Should you use an EOR orform an entity in Connecticut.
Teamed lets you hire in Connecticut today without forming an entity, then converts to your own company when you're ready.
At a glance
Connecticut's entity costs versus EOR
Forming a domestic LLC or corporation in Connecticut costs $120 to register with the Secretary of the State, and the company then owes a flat 7.5% corporate income tax plus a 10.0% surcharge on top of that liability, with a minimum franchise tax of $250 due even in a loss year. An employer of record sidesteps all of that, since Teamed already holds the registrations and simply adds your hire to existing payroll.
- Corporate income tax
- 7.5%
- Additional surcharge
- 10.0%
- Minimum franchise tax
- $250
- Franchise tax basis
- flat
- Formation / registration fee
- $120
Forming an entity here
The cost of setting up in Connecticut
Registering a domestic LLC or corporation with the Connecticut Secretary of the State costs $120. Once formed, the company owes Connecticut's corporate business tax, a flat 7.5% on net income, plus an additional 10.0% surcharge on top of that liability. Even a company with no profit yet still owes the minimum franchise tax of $250, since Connecticut's franchise tax is a flat charge rather than one tied to assets or shares.
Beyond the state filing, you'll need a registered agent, a state tax ID, and enrollment in Connecticut's unemployment insurance system before you can legally run payroll. None of that is free, and none of it happens overnight, expect weeks of paperwork before your first hire can start.
Hiring through Teamed
What an employer of record changes
An employer of record already holds the registrations Connecticut requires, so your new hire starts on payroll within days, not the weeks a fresh entity setup takes. Teamed becomes the legal employer, you keep hiring and managing the work, and Connecticut's tax filings, withholding, and franchise tax bill become Teamed's obligation, not yours.
For a first hire or a small team, that trade usually beats carrying a $120 formation fee, a $250 minimum franchise tax, and ongoing corporate tax filings for a business that isn't generating Connecticut revenue yet.
Choosing between them
Where the line actually falls
There's no fixed headcount where an entity suddenly becomes cheaper than an EOR, it depends on salaries, how many people you're hiring, and how long you plan to stay in Connecticut. Run the numbers through the crossover calculator before you commit to either path, it accounts for the state's actual formation fee and franchise tax rather than a generic guess.
Before you commit
Sometimes an employer of record is the better fit
An employer of record is often the right long-term answer too, not just a bridge, especially for a small or still-changing team, or when you're testing whether Connecticut is even the right market. Talk to a member of the team about your specific plan, and run the crossover calculator if you want to see the numbers side by side.
Contractors, employer of record and your own entity all run on one platform at Teamed, so moving between them later does not mean changing provider or re-onboarding anybody. Real HR and legal experts handle the work rather than a ticket queue.
Talk to a member of the team and we will tell you plainly which one suits where you are. If you would rather look at the numbers yourself first, the crossover calculator models it on local salaries and employer costs rather than on a headcount rule of thumb.
Who carries it
Your own entity, when it's time. We set it up, migrate you in, and hand it back intact.
Global Entity and Employment Operations, which we call GEMO, is how Teamed forms your company, registers it for tax and payroll, runs it month to month and keeps its filings current, across 100+ countries. You stay the employer. We do the work behind it.
In Connecticut that means registering the entity with the Secretary of the State for the $120 filing fee, getting the corporation set up for the state's 7.5% corporate income tax and 10.0% surcharge, and making sure the $250 minimum franchise tax is budgeted for from day one, all before we hand the keys back to you.
They set up our EU entity and moved hires across without missing a payroll.
Questions
Connecticut EOR and entity questions
Do I need a Connecticut entity to hire one employee there?
No. Teamed can employ that person on your behalf as an employer of record, so you skip the $120 formation fee and the ongoing franchise tax and corporate income tax filings that come with owning a Connecticut entity.
What does it cost to form a company in Connecticut?
The Connecticut Secretary of the State charges $120 to register a domestic LLC or corporation. Once running, the company also owes Connecticut's corporate income tax at 7.5%, an additional 10.0% surcharge, and a minimum franchise tax of $250 even in a year with no profit.
How is Connecticut's franchise tax calculated?
Connecticut's franchise tax is a flat charge rather than one based on assets, shares, or income, with a minimum of $250. That flat structure means a newly formed company owes the same minimum regardless of how small its first year of operations is.
When does it make sense to convert from EOR to our own entity?
It depends on your salaries, headcount, and how long you plan to stay in Connecticut, not a fixed number of employees. Run the crossover calculator to compare Teamed's EOR fees against the state's actual formation fee and franchise tax before deciding.
Does Teamed help set up the entity later?
Yes. Through GEMO, Teamed registers the Connecticut entity, handles the tax setup, and migrates your employees onto its payroll intact, then hands you full control.
Where these figures come from
Sources
These figures come from the Connecticut Department of Revenue Services' CT-1120 corporation business tax instructions and the Connecticut Secretary of the State's domestic LLC forms and fees.
Looking for a job in Eor Vs Entity yourself? Teamed does not hire people directly. Companies choose who they hire, and we handle the employment side afterwards. Here is why we cannot help with your search.