At what headcount should we open our own entity instead of staying on EOR?

Country-dependent — typically 15–25 employees in a single country at average salary. Run the calculator with your real numbers. Distributed teams (1–2 per country) often stay on EOR past that threshold because entity overhead doesn't amortise.

What does the breakeven actually depend on?

Salary + statutory cancel (same on both sides). Breakeven depends on the EOR fee vs entity payroll service spread, plus fixed overhead (accountancy, compliance, formation) the headcount has to amortise.

What costs am I missing if I only compare headline EOR fees?

Three hidden lines: FX markup (1.5–3% undisclosed, ~$2,850–$5,700/yr per $190K employee), setup/exit fees, out-of-scope charges. Use /tools/unbundling-calculator to surface FX on your current invoice. Teamed itemises all three.

How accurate is the breakeven for my specific situation?

Defaults are typical all-in cost ranges from Teamed operations and OECD data. Real breakeven depends on salary mix, benefits load, statutory specifics, and operational factors (hiring speed, works councils, severance). Book a working session for your exact number.

Tool · Crossover Calculator

See your crossover point.

Pick a country, your headcount in it, and your average salary. The calculator returns your per-employee EOR cost, projected entity cost, year-1 formation hit, and the steady-state annual saving once you graduate. The salary cancels in the breakeven — so the breakeven headcount is the number you actually need to manage.

Talk to a Specialist Audit my current EOR invoice instead →

When does it stop making sense to use an EOR and start making sense to set up your own entity?

When your headcount in a single country crosses the point where the per-employee EOR fee saving exceeds the fixed overhead of running your own entity (formation amortised + ongoing accountancy + compliance). For most countries, breakeven lands between 2 and 12 employees per country. Run the calculator to see your number.

What is Crossover headcount?

The headcount in a single country at which the all-in cost of an Employer-of-Record arrangement equals the all-in cost of running your own legal entity. Below the crossover, EOR is cheaper. Above it, entity is cheaper. The number depends on the country's formation cost, ongoing accountancy and compliance overhead, and the EOR fee — not on the salary you pay each employee.

Verdict

Run the graduation playbook.

At 10 employees in Germany, your own entity costs ~$27,480 less per year (steady state, post-formation). The breakeven sits at headcount 7.

Read the crossover playbook

EOR cost / employee / month: $9,170Salary + statutory + $599 Fixed Rate platform fee
Entity cost / employee / month: $8,941Salary + statutory + payroll + accountancy / headcount
Year-1 entity cost (with formation): $1,097,900One-time formation: $25,000
Steady-state annual saving: +$27,480Year 2 onward, headcount 10

Defaults are illustrative — typical mid-market all-in costs in Germany. Real per-jurisdiction modelling depends on salary mix, benefits load, FX exposure, and statutory specifics this calculator can't infer. Book a working session for the numbers that hit your board pack.

Calculator assumptions

EOR fee anchor: $599 / employee / month — Teamed Fixed Rate USD, matching Deel's Standard headline. The same rate bills at £479 GBP when contracted in pounds; Regional Rate (£400 + 2% FX, cross-border only) is the lower-cost alternative for cross-border payroll.Source: Teamed + Deel headline (2026-05)· verified 2026-05-06
Formation amortisation: 3-year windowSource: Standard finance practice; tunable per business· verified 2026-05-06
Verdict band: ±25% of breakeven = "borderline"Source: Teamed Crossover methodology· verified 2026-05-06
Countries modelled: 8 jurisdictions (UK, DE, FR, IE, SG, NL, ES, BR)Source: Teamed jurisdiction operations· verified 2026-05-06

Verify before you cite

Calculator scope: Cost crossover only — does NOT model FX exposure, hiring speed, compliance risk, or works council triggersSource: Calculator design notes — see CTAs for full modelling
Salary cancels in breakeven: Mathematically correct — breakeven depends on EOR fee vs entity payroll-per-employee + fixed overhead, not on salary levelSource: Crossover formula — see "How is this calculated?" below
Default per-country numbers: Illustrative mid-market all-in costs; not contractual quotesSource: Teamed jurisdiction operations
EOR fee assumption: $599/employee/month — Teamed Fixed Rate USD, matching Deel's Standard headline. Flat across all countries modelled. Regional Rate (£400 + 2% disclosed FX) is the cross-border-specific alternative.Source: teamed.global/pricing + deel.com/pricing

How is this calculated?

EOR annual cost per employee = (salary × (1 + statutory burden)) + (EOR fee × 12).

Entity annual cost = (salary × (1 + statutory burden) + entity payroll service per employee × 12) × headcount + (accountancy + compliance) × 12 + formation amortised over 3 years.

Breakeven headcount = (formation / 3 + (accountancy + compliance) × 12) ÷ (EOR fee − entity payroll service per employee) × 12. Salary cancels — the breakeven is purely about whether your headcount can amortise the entity fixed overhead against the per-employee EOR fee saving.

Verdict band: at headcount ≥ 1.25 × breakeven, the calculator says graduate. At headcount ≤ 0.75 × breakeven, it says stay on EOR. In between is “borderline” — the right answer depends on hiring trajectory, FX exposure, and statutory specifics this calculator can’t infer.

What this calculator deliberately does NOT model.

· FX exposure — undisclosed FX markup from your current EOR is the most common hidden cost. Run the Unbundling Calculator to see the effect on a real invoice.
· Hiring speed — EOR puts an offer on the desk in 1–4 weeks; entity formation takes 8–16 weeks plus banking. If you’re racing a competing offer, EOR wins on tempo regardless of cost.
· Compliance / works council triggers — Germany hits headcount-based works council obligations at 5 / 20 / 50; France at 11 / 50; the Netherlands at 50. These don’t change the cost crossover but they change the operational complexity.
· Severance regimes — France, Brazil, and Germany carry statutory severance that’s higher under direct employment than under EOR. Model that into your risk reserve.

Book a 30-minute working session

Frequently asked questions

At what headcount should we open our own entity instead of staying on EOR?
Country-dependent — typically 15–25 employees in a single country at average salary. The exact threshold moves with salary mix, benefits load, and statutory specifics. Run the calculator above with your real numbers; the breakeven line tells you the headcount where your own entity becomes cheaper than continuing on EOR. Some Teamed customers stay on EOR well past that threshold for distributed teams (one or two people per country) because the entity overhead doesn't amortise across so few employees.
What does the breakeven actually depend on?
Both EOR and entity carry the same gross salary plus statutory contributions per employee — those cancel. The breakeven depends on the spread between the per-employee EOR fee and the per-employee entity payroll service, plus the entity's fixed overhead (accountancy, compliance, formation) that the headcount has to amortise. The lower the per-employee spread and the higher the fixed overhead, the more headcount you need before entity wins.
What costs am I missing if I only compare headline EOR fees?
Three lines most providers don't publish upfront. (1) FX markup on cross-border salary conversion — typically 1.5–3% undisclosed; on a $190K salary that's $2,850–$5,700/year per employee. Run the Unbundling Calculator at /tools/unbundling-calculator to surface the markup on your current invoice. (2) Setup and exit fees, sometimes labelled "onboarding" or "data-portability". (3) Out-of-scope charges for visa support, mid-cycle contract amendments, or work-pattern changes. Teamed itemises all of these (0% FX on Fixed Rate; €0 setup and exit guaranteed in the MSA).
How accurate is the breakeven for my specific situation?
The defaults are typical all-in cost ranges for each country, sourced from Teamed jurisdiction operations and OECD employer contribution data. The real breakeