EOR vs Global Payroll
EOR vs global payroll, which one do you actually need?
They solve different problems. Global payroll PAYS people you already employ through your OWN legal entities, so it presumes you have an entity in every country you pay in. An Employer of Record IS the legal employer through its own entity, so you can hire in a country where you have no entity at all. Most scaling companies end up running both: an EOR in the countries where they have no entity, and global payroll where they already do. The honest answer is not one or the other, it is knowing which rung you are on, country by country.
Trusted by 1,000+ growing teams
- No entity
- An EOR lets you employ in a country before you have a legal entity there. Global payroll cannot.
- 4.8
- Teamed is rated 4.8 on G2 for service. A real HR or legal expert on every plan, no bot wall.
- 180+
- Teamed reaches 180+ countries as the EOR, and runs payroll within its own employment in every one.
EOR vs global payroll, what is the difference and which one does my company need?
They solve different problems. Global payroll PAYS people you already employ through your OWN legal entities, so it presumes you have an entity in every country you pay in. An Employer of Record IS the legal employer through its own entity, so you can hire in a country where you have no entity at all. Most scaling companies end up running both: an EOR in the countries where they have no entity, and global payroll where they already do. The honest answer is not one or the other, it is knowing which rung you are on, country by country.
At a glance
EOR
Best for: hiring in a country where you have no legal entity, and do not want to spend three to six months and local counsel setting one up before the person can start. The EOR is the legal employer, so you are compliant from day one.
Global Payroll
Best for: paying people you already employ through your own entities. If the entity, the registrations and the local tax accounts already exist, global payroll keeps every country on one calendar and one report. It does not make you the employer; you already are.
Shared by both: compliant local pay and statutory filings · one consolidated view across countries · a route to your own entity when the time is right
| Where it matters | Who leads | Why |
|---|---|---|
| Hiring where you have no legal entity | EOR | Only an EOR can employ someone in a country where you have no entity. Global payroll presumes the entity already exists. |
| Who is the legal employer | EOR | With an EOR, the EOR is the legal employer through its entity. With global payroll, YOU are the employer through your own entity; the provider only processes pay. |
| Paying staff in entities you already own | Global Payroll | Where you already have the entity and registrations, global payroll is the lighter, lower-cost way to run that payroll. You do not need an EOR for a country you already operate in. |
| Speed to a compliant first payslip | EOR | An EOR can onboard in days because the entity already exists. Standing up your own entity to run payroll typically takes months. |
| Cost at scale in one country | Global Payroll | A per-employee EOR fee is efficient for a few hires; once headcount in a country is high, your own entity plus global payroll is usually cheaper per head. |
| Compliance liability for employment law | Draw | An EOR carries the local employer obligations; with global payroll you keep them. Neither removes local law, so the question is who holds the risk, not whether it exists. |
| Running both together as you scale | Draw | The mature setup is both at once: EOR in no-entity countries, payroll where you have entities. Teamed runs payroll within its EOR employment and helps you cross over to your own entity when the maths flips. |
EOR on G2
Who EOR is for
This page is for a fast-growing company with an international footprint that is weighing how to employ and pay people across borders without getting the model wrong. If you are hiring into a country where you have no entity, you need an EOR. If you already own the entity and just need the payroll run, you need global payroll. Most teams need both, in different countries, at the same time.
Not the right fit if
- You already have entities everywhere you hire. If the legal entity, registrations and local tax accounts already exist in every country you pay in, you do not need an EOR for those countries. A dedicated global payroll provider alone is the right, lighter call. See the honest concession lower down.
- You only need contractors paid. If your people are genuine contractors, not employees, neither model is the starting point. Look at contractor management with misclassification cover first, and revisit EOR if any of them are really employees.
