Overview
The Employer of Record (EOR) model allows companies to hire and pay employees in countries where they do not have a local legal entity. Under this arrangement, the EOR is the legal employer for administrative and compliance purposes, while the client company directs the employee’s day-to-day work and responsibilities.
This article explains how the model works and clarifies the roles and responsibilities of each party.
How the EOR Model Works
When an employee is hired through an EOR:
The EOR employs the individual locally
The client company manages the employee’s daily work
The employee performs services for the client company
Payroll, taxes, and statutory compliance are handled locally by the EOR
This structure allows companies to expand globally without establishing local entities.
Roles & Responsibilities
Employer of Record Responsibilities
The EOR manages employment-related administrative and legal obligations, including:
Employment Administration
Issuing compliant employment agreements
Maintaining employment records
Managing onboarding documentation
Payroll & Statutory Compliance
Processing payroll
Withholding and remitting taxes
Managing social contributions
Producing payslips
Benefits & Leave Administration
Providing statutory benefits
Administering required leave policies
Managing mandatory insurance or contributions
Regulatory Compliance
Ensuring employment practices align with local labor laws
Supporting audits or regulatory inquiries
Monitoring legal changes affecting employment
Employment Lifecycle Support
Managing employment changes where applicable
Supporting compliant offboarding processes
Client Company Responsibilities
The company where services are performed maintains operational control over the employee’s work.
Day-to-Day Management
Assigning tasks and projects
Setting work schedules
Supervising performance
Conducting reviews and feedback
Compensation Direction
Determining salary levels
Approving bonuses or variable pay
Requesting compensation changes
Workplace Integration
Providing tools and systems access
Managing training and onboarding
Ensuring team collaboration
Time & Attendance Oversight
Approving time off
Monitoring attendance
Validating time tracking
What This Means for Employees
Employees typically:
Work day-to-day with the client company team
Receive employment administration from the EOR
Access payslips and payroll support through the platform
This dual-structure ensures compliant employment while maintaining operational alignment with the client organization.
Key Takeaway
Area | Managed By |
Legal employment | EOR |
Payroll & taxes | EOR |
Statutory benefits | EOR |
Daily work direction | Client Company |
Performance management | Client Company |
Project responsibilities | Client Company |
Need More Help?
If you have questions about your specific employment arrangement:
Contact support through our in-app chat or by emailing [email protected]
Browse related Help Centre resources
Reach out to your HR or manager for role-specific guidance