Employer of Record (EOR) vs. Payroll Outsourcing
One handles the entire employment lifecycle; the other handles the math. Discover which service aligns with your operational setup.
Employer of Record (EOR)
A comprehensive solution where the provider becomes the legal employer. They handle contracts, visas, HR, benefits, AND payroll. Explore Enterprise EOR.
Payroll Outsourcing
An administrative service where the provider calculates salaries and taxes for your legal entity. You remain the employer.
Feature Comparison
| Requirement | Employer of Record (EOR) | Payroll Outsourcing |
|---|---|---|
| Local Legal Entity | Not Required | Required |
| Responsibility for Compliance | 100% EOR Provider | 100% You (Client) |
| Employment Contracts | Provided & Signed by EOR | Provided & Signed by You |
| Visa Sponsorship | Yes, Available | No, Not Possible |
| Typical Cost Model | Flat fee / % of Salary | Per Payslip fee (Lower) |
Risks & Use Cases
When EOR is the Best Choice
- Entering a new country for the first time.
- Hiring remote workers where you have no office.
- Need to sponsor visas for expats.
EOR shields you from local labor law claims. Compare risks in our EOR Advisory guide.
When Payroll Outsourcing is Best
- You already have a legal entity in the country.
- You have a large, established local team.
- You want to keep full legal control of staff.
You are liable for any errors in tax or labor law.
Looking for compliance support alongside payroll? Check our Compliance Advisory services.
See Global EOR SolutionsFrequently Asked Questions
No. A payroll outsourcing provider only calculates and processes payments. They do not employ the staff. You must have your own legal entity to act as the employer.
Yes, on a per-employee basis, payroll outsourcing is cheaper because the provider takes on less risk. However, you must factor in the cost of maintaining your own legal entity.
Yes, EOR services always include full payroll processing, tax withholding, and social security contributions as part of the package.
In a payroll outsourcing model, you (the employer) remain liable for tax compliance, even if the provider made the mistake (though your contract may offer some indemnity).
Optimize Your Global Operations
Whether you need full EOR or just payroll support, ManpowerHR has the solution.