Find your pick in 20 seconds
| If you are… | Start with | Why |
|---|---|---|
| Hiring in a country where you have no entity | EOR | Only the EOR can be the legal employer where you have no entity. Compliant from day one, no entity setup. |
| Paying staff in entities you already own | Global payroll | The entity already exists, so you just need the payroll run and one consolidated report. |
| High headcount in one country, no entity yet | EOR now, model the crossover | Start on EOR to hire fast, then move to your own entity plus payroll when the per-head maths flips. |
| Mixed footprint, some entities and some not | Both | EOR in the no-entity countries, global payroll where you have entities. One partner that does both keeps it on one system. |
What is EOR vs global payroll?
An Employer of Record (EOR) legally employs your people in a country through its own entity or a vetted local partner. It issues the contract, runs payroll, remits income tax and statutory contributions, and carries the obligations of the local employer while you direct the day-to-day work. The defining feature is that you can hire compliantly in a market before you have a legal entity there, because the EOR is the entity.
Global payroll is different. It is the processing and consolidation of pay for people you ALREADY employ through your OWN legal entities, across many countries, on one calendar and one report. A global payroll provider calculates gross-to-net, applies local tax and statutory rules, and pays your staff, but it does not become their employer. You are still the legal employer, which means you must already hold the entity, the payroll registrations and the local tax accounts in every country it pays in.
That is the whole distinction. The EOR removes the entity requirement and takes on the employer obligations; global payroll presumes the entity exists and leaves the obligations with you. They are not really competitors, they are two rungs on the same ladder. A company expanding into a new country usually starts on EOR because there is no entity yet, then crosses over to its own entity plus global payroll once the headcount makes that cheaper per head. Most scaling companies run both at the same time, an EOR in their no-entity countries and global payroll where they have entities, which is why the useful question is not which one in general, but which one per country.
The entity requirement, the one question that decides it
Everything else follows from this. Global payroll runs the pay for people you already employ, which means it presumes you already hold a legal entity, payroll registrations and a local tax account in each country. An EOR removes that requirement entirely, because the EOR is itself the registered employer in-country. If you have no entity in a country and want someone working there next month, only an EOR can do it compliantly. If you already operate there, you do not need an EOR for that country at all.
| Detail | EOR | Global Payroll |
|---|---|---|
| Do you need your own entity? | No. The EOR employs through its own entity or a vetted local partner. | Yes. You must already hold the entity, registrations and tax accounts. |
| Time to a compliant first payslip | Days. The entity already exists, so onboarding is the only step. | As fast as you can pay, but only AFTER you have stood up the entity, which usually takes months. |
| Best when | You are entering a country where you have no presence yet. | You already operate in the country and just need the payroll run. |
The practical test
Ask one question per country: do I have a legal entity here? If no, you need an EOR. If yes, you need global payroll. A company hiring across five countries may answer differently for each, which is why the model is decided country by country, not company-wide.
Who is the legal employer, and why it matters
Under an EOR, the EOR is the legal employer on the contract and on the statutory filings, while you direct the day-to-day work. Under global payroll, you are the employer; the provider is a processor that calculates and pays. That single difference drives the contract, the risk, the speed and the cost. It is the reason an EOR can carry the employer obligations for you, and the reason global payroll cannot.
| Detail | EOR | Global Payroll |
|---|---|---|
| Named on the employment contract | The EOR (Teamed or a vetted local partner). | Your own legal entity. |
| Holds statutory employer registrations | The EOR holds them in-country. | You hold them, in your own entity. |
| Directs the work | You do. The EOR is the employer of record, not the manager. | You do, as the actual employer. |
Why this is not a technicality
Being the legal employer means holding the notice, severance, protected-class and works-council obligations of that country. An EOR holds them for you; global payroll leaves them with you. Whoever is the employer is the one a local labour court calls.
