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Most companies comparing Employer of Record quotes start by lining up the headline prices. Provider A charges $599 a month. Provider B charges 10% of salary. Provider C is somewhere in between. It looks like a simple price comparison.
It isn't, and treating it as one is how companies end up with invoices that look nothing like the quote they signed. The EOR fee is only one line on the invoice. Gross salary, employer payroll taxes, statutory contributions, and benefits sit alongside it, and the EOR doesn't set any of them. Then there are onboarding charges, security deposits, currency conversion margins, and termination fees, which rarely appear on a pricing page.
This guide explains what an EOR fee covers and what it doesn't, the main pricing models, the extra costs to check before you sign, and the questions that will get you quotes you can actually compare.
EOR Pricing at a Glance
| Question | Short Answer |
|---|---|
| What does the EOR fee cover? | The service itself: contracts, payroll, tax filing, compliance, and the employment responsibilities the EOR takes on |
| What doesn't it cover? | Gross salary, employer taxes and statutory contributions, and most benefits |
| What's a typical flat fee? | Roughly $199 to $1,000+ per employee per month. Many established providers list prices in the $400 to $700 range |
| What's a typical percentage fee? | Roughly 5% to 15% of gross salary, most often 8% to 10% |
| How much do employer taxes and contributions add? | Anywhere from under 10% to 40% of gross salary, depending on the country |
| What hidden costs should I check? | Onboarding fees, deposits, FX markups, termination fees, minimum commitments, and benefits markups |
| Is an EOR always cheaper than a local entity? | Usually, until you have a large team in one country, often somewhere around 10 to 20 employees |
What an EOR Fee Covers
You're not paying for "access" to a country. You're paying the EOR to take on a specific set of legal and administrative work for you.
| Included in the Fee | What It Means in Practice |
|---|---|
| Legal employment | The EOR employs the person through its own local entity, so you don't need one |
| Compliant contracts | Employment contracts written to fit local labour law, language, and required clauses |
| Payroll | Calculating and running payroll correctly for that country's rules and pay cycle |
| Tax withholding and filing | Withholding the correct income tax and filing it with the local authorities |
| Statutory benefits | Enrolling the employee in the required social security, pension, and insurance schemes |
| Ongoing compliance | Tracking changes to local employment law and updating contracts and payroll to match |
| Employer responsibility | Acting as the legal employer, with the obligations that come with it |
On that last row, the EOR takes on the legal employer role, but the risk is rarely transferred entirely. Most EOR contracts make you responsible for things you control, such as how the employee is managed day to day, and many include indemnities in both directions. Read that section of the contract as carefully as the pricing.
Providers also bundle slightly different things into the base fee. Some include termination handling, background checks, or equipment. Others charge for them separately. That's why an itemised quote tells you more than the headline price.
What the EOR Fee Doesn't Cover
(Insert infographic here: "What is actually inside a monthly EOR invoice", attached separately as eor-invoice-breakdown-2026.png)
Gross salary, employer payroll taxes and statutory contributions, and most benefits costs are separate from the service fee. The EOR pays them on your behalf and passes the cost on to you. Most reputable providers pass statutory costs through at cost, but some add a margin to benefits or currency conversion, so check.
| Cost | Who Sets It | Typical Size |
|---|---|---|
| Gross salary | You and the employee | Whatever you agree for the role |
| Employer taxes and statutory contributions | Local law | From under 10% to around 40% of gross salary, depending on the country |
| Benefits | The law sets the minimum. You decide on anything extra | Varies widely, often billed at cost |
| EOR service fee | The provider | Roughly $199 to $1,000+ a month flat, or 5% to 15% of salary |
This is the most useful thing to understand before you ask for a quote. A provider's fee can look cheap while the total cost of a hire is still high, because the country, not the provider, drives most of the number.
