Glossary
Global employment,
in plain English.
Clear definitions of the Employer of Record, payroll, benefits and compliance terms you meet when you hire abroad. No jargon, sources cited.
15 terms
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- Employer of Record (EOR)An Employer of Record (EOR) is a third-party organisation that becomes the legal employer of your workers in a given country, handling payroll, tax, benefits and compliance whilst you direct their day-to-day work.
- EOR vs PEOAn Employer of Record (EOR) becomes your workers' sole legal employer in a new country; a Professional Employer Organisation (PEO) shares employment responsibilities alongside your own existing legal entity.
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- Independent contractor vs employeeAn independent contractor is self-employed and hired for specific work, while an employee works under an employer's direction, receives statutory benefits, and has payroll taxes withheld on their behalf.
- IR35IR35 is the UK's off-payroll working legislation, which requires medium and large businesses to assess whether contractors working through their own companies should be taxed as employees.
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- Payroll deductionsAmounts withheld from an employee's gross pay each pay period, covering mandatory statutory obligations such as income tax and social insurance, plus any voluntary amounts the employee has consented to.
- Permanent establishment (PE) riskPermanent establishment (PE) risk is the danger that a company's activity in a foreign country creates a taxable presence there, exposing it to local corporate tax obligations it did not plan for.
- Probation periodA probation period is a defined trial phase at the start of employment, during which either party can end the contract with shorter notice than usual, subject to local law.
- Professional Employer Organisation (PEO)A Professional Employer Organisation (PEO) is a firm that shares employment responsibilities with a client company through a co-employment contract, handling payroll, HR and benefits while the client retains day-to-day control of its workforce.
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- Severance paySeverance pay is a payment made to an employee when their employment ends, typically covering termination without cause. Entitlements and calculation methods vary significantly by country and employment contract.
- Statutory benefitsStatutory benefits are the minimum entitlements employers must give every worker by law, covering things like paid leave, sick pay, and pension contributions. The exact rules differ country by country.
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Glossary
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