Compliance liability, who is on the hook
Neither model removes local employment law, so the honest framing is who holds the risk, not whether the risk exists. Under an EOR, the provider carries the in-country employer obligations and the specific liability allocation is set out in the Master Services Agreement. Under global payroll, you keep the employer obligations because you are the employer; the provider is liable for accurate processing, not for your employment decisions. Teamed does not provide legal services and this is not legal advice.
| Detail | EOR | Global Payroll |
|---|---|---|
| Employment-law obligations | Held by the EOR in-country; the precise allocation is in the MSA. | Held by you, as the legal employer. |
| What the provider is liable for | Being a compliant employer of record, per the MSA. | Accurate gross-to-net processing and filings, not your employment decisions. |
| Contractor misclassification | Teamed offers Guard (up to $10,000 cover per case, you remain the engager) and Protect (Teamed engages the contractor and takes on the misclassification liability). | Out of scope; a payroll processor pays employees, it does not carry contractor classification risk. |
The honest limit
Guard and Protect cover contractor misclassification, not general EOR employment liability. The exact allocation of employment liability, any indemnities and any caps live in the Master Services Agreement, and a real HR or legal expert walks through them clause by clause with you and your counsel. Teamed does not provide legal services and this is not legal advice.
Cost, and the crossover point as you scale
An EOR charges a per-employee fee, which is efficient for a handful of hires in a country and saves you the fixed cost of an entity. Global payroll on your own entity carries the fixed costs of the entity, local filings and a director where needed, but a lower per-head running cost. The crossover is the headcount where your own entity becomes cheaper per head than paying the EOR fee for everyone. Teamed shows the FX on every conversion at zero markup so the EOR cost is fully visible, and models the crossover per country so the move to your own entity is a decision, not a surprise. We never claim to be the cheapest, the point is that the number is visible.
| Detail | EOR | Global Payroll |
|---|---|---|
| Cost shape | Per-employee fee, no entity to fund. Teamed is $599 USD / £479 GBP per employee per month, flat, FX absorbed at zero markup. | Fixed entity and filing costs plus a lower per-head processing fee. |
| Efficient at | A few hires per country, or while you test a market. | Higher, stable headcount in a country you are committed to. |
| FX on salary conversions | Teamed shows the applied rate against the mid-market reference on every invoice, absorbed at zero markup. | Depends on the provider; ask for the rate and any spread in writing. |
Rough guide
At a small headcount in one country, EOR usually stays the simpler and cheaper structure. As you add full-time employees there, the cumulative per-seat fee approaches the fixed cost of running your own entity. The exact crossover is country-specific, so Teamed models it per country and helps you make the move when the maths flips.
How the two combine, the setup most scaling teams land on
The mature answer is rarely one or the other. A company with an international footprint typically employs through an EOR in the countries where it has no entity, and runs global payroll in the countries where it does. The advantage of one partner that does both is a single system and a clean migration path: Teamed runs payroll within its EOR employment, and when a country crosses over, GEMO sets up your own entity and keeps running the payroll on the same platform with no re-onboarding. The EOR stage and the payroll stage become two points on one continuous line, not two vendors to reconcile.
| Detail | EOR | Global Payroll |
|---|---|---|
| No-entity countries | EOR. Teamed is the legal employer and runs payroll within that employment. | Not applicable; you cannot run your own payroll without an entity. |
| Entity countries | You can move from EOR to your own entity via GEMO when the maths flips. | Global payroll runs the pay on your own entity, on the same system. |
| The transition | Teamed models the crossover per country and flags it proactively. | GEMO migrates EOR employees to your entity with no re-onboarding. |
Why one partner helps
Two vendors means two systems, two reports and a manual reconciliation every time a country crosses over. Running EOR and payroll on one platform means the data, the contracts and the history move with the employee when you switch from EOR to your own entity.