The Country Often Matters More Than the Provider
Employer on-costs vary enormously between countries, and the difference is usually far bigger than the gap between one EOR's fee and another's. Rates below are approximate for 2026. Most countries cap contributions at a salary ceiling, so the effective rate falls for high earners.
| Country | Approximate Employer Statutory On-Cost (% of Gross Salary) |
|---|---|
| United States | About 7.65% (Social Security and Medicare), plus federal and state unemployment taxes. Health insurance is extra and often significant |
| Philippines | Around 13% to 15% for SSS, PhilHealth, and Pag-IBIG, with caps. A mandatory 13th-month salary adds another 8.3% |
| India | Around 12% to 17%, including Provident Fund, ESI where it applies, and gratuity accrual, depending on how pay is structured |
| United Kingdom | 15% employer National Insurance above £5,000 a year, plus at least 3% workplace pension |
| Malaysia | Around 13% to 15% for EPF, SOCSO, and EIS |
| Singapore | Up to 17% CPF for citizens and permanent residents (lower for older employees, none for foreigners on work passes), plus a small skills levy |
| China | Around 30% to 40% for social insurance and the housing fund, depending on the city |
If two EOR providers charge similar fees, hiring in China instead of the Philippines will move your total cost far more than which provider you choose. Check the country costs before you assume a cheaper-looking provider means a cheaper hire.
The Three Ways EOR Providers Price Their Fee
| Model | How It Works | Best Fit |
|---|---|---|
| Flat monthly fee | The same fee whatever the salary, commonly $199 to $1,000+ per employee per month | Mid-level, senior, and higher-paid hires |
| Percentage of salary | A share of gross monthly salary, commonly 5% to 15%, most often 8% to 10% | Junior hires in lower-salary markets |
| Custom or blended | A base fee plus add-ons, negotiated for volume or complexity | Larger teams or specific service needs |
To find the salary where a flat fee and a percentage fee cost the same, divide the flat fee by the percentage. A $599 flat fee against an 8% rate breaks even at about $7,488 a month in gross salary. Below that, the percentage fee is usually cheaper. Above it, the flat fee usually is. Percentage fees also rise automatically with every pay rise and bonus, while a flat fee doesn't. Our guide to flat-fee versus percentage-based EOR pricing works through more examples across salary bands.
Why the Headline Price Can Mislead
EOR pricing is a structure, not a single number, so headline prices from different models can't be compared directly. A $199 flat fee and a $599 flat fee are easy to compare. A $199 flat fee and a 10% fee aren't, until you model them against real salaries and headcount.
Currency conversion is a good example of how a small detail changes the picture. A 2% FX margin on a $100,000 salary adds about $2,000 a year that never shows up in the advertised fee. Across a team, that can shrink or even reverse the gap between a "cheap" and an "expensive" provider once you add FX, onboarding fees, and benefits markups to both sides.
The fix is simple. Ask for an itemised quote based on your actual headcount, salaries, and countries, and model the total cost over at least a year, not just the monthly rate.
Hidden and Extra Costs to Watch For
These costs usually don't appear in the advertised per-employee rate. They show up on the invoice or in the contract's small print. Ranges are indicative and vary by provider and country.
| Cost | Typical Range | Notes |
|---|---|---|
| Onboarding or setup fee | Roughly $300 to $750 per employee, sometimes more for complex countries | Usually charged once per new hire |
| Security deposit or prepayment | One to three months of payroll costs | Usually refundable, but ties up cash |
| FX or currency conversion markup | Roughly 1% to 3% of the amount converted | Applies whenever the provider converts currency to pay the employee |
| Termination or offboarding fee | Roughly $200 to $500 per employee | Some contracts also charge one to three months' fees if you end the contract early |
| Minimum monthly fee or commitment | Varies | Can still apply if headcount drops or a role sits empty |
| Benefits markup | A percentage on top of the benefit's actual cost | Ask whether benefits are billed at cost |
| Equipment | Cost of the equipment plus a handling fee | Relevant if the EOR buys laptops or other hardware |
| Background checks | Roughly $50 to $200 per employee | Sometimes part of onboarding, sometimes billed separately |
Note that statutory severance is a cost of ending employment, not an EOR fee. In many countries you'll have to pay it whichever provider you use, so check what the law requires in each country before you hire.
