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The three routes in one table
| Employer of record (EOR) | Contractor | Own entity | |
|---|---|---|---|
| Who is the legal employer | The EOR provider in that country | Nobody: a business-to-business contract | Your local subsidiary |
| Time to start | Days to a few weeks | Days | Usually months (registration, bank, tax, payroll) |
| Mandatory employer contributions | Yes, paid via the EOR | No (the contractor pays their own) | Yes, paid by your entity |
| Extra fees | Monthly fee per employee | Optional platform fee | Setup plus yearly accounting, payroll and filings |
| Benefits and protections | Full local employment rights | None by default | Full local employment rights |
| Main risk | Cost at scale | Misclassification if the work looks like employment | Fixed overhead, corporate tax presence |
| Typically fits | 1 to roughly a handful of staff per country | Genuinely independent, project-based work | A long-term team in one country |
How the calculator works
- EOR: salary plus that country's mandatory employer contributions (cited per country) plus the EOR fee, for each year.
- Contractor: the rate you pay (salary plus any premium the contractor charges to cover their own taxes and benefits) plus any platform fee. No employer contributions.
- Own entity: salary plus employer contributions, plus your setup quote once and your running-cost quote each year. Leave these blank if you have no quotes yet.
Misclassification: the cost the totals leave out
Treating an employee as a contractor to avoid contributions is the most common way this comparison goes wrong. Tax and labour authorities look at control over how and when work is done, integration into your team, exclusivity, and who supplies tools. If the role fails those tests, back-payments of contributions, penalties and employee claims can far exceed any saving. When in doubt, use an EOR or take local legal advice.
When an entity starts to pay off
An entity has high fixed costs and no per-head fee, so it gets cheaper as headcount grows. Enter your setup and running-cost quotes with the number of years you plan to stay: the calculator shows the point where the entity beats the EOR fee for a single hire. Multiply the EOR fee by headcount to estimate a team.
Frequently asked questions
How much does an employer of record cost?
Deel and Remote both list EOR from $599 per employee per month on their public pricing pages (checked 23 October 2026). Quotes vary by country and contract.
Is a contractor always cheaper?
On paper, often, because no employer contributions are due. But contractors usually charge more to cover their own taxes and benefits, and misclassification risk can wipe out the saving.
Does HireCost earn from these providers?
Not at the time of writing. Provider links are ordinary links; see the disclosure page.