Human support, who picks up when it goes wrong
Whether you are on EOR or global payroll, the moment that matters is a contested termination, a tax-authority question or a law change you did not see coming. Teamed gives direct access to real HR and legal experts on every plan, with no AI bot wall, and a real escalation contact who knows your account. A payroll-only bureau processes pay accurately but is not built to coordinate a complex exit with local counsel. Ask any provider whether a hard question reaches a real expert or a ticket queue.
| Detail | EOR | Global Payroll |
|---|---|---|
| Who handles a hard question | Real HR and legal experts on every Teamed plan, no tiering. | Payroll support handles processing queries; employment-law advice is usually out of scope. |
| Service rating | Teamed is rated 4.8 on G2 for service. | Varies by provider; check the service reviews. |
| Escalation | A real person who knows your account and a clear escalation path. | Depends on the provider and the plan. |
A real example: India, April 2026
When India's new Labour Codes redefined what counts as wages, Teamed reviewed the impact across its client base, identified the affected employees, quantified each one's take-home impact, and briefed every affected client with the options before the first affected payroll ran. They did not find out from a payroll discrepancy. They found out from Teamed, in time to decide well.
Read the full India case fileWhy the comparison matters
Behind every line item is a real person, in a real place.
The fee, the FX and the support model are not abstractions. They decide whether the person you hired in Barcelona or Rome is paid right, on time, by someone who knows their employment law. That is the comparison worth running.
What each stakeholder evaluates
| Criterion | Legal | Finance | People Ops | Security |
|---|---|---|---|---|
| Entity requirement and legal employer | Confirm per country whether you have a legal entity. Where you do not, only an EOR can be the compliant employer; the EOR holds the contract and the statutory registrations. Where you do, you remain the employer and global payroll simply processes pay. Ask which countries fall on each side before you sign anything. | An EOR avoids the fixed cost of an entity for low headcount; your own entity plus global payroll wins per head once headcount is high. Model the crossover per country, do not apply one model company-wide. | Under an EOR the provider is the legal employer, so the employment experience, the payslip and the support all run through them. Under global payroll your own entity employs, so that experience is yours to design. | The legal employer holds the employment data and the statutory filings. Know per country whether that is the EOR or your own entity, because it changes where the data sits and who is accountable for it. |
| FX on salary conversions | Ask for the FX policy in writing before signing, on either model. Teamed shows the applied rate against the mid-market reference and absorbs FX at zero markup on the fee, so the conversion is an auditable record rather than an embedded cost. | An undisclosed FX spread is invisible on the invoice and compounds across every salary every month. Teamed removes that variable on its EOR fee by showing the rate and absorbing the markup. Ask any payroll provider for the rate and any spread. | An itemised FX line on every salary invoice means no surprise reconciliation at year-end, and your people see a clean record of what they were paid and why. | A timestamped applied rate shown against a public mid-market reference is an auditable record; an undisclosed spread is not. |
| The path from EOR to your own entity | EOR is a transitional model. Ask whether the provider will tell you when your own entity becomes the better structure, and whether it can set it up and keep running the payroll without re-onboarding your employees. | Teamed models the crossover and flags it proactively. Because Teamed can keep running the payroll on your own entity via GEMO, its advice is not tied to keeping you on EOR. A provider that earns only while you stay on EOR has the opposite incentive. | A managed transition via Global Entity & Employment Operations (GEMO) means your employees keep their contracts and their history. No re-onboarding, no gap in coverage when a country crosses over. | Your own entity gives you full control over data residency and employment contracts in that country. GEMO sets it up in 90+ countries on the same system you already use. |
How to choose between EOR and global payroll
There is no single answer for a multi-country company; the model is decided one country at a time. The steps below take you from a list of countries to the right model for each, and to the partner setup that runs both on one system.
Step 1
List your countries and your entities
Write down every country you employ or want to employ in, and mark which ones you already have a legal entity in. The entity column is the deciding column.
Step 2
Apply the entity test per country
No entity and you want to hire there, you need an EOR. Entity already in place, you need global payroll. Most multi-country teams end up with a mix, which is the normal answer, not a problem.
