Your own US entityor an employer of record.
Your own entity gives you direct employment, your own benefits and no per employee fee. It costs filings in every state you hire in. Teamed runs either, and the move between them.
What an entity gives you
Start with what the company actually buys
This decision is usually presented as a comparison, which is the wrong way round. An entity is a thing you either want or do not want, and the honest way to decide is to look at what it gives you and what it asks of you. If the answer is that you want it, the comparison is academic. If it is not, no arithmetic will make it a good idea.
- Direct employment
- Your contracts, your handbook, your benefits
- Per employee fee
- None, once the entity runs
- Delaware annual minimum
- $225 for a corporation, $400 for an LLC
- State registrations
- One per state where somebody works
- Delaware corporate income tax
- 8.7%, only if you do business in Delaware
- Reversibility
- Low. Registrations are easier to open than to close
The case for it
What owning the entity changes
You become the employer. People sign your contract, sit under your handbook, join your benefit plans and appear in your systems as your staff rather than somebody else's. For a team that is becoming a real part of the business rather than an experiment, that matters more than most of the arguments made about cost.
The financial picture changes shape too. There is no per employee fee, so the cost stops scaling with headcount and becomes a set of fixed obligations instead. Delaware's own annual bill is small, $225 for a corporation or $400 for an LLC, and the substantial costs live elsewhere, in the state registrations and in whoever keeps them current.
You also get control of things that are awkward to arrange through anybody else. Equity for employees, your own benefits design, and the ability to do something unusual because you decided to rather than because a provider's platform allows it.
The case against it
What it asks of you in return
The obligation is not the company. It is the states. Every state where somebody works wants an employer registration, a withholding account where that state has income tax, and an unemployment insurance account, each with its own deadlines and its own way of being annoying.
That work scales with geography rather than headcount, which is the calculation people get wrong. Fifteen people in one state is a modest administrative load. Five people in five states is five sets of everything, and it grows every time somebody moves house.
It is also close to irreversible in practice. Registrations are much easier to open than to close, and an entity that has employed people leaves a filing trail that continues after the last person has left.
How to actually decide
The question worth asking instead
Not how many people you have. The thing that decides this is whether the United States is somewhere you intend to be for years, and whether the work you need from an entity, equity, your own benefits, direct employment, is work you actually need.
Where it is genuinely a cost question, it depends on what you pay people, what employer costs look like in the states they sit in, and how long you plan to stay. Those three move the answer far more than headcount does, which is why we point people at a calculator that uses them rather than quoting a number of employees.
If you are unsure, that is usually itself the answer. An entity rewards certainty and punishes hedging, and staying on an employer of record for another two quarters costs far less than opening registrations you then have to unwind.
Before you commit
Sometimes an employer of record is the better fit
An employer of record is often the better answer, and it is a fair one rather than a lesser one. If the group in the United States is small, still changing shape, spread across several states, or testing whether the market works at all, it holds the registrations in each state so you do not have to. It is also reversible, which an entity is not.
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.
Teamed runs both, which is why we have no reason to push you toward the larger piece of work. Our American entity is Teamed US Inc., a Delaware corporation, so the filings and registrations behind either answer are ones our own team already makes.
They set up our EU entity and moved hires across without missing a payroll.
Questions
Questions people ask when deciding
Is an entity cheaper than an employer of record?
It depends on what you pay people, the employer costs in the states they work in, and how long you intend to stay. There is no headcount at which it flips, because the inputs differ by state and by salary. The crossover calculator models it on those inputs rather than on a rule of thumb.
What does a US entity cost to keep open?
A Delaware corporation costs $225 a year at minimum and an LLC $400, plus a registered agent whose fee the state does not set. The larger cost is the state employer registrations, one set for every state where somebody works, and the person who keeps them current.
Can we switch back to an employer of record later?
In practice, rarely. You can stop employing through the entity, but registrations are much easier to open than to close and a company that has employed people keeps filing obligations afterwards. Treat the move as one directional when you plan it.
Do we need an entity to give employees equity?
It is considerably easier with one. Equity is granted by the employer, so granting it to people employed by somebody else is awkward and often the single reason a team moves to its own entity.
How many employees before we need our own entity?
There is no such number, and anyone quoting one is guessing. Whether an entity makes sense depends on salaries, state employer costs and how long you plan to stay, not on a headcount.
Where these figures come from
Sources
Delaware annual figures were read from the Delaware Division of Corporations annual report and franchise tax instructions and the 8.7% rate from the Division of Revenue on 17 September 2026. Employer of record pricing and state registration requirements are described in general terms rather than as figures.
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.