Employer of Record (EOR)

An Employer of Record (EOR) is a third-party company that serves as the legal employer of a worker on behalf of another business. While the client company directs the employee’s daily tasks and performance, the EOR assumes full responsibility for payroll, taxes, statutory benefits, employment contracts, and legal compliance in the worker’s country. It is also commonly referred to as a Global PEO (Professional Employer Organization).

Roles and Responsibilities of an Employer of Record (EOR)

• Acts as the Legal Employer
  The Employer of Record (EOR) is recognized as the legal employer of the worker for tax, compliance, and labor law purposes—while the client company oversees day-to-day work.


• Manages Payroll Processing
  The EOR is responsible for running compliant payroll, ensuring accurate salary calculations, timely payments, and adherence to local tax and labor regulations.


• Administers Statutory Benefits
  The Employer of Record (EOR) handles enrollment and administration of mandatory benefits such as health insurance, paid leave, social security, and pension contributions, based on local laws.


• Handles Tax Withholding and Filing
  The EOR ensures correct deduction of income taxes and social security contributions and submits all required filings to local tax authorities on time.


• Drafts and Issues Employment Contracts
  The Employer of Record (EOR) prepares legally compliant employment agreements in the employee’s country, covering terms like compensation, probation, notice period, and entitlements.


• Ensures Labor Law Compliance
  The EOR continuously monitors local employment regulations to ensure compliance and mitigate the risk of penalties, disputes, or non-compliance issues.


• Manages Employee Onboarding and Offboarding
  The Employer of Record (EOR) oversees compliant onboarding processes including documentation, setup, and background checks, and handles terminations or resignations in accordance with local laws.


• Supports Work Permits and Immigration (if applicable)
  In countries where permitted, the EOR may help secure work permits or visas for foreign employees, ensuring all employment remains legally valid.


• Provides Ongoing HR Support
  The EOR offers support for HR tasks such as performance reviews, dispute resolution, disciplinary actions, and workplace policies—ensuring local alignment.


• Maintains Employment Records
  The Employer of Record (EOR) securely stores and manages employee documentation, payroll records, and contracts in accordance with data protection and labor regulations.