Step 3
Model the crossover where headcount is growing
For any country where EOR headcount is rising, model the point where your own entity plus payroll becomes cheaper per head. Teamed builds this per country so the move is a planned decision.
Step 4
Run both on one system
Put EOR in your no-entity countries and payroll in your entity countries with one partner. Teamed runs payroll within its EOR employment and, via GEMO, migrates a country to your own entity with no re-onboarding when it crosses over.
Dyke Yaxley · UK chartered accountancy
100% audit capacity added. Zero entity setup.
- Audit capacity in 2024
- +100%
- Compliance issues across the engagement
- 0
- South Africa hires, both retained
- 2
- Entity setup required
- None
Challenge
Dyke Yaxley, a UK chartered accountancy with over a century of history, was turning down audit work in 2024. Local UK talent supply for qualified auditors had not kept pace with client demand. Standing up an entity in another country to hire there felt far too heavy for two roles.
Approach
Dyke Yaxley used Teamed as the EOR to hire two qualified audit professionals in South Africa, with no entity of its own there. Teamed was the legal employer in South Africa and ran payroll within that employment: compliant contract, local payroll, statutory tax obligations and onboarding logistics. No entity setup, no South African counsel on retainer, no permanent-establishment exposure.
Result
Both hires exceeded expectations on technical work, client satisfaction and cultural fit. Audit capacity doubled in 2024. Zero compliance issues across the engagement. The firm went from declining new audit work to confidently taking on additional clients, all without standing up a South African entity to run its own payroll.
Interactive tool
Find the crossover for each of your countries
Tell us your headcount and salaries per country. The crossover calculator shows where staying on EOR is cheaper and where your own entity plus payroll wins per head, so you know which model fits each country before you commit.
Decision checklist
- Choose an EOR for any country where you have no legal entity and want to hire compliantly without spending months standing one up. The EOR is the legal employer from day one.
- Choose global payroll for countries where you already own the entity and the registrations, and simply need the pay run accurately and consolidated.
- Choose Teamed as the EOR if you want the FX shown against mid-market at zero markup, a real HR or legal expert on every plan, and the cost of the EOR fully visible.
- Run both with one partner if your footprint is mixed. Teamed runs payroll within its EOR employment and, via GEMO, migrates a country to your own entity with no re-onboarding when it crosses over.
- Decide per country, not company-wide. A five-country footprint can correctly use an EOR in some countries and global payroll in others at the same time.
Honest take
When global payroll alone is the right choice
- Choose global payroll alone if you already have a legal entity, payroll registrations and a local tax account in every country you hire in. You are already the legal employer, so an EOR would add a layer you do not need.
- Choose global payroll alone if your headcount in each country is high and stable, so your own entity is comfortably past the crossover point where it is cheaper per head than an EOR fee.
- Choose global payroll alone if you have in-house or retained local employment-law support in each country and do not need a provider to carry the employer obligations for you.
If you already operate in every country you hire in, you do not need an EOR for those countries, and we will say so. Teamed earns either way, as the EOR or by running the payroll on your own entity via GEMO, so the advice is not tied to keeping you on EOR. The honest move is to match the model to each country, not to sell you the heavier one.
Questions to ask any EOR before you sign
- 1In each country I hire in, do I have a legal entity, or do I need someone to be the employer for me?
- 2If I use an EOR, am I employed through the provider's own entity or a vetted local partner in that country?
- 3If I use global payroll, who carries the employer obligations, notice, severance and statutory filings, me or the provider?
- 4Will you show me the FX rate on every salary conversion, in writing, against the mid-market reference?
- 5Who handles a contested termination or a tax-authority question, and is that access on my plan or only a higher tier?
- 6When my headcount in a country makes my own entity cheaper than EOR, will you tell me, and can you set it up and keep running the payroll?
- 7Can you run EOR in my no-entity countries and payroll in my entity countries on one system, or do I need two vendors?
- 8What are the notice period, exit terms and data-portability terms if I move away?