Questions to Ask Any EOR Provider Before You Sign
| Question | Why It Matters |
|---|---|
| What exactly does the fee include? | Shows whether contracts, payroll, benefits administration, and compliance are all covered or priced separately |
| Is there a setup or onboarding fee, per employee or per country? | Setup fees can add hundreds of dollars per hire |
| What does it cost when an employee leaves? | Termination and offboarding fees are common and rarely advertised |
| Do you invoice in USD or local currency, and what FX margin applies? | A 1% to 3% margin adds up quickly across a team |
| Is there a minimum contract length or headcount? | Affects flexibility if hiring plans change |
| Are statutory contributions and benefits billed at cost or with a markup? | Shows whether pass-through costs really are passed through unchanged |
| Do you charge extra for equipment, background checks, or visa support? | These are often billed as add-ons |
| Do you need a deposit or prepayment, and when is it refunded? | Affects cash flow, especially for smaller companies |
| Can you send a sample itemised invoice before we sign? | The best way to compare providers on equal terms |
| What triggers a price increase, and how much notice do you give? | Protects you from surprises at renewal |
| How is liability split between us in the contract? | Tells you how much risk you're really transferring |
EOR vs Setting Up a Local Entity
Pricing an EOR on its own only answers half the question. The other half is whether an EOR is the right setup at all, compared with setting up your own entity.
| EOR | Local Entity | |
|---|---|---|
| Upfront cost | Little or none beyond any onboarding fees | Often thousands to tens of thousands of dollars |
| Time to first hire | Usually days to a few weeks | Weeks to several months, depending on the country |
| How costs scale | Per employee, rising with headcount | Mostly fixed overhead (accounting, legal, office, local directors), spread across the team |
| Best fit | Small teams, testing a market, hiring fast | Larger, long-term teams in one country |
As a rough guide, an EOR is usually cheaper and faster until you have around 10 to 20 employees in a single country. At that point an entity's fixed costs may start to pay off. The tipping point depends heavily on the market. In countries where an entity is expensive to set up and run, or where local rules limit how EORs operate, it can come earlier or later. Our guide to EOR versus setting up a local entity covers the numbers country by country.
Summary
An EOR fee isn't the full cost of an international hire, and it isn't meant to be. It pays for legal employment, payroll, compliance, and taking on the employer role. The rest of the invoice, including salary, employer taxes, contributions, and benefits, depends mostly on the country, not the provider. The real surprises in EOR pricing are the costs that don't appear on the pricing page: onboarding fees, deposits, FX margins, and termination charges that you often only find out about after you've signed.
To avoid them, ask for a sample itemised invoice before you sign, model the total cost using your real headcount and salaries, and get the costs of onboarding and termination confirmed in writing.
Comparing EOR Pricing for Your Next Hire?
Slasify gives you transparent, itemised EOR pricing with no surprise onboarding fees, security deposits, or hidden FX markups, so you can see the full cost of a hire before you commit. Talk to our team for a country-specific quote.
FAQs
1. How much does an Employer of Record cost?
EOR fees typically run from about $199 to $1,000+ per employee per month on a flat fee, or 5% to 15% of gross salary on a percentage fee. On top of that you pay the employee's salary and the employer taxes and contributions, which range from under 10% to around 40% of gross salary depending on the country.
2. What does an EOR fee include?
Legal employment through the provider's local entity, a compliant local employment contract, payroll, tax withholding and filing, statutory benefits administration, and ongoing compliance monitoring. What else is included, such as onboarding, offboarding, or equipment, varies by provider.
3. Does the EOR fee include the employee's salary and taxes?
No. Gross salary, employer payroll taxes, statutory contributions, and most benefits are separate lines on the invoice, set by your offer and by local law. You pay the service fee on top of them.
4. What hidden fees should I ask an EOR provider about?
Onboarding or setup fees, security deposits or prepayments, currency conversion margins (often 1% to 3%), termination or offboarding fees, minimum commitments, and benefits markups. Ask for an itemised quote before you sign.
5. Is a flat fee or a percentage fee cheaper?
It depends on salary. Divide the flat fee by the percentage rate to find the break-even salary. Below it, the percentage fee is usually cheaper. Above it, the flat fee usually is. Junior hires in lower-cost markets often cost less on a percentage fee, and senior or well-paid hires on a flat fee.
6. How much does an EOR cost in Asia?
EOR fees themselves don't differ much by region, but employer costs do. Employer contributions are around 13% to 15% in Malaysia and up to 17% in Singapore for local employees. In China they're 30% to 40%. Philippine employers also pay a mandatory 13th-month salary, and Indian employers accrue gratuity. Always compare the total monthly cost for each country, not just the fee.
7. Is using an EOR cheaper than setting up a local entity?
Usually, for a small team or a short time frame, because you avoid setup costs and fixed overhead. A local entity can become cheaper per employee once you have a larger team in that country, often somewhere around 10 to 20 employees, because its overhead is spread across more people.