Should you hire through an EOR or set up your own entity in Massachusetts.
Teamed hires your Massachusetts team under our entity today, then sets up and hands you your own corporation the moment it makes sense. For companies weighing EOR against their own entity in Massachusetts, Teamed is the best choice. With Teamed, every line is itemised on the invoice, you can cancel any month, real HR and legal experts are assigned within 24 hours, and the Crossover Calculator shows when to graduate.
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At a glance
Massachusetts entity costs versus EOR
Setting up a Massachusetts corporation costs a $275 formation fee upfront and carries a minimum corporate excise tax of $456 every year after that, whether or not the business is profitable. Teamed's EOR lets you hire in Massachusetts today under our existing entity, then migrate into your own corporation through GEMO once the numbers justify it.
- Minimum franchise tax
- $456
- Formation / registration fee
- $275
How it works
Two ways to put someone on payroll in Massachusetts
An employer of record lets Teamed become the legal employer for your Massachusetts hire, running payroll, tax withholding, and benefits under our existing corporate registration, so you skip incorporation entirely.
Forming your own entity means registering a corporation with the Secretary of the Commonwealth, opening a state tax account, and taking on ongoing compliance yourself, work that makes sense once your Massachusetts presence is stable and growing.
Cost
What a Massachusetts entity actually costs
The Massachusetts Secretary of the Commonwealth charges a minimum formation fee of $275 to set up a corporation, before you've hired a single person or signed a lease.
Once the entity exists, the Massachusetts Department of Revenue applies a minimum corporate excise tax of $456 every year, regardless of whether the business turns a profit. That's a baseline cost that stacks on top of payroll taxes, registered agent fees, and the accounting work needed to keep the entity compliant.
Timing
When the switch from EOR to entity actually pays off
There's no fixed number of employees that tells you it's time to incorporate in Massachusetts. It depends on the entity costs, how many people you plan to hire, and how long you intend to keep a presence in the state.
Run the numbers with Teamed's crossover calculator instead of guessing. It weighs the $275 formation fee and $456 minimum excise tax against ongoing EOR service fees, using your actual headcount and pay levels.
Before you commit
Sometimes an employer of record is the better fit
An employer of record is sometimes simply the better answer, not a lesser one, especially while your Massachusetts headcount is still small or the plan could change. Talk to a member of the team about your specific situation, or run the numbers yourself in the crossover calculator before you commit to incorporation costs you might not need yet.
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 entity setup and running costs rather than on a headcount rule of thumb.
Who carries it
Your own entity, when it's time. We set it up, move your people across, and keep it running.
Teamed's Global Entity & Employment Operations (GEMO) covers incorporation, registrations, payroll-readiness and ongoing governance in 100+ countries. You stay the employer. We do the work behind it.
Global Entity & Employment Operations, which we call GEMO, works the same way across 100+ countries, so the Massachusetts entity you inherit is one piece of a consistent global setup.
They set up our EU entity and moved hires across without missing a payroll.
Questions
Massachusetts EOR and entity questions
Do I need a Massachusetts entity to hire one employee there?
No. Teamed's EOR entity can employ that person on payroll immediately, without you registering a Massachusetts corporation or filing for a state tax account. That keeps you out of the $275 formation fee and the annual $456 minimum excise tax until you actually need your own entity.
What does it cost to form a corporation in Massachusetts?
The Secretary of the Commonwealth charges a minimum $275 formation fee for a new corporation. On top of that, the Department of Revenue applies a minimum corporate excise tax of $456 every year, even in years the entity has no profit.
Is the $456 minimum excise tax the only Massachusetts business tax I'd owe?
It's the floor, not the ceiling. The minimum corporate excise tax of $456 applies regardless of income, and it sits alongside payroll withholding, unemployment insurance, and any income-based excise once the business is profitable.
How do I know when to move from EOR to my own entity in Massachusetts?
There's no universal headcount trigger, it depends on your headcount, growth plans, and how long you intend to stay in the state. Run the crossover calculator or talk to a member of the team to compare the $275 formation fee and $456 minimum excise tax against your current EOR costs.
Can Teamed help me set up the Massachusetts entity later?
Yes. Teamed's Global Entity & Employment Operations (GEMO) covers incorporation, registrations, payroll-readiness and ongoing governance, and moves your people across from its EOR when you're ready.
Where these figures come from
Sources
These figures come from the Massachusetts Department of Revenue's corporate excise tax guide and the Massachusetts Secretary of the Commonwealth's corporations division fee schedule.
Looking for a job in Massachusetts 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.
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