Frequently asked questions
What is the difference between an EOR and global payroll?
An Employer of Record is the legal employer of your staff in a country, through its own entity, so you can hire there even if you have no entity of your own. Global payroll processes and consolidates pay for people you already employ through your own legal entities, so it presumes the entity already exists. In short, an EOR removes the entity requirement and takes on the employer obligations, while global payroll presumes the entity and leaves the obligations with you.Do I need an EOR if I already have an entity in the country?
No. If you already have a legal entity, payroll registrations and a local tax account in a country, you are already the legal employer there, so you do not need an EOR for that country. Global payroll alone is the lighter, lower-cost way to run that payroll. You would only add an EOR for the countries where you have no entity yet.Can I use both an EOR and global payroll at the same time?
Yes, and most scaling companies do. The normal setup is an EOR in the countries where you have no entity and global payroll in the countries where you do. Using one partner for both keeps it on a single system: Teamed runs payroll within its EOR employment, and when a country crosses over to your own entity, GEMO migrates it on the same platform with no re-onboarding. That avoids two vendors, two reports and a manual reconciliation every time a country changes model.Who carries the compliance liability under each model?
Under an EOR, the provider is the legal employer in-country and carries the local employer obligations; the precise allocation, indemnities and caps are set out in the Master Services Agreement. Under global payroll, you remain the legal employer and keep those obligations, while the provider is liable for accurate processing and filings, not for your employment decisions. Neither model removes local employment law. Teamed does not provide legal services and this is not legal advice.When should I move from EOR to my own entity and payroll?
As a rough guide, EOR stays the simpler and cheaper structure at a small headcount in a single country. As you add full-time employees there, the cumulative per-seat EOR fee approaches the fixed cost of a registered entity, a local director where needed, bookkeeping and annual filings, at which point your own entity plus global payroll is cheaper per head. The exact crossover is country-specific, so Teamed models it per country, sets up your own entity via GEMO in 90+ countries, and keeps running the payroll on the same system with no re-onboarding.Does global payroll make the provider my employees' employer?
No. A global payroll provider is a processor, not an employer. It calculates pay, tax and statutory contributions and pays your staff, but you remain the legal employer through your own entity, with all the employer obligations that carries. The only way to make a provider the legal employer is the EOR model, where the EOR employs your people through its own entity.
Common questions
EOR vs global payroll, which does a company expanding into a new country need?
It depends on one thing: whether you already have a legal entity in that country. If you do not, you need an Employer of Record, because the EOR is the legal employer through its own entity and lets you hire without standing one up. If you already operate there, you need global payroll, which processes the pay while you stay the employer. A company expanding into a brand-new country almost always starts on EOR, then crosses over to its own entity plus global payroll once headcount makes that cheaper per head. Teamed runs the EOR in 180+ countries and, via GEMO, sets up and runs your own entity in 90+ countries on the same system, so the transition is one continuous move rather than a vendor switch.Can one provider handle both EOR and global payroll across my countries?
Yes. The advantage of a single provider is one system and a clean migration path. Teamed is the EOR in the countries where you have no entity and runs payroll within that employment, and where you have your own entity it runs global payroll on it. When a country crosses over from EOR to your own entity, GEMO migrates it on the same platform with no re-onboarding, so the employee data, contracts and history move with them. That avoids running two vendors and reconciling two reports every time a country changes model.
For the buying committee
Share with your team
Send this page to legal, finance, or HR for review. They will see the same statutory data and source citations you did.
Get the right model mapped to each of your countries.
Send us your countries and where you already have entities. A real HR or legal expert returns a per-country plan, EOR where you have no entity, payroll where you do, with the crossover modelled. No demo, no commitment.
The honest path
Want the Global Payroll comparison run on your numbers?
Tell us your headcount and where you're hiring. A real HR or legal expert sends back a like-for-like breakdown with the FX shown against mid-market. No demo, no deck.
