By 2025, around 36 per cent of the global workforce is expected to work remotely, according to workplace studies from Gartner and other research firms. This shift has changed the way companies hire, manage, and retain people. A business in Manchester can now employ developers in Lisbon, designers in Buenos Aires, or accountants in Warsaw. Geography is no longer the primary barrier.
What has not changed are the costs and the compliance obligations. Hiring globally is possible, but it is not free of complexity. Two issues dominate most boardroom discussions: the cost of an Employer of Record (EOR) and the investment required for reliable employee records management software. Together, these decide whether international hiring is efficient or unmanageable.
Decoding Employer of Record (EOR) Costs for Smarter Global Hiring
An Employer of Record (EOR) is a third-party company. It becomes the legal employer on behalf of another business. They handle contracts, payroll, tax deductions, social security contributions, and compliance with local labour laws. Without an EOR, a business would need to open a legal entity in every new country. That process can take six months or more and can become a considerable expense.
However, no two EOR providers provide the same quotation. Companies that are looking for the cheapest employer of record can easily discover that providers follow different pricing models that sometimes include extra costs.
Flat monthly fees
Some EORs charge a flat fee for each employee. The rate is often from $400 to $700 per month. The advantage is predictability. Finance teams know exactly what to expect. But it creates distortions. Employing a junior may look overpriced, while employing a senior feels like a win.
Percentage of salary
Some EOR providers base their fee on gross salary. The range is usually 10 to 15 per cent. A worker on $40,000 adds $4,000 to $6,000 in fees. For senior roles at $90,000, the cost climbs to $9,000–$13,500 per year. It scales with pay but puts extra weight on higher salaries.
Additional charges
Headline rates rarely cover everything. Invoices can list:
- Fees for onboarding and contract preparation
- Charges for termination or redundancy handling
- Currency exchange mark-ups
- Benefit administration costs (health insurance or pensions)
Ignoring these extras can make the cheapest employer of record significantly more expensive over time.
Geography and complexity
The country of hire influences the cost. Spain, for example, has one of the highest employer social security contribution rates in Europe. It averages 30.4 per cent of salary. By comparison, Ireland is closer to 11 per cent. Providers also charge more when labour laws are complex. Costs rise further when collective bargaining agreements require local expertise.
Headcount matters too. Hiring one or two people attracts standard rates. Hiring fifty may secure discounts of 10–20 per cent per employee.
In practice, comparing employer of record costs is not about spotting the lowest figure. You need to understand the fee model. Watch for hidden charges. And never ignore the local rules.
Employee Record Management: The Core of Workforce Compliance
Hiring staff is one challenge – keeping exact records is another. Every contract, payslip, tax record, and benefit needs to be stored safely and easily found. Poor record keeping carries risks. A missing payslip may spark disputes. Incomplete files can lead to fines from regulators.
This is why employee record software has become critical for modern businesses.
Why records matter
Record keeping is not optional. It is a legal requirement. In Spain, payroll and social security records must be kept for at least four years. In Germany, tax records must be kept for ten years.
Beyond compliance, accurate records reduce inefficiency. HR teams waste hours chasing missing forms if systems are not centralised. Well-structured data management also provides insight: turnover rates, absence patterns, and payroll costs are easier to analyse when the records are clean.
What software should be provided?
Modern employee record software and management systems do more than store files. Key features include:
- Encrypted storage to protect confidential employee data.
- Smart workflows that update records after each payroll run or contract change
- Compliance alerts when visas, permits, or contracts need renewal
- Self-service portals where employees download payslips or update addresses themselves
- Audit trails show all edits to data, supporting compliance checks
An employee record management system with these functions reduces administrative work and maintains strong compliance. For a global workforce, it prevents small administrative errors from turning into legal disputes.
How EORs and Record Management Systems Work Together
Employer of record costs and employee records management software appear to be separate issues. One is a service contract, the other a technology tool. In reality, they are linked.
Most established EORs now bundle some form of employee records management software within their service. The monthly EOR fee provides access to a platform that stores contracts, tracks payroll data, and monitors compliance. This integration means businesses are not just outsourcing employment; they are gaining infrastructure to manage workforce data securely.
However, detail matters. A very low-cost EOR might handle payroll but leave record-keeping to the client. That forces the business either to run manual systems or to pay separately for employee records management software. Both add time and money.
By contrast, a provider that seems more expensive may include a comprehensive record management platform. Over a year, this can cut money through fewer mistakes, lower fines, and reduced HR workload. In some cases, the difference between a “cheap” EOR and a reliable one is not the fee, but whether the fee includes proper record systems.
Final Say
Global hiring continues to expand. Compliance challenges grow at the same pace. The companies that succeed do not look for the cheapest employer of record. They review the full cost. They study the labour laws of each country. They check the quality of the employee record management system.
A low monthly fee that excludes record software may feel attractive. Later it creates hidden costs. More admin. More penalties. Even disputes. By contrast, a transparent EOR with strong employee records management saves both money and time, while keeping the workforce protected.
The question is not only “What is the cheapest employer of record?” It is “Which EOR and record system provides stability, compliance, and financial control?”
The firms that ask this second question are the ones that make decisions that last.
