need an Employer of Record that can manage salary payments, tax deductions, social contributions, and reporting. And all without any mistakes or drama.

Ask how they handle different currencies, end-of-year tax reporting, and cross-border payments.

Example: If you’ve got someone earning in euros but your budget’s in pounds, the EOR should help you set up regular salary payments with fixed exchange rates. This can mean you’re not dealing with FX surprises every month.

Technology and integrations

Running a global team is easier when your tools work together. The best EORs offer a platform where you can manage employee records, approve time off, track spending, and pull reports all in one place.

Better still if it integrates with the tools you already use. For example, accounting software, expense apps, or your HRIS.

Example: If your finance team uses Xero, look for an EOR platform that syncs directly with it. This can save hours of manual entry and enable you to see the 'big picture' fast.

Employee experience and support

A great platform is important. But so is having real people to talk to. Good EORs typically offer fast, friendly, multilingual support when your team needs help.

That might mean answering a question about payslips in Portuguese, helping someone understand their pension setup, or fixing a missed bank holiday pay bump without delay.

Example: If someone in your team messages the EOR at 10am about a missing payslip, they should get a response that day. Not a generic ticket number and a three-day wait.

Speed and onboarding time

Some EORs are ready to go within days. Others take weeks just to get the paperwork sorted. Ask how long it actually takes to get a new hire set up and ready to start.

Speed matters when you’re trying to secure top candidates or keep projects moving. The EOR should be able to move fast. And without cutting corners.

Example: A good EOR might onboard a hire in Singapore in under a week. A slower provider might take a month (during which time you risk losing your candidate).

Questions to ask before choosing an Employer of Record

When choosing an Employer of Record, it's helpful if you ask the right questions upfront. Otherwise, you could commit to a platform that might not meet your needs six months down the line. Here are some good questions to ask:

• How do you stay up to date with law changes in each country? You’re trusting them to get local employment laws right. So ask how they track legislation, adapt contracts, and notify clients when rules change.
• What does your offboarding process look like? Hiring globally doesn't only involve getting people in. It also involves helping them out properly when they leave. This includes notice periods, final payments, and handing over company property.
• What protections are in place if something goes wrong? For example, if the EOR misfiles a tax document or breaches a local law, are you on the hook, or are they? Ask about liability insurance and legal safeguards.
• How do you manage confidential employee data? When hiring international workers, you're dealing with sensitive information. So ask where that data is stored, how it's protected, and what local privacy laws they follow. For instance, GDPR in Europe, or other country-specific rules elsewhere.
• Can you handle equity and stock options for global hires? If you offer shares or options as part of your comp package, ask if the EOR can support that legally in each market.
• How customisable are your employment contracts? Some EORs only offer fixed templates. Others can tailor clauses to fit your company culture and role-specific needs.
• What happens if I outgrow your platform? Ask how easy it is to transition to your own local entity later. Will they hand over contracts and tax records? Is there support to help with the setup?
• How do you handle disputes or disciplinary issues? It's important to know how they support your business if something serious happens with a hire. This is especially important if you need to end the employment relationship.

Why Rippling’s EOR services are a top choice for UK employers

If your business is hiring internationally, there's a lot you need to deal with. You need to manage legal employment in countries you’ve never worked in before, handle compliance risks you don’t fully understand, and still give your new hires a great experience from day one. That’s exactly what Rippling helps with.

Rippling is more than just an Employer of Record. It’s a full, all-in-one workforce management platform that brings your HR, IT, payroll, and spend management into one place. You get a single source of truth for your entire team, wherever they’re based.

Hire global talent without the stress

With Rippling’s EOR services, you can hire employees in a wide range of countries, without setting up your own local entity. Rippling becomes the legal employer on paper. So, you don’t have to worry about breaching local employment laws or getting things wrong. You stay focused on the day-to-day, while Rippling takes care of the legal responsibilities behind the scenes.

The result? You can expand fast, bring in international workers confidently, and avoid the red tape that usually comes with global hiring.

Stay compliant from day one

Rippling helps keep you covered on the compliance front. The platform is built to reduce risk. It tracks changes in local employment law, adjusts contracts, calculates taxes, and files the right documents at the right time. It takes the heavy lifting out of staying on top of your legal responsibilities, no matter where you hire.

From onboarding and salary payments to time off and terminations, Rippling handles every step in line with local rules. That way, your business avoids fines, disputes, and admin chaos.

Built-in global payroll that just works

Rippling doesn’t bolt global payroll on as an afterthought. It’s baked right into the platform. You can pay your team accurately, on time, and in their local currency. Taxes and deductions are dealt with automatically, based on local rules. No spreadsheets, no guesswork, no month-end meltdowns.

This can make it a lot easier for you to manage a global team without spending hours trying to understand international payroll systems. And your employees? They get paid correctly, every time.

One platform. One login. Zero mess.

Rippling connects everything your team needs to work: contracts, devices, apps, benefits, expenses, and more. Instead of jumping between tools or chasing updates across email, everything’s stored in one tidy place in line with UK and EU General Data Protection Regulation (GDPR). 

Need to change someone’s role or location? Update it once in Rippling, and the platform updates every system linked to that employee. It’s fast, accurate, and saves your team loads of admin each week.

A better experience for your international hires

While there's compliance to think about when hiring internationally, there's also the employee experience. Your global team expects support, clarity, and an easy way to manage their employment relationship with your business.

Rippling gives them a clean, easy-to-use portal where they can access payslips, manage leave, view benefits, and get help in their local language if something goes wrong. It keeps things simple and professional on both sides.

Employer of Record FAQs

What’s the difference between an EOR and a PEO?

An EOR is the legal entity that takes on full employer responsibilities for your international workers. That means they look after payroll, contracts, tax, compliance, and legal employment in the country you’re hiring in.

A PEO (Professional Employer Organisation), on the other hand, only co-employs staff. That setup only works if you’ve already got your own local entity in place, which many UK businesses don’t when hiring internationally.

If you’re expanding overseas and don’t have a legal presence in that country, you’ll need an employer of record, not a PEO.

Can I offer my own benefits with an Employer of Record?

Usually, yes. A good Employer of Record will help you customise benefits packages so they meet local standards and attract top international workers. That could include things like private health insurance, paid parental leave, or meal stipends.

Some EORs offer a set list of benefits you can pick from. Others let you build your own. Just ask upfront what’s possible and how it’s managed in each country.

What happens if I stop working with an EOR?

If you decide to move on, you’ll need to make a plan for what happens to the employees under your current EOR. This usually involves either transferring them to a new EOR or setting up your own local entity and rehiring them under your business name.

A solid EOR should make this as smooth as possible. That includes handing over employee files, tax documents, and any country-specific info you’ll need. Remember to ask what that handover looks like before you commit.

Is it cheaper to set up my own entity instead of using an EOR?

It depends on your situation. Setting up your own company can work if you’re hiring loads of people in one place, long-term. But you’ll be legally responsible for everything. For example, contracts, taxes, pensions, local employment law, and more.

If you’re just testing the waters, or only planning to hire employees overseas in a few countries, then using an Employer of Record can be cheaper and faster. You won’t need to register a business, open foreign bank accounts, or spend weeks figuring out local rules.

What is the best employer of record?

There’s no one-size-fits-all answer. The best EOR for your business will depend on where you’re hiring, what kind of support you need, and how important things like tech, speed, and cost are to you.

That said, look for one with solid global coverage, transparent pricing, great compliance knowledge, and a user-friendly platform (like Rippling). Bonus points if they can handle payroll, onboarding, and employee support all in one place.

Is an Employer of Record a staffing agency?

No, it isn't. A staffing agency helps you find people to hire. An employer of record doesn’t really do the recruiting. They come in after you’ve picked who you want to hire.

The EOR then takes care of all the legal employment bits: setting up contracts, sorting payroll, staying compliant with local law, and making sure your new team members are properly employed in their country. You still manage their day-to-day work. The EOR just handles the admin behind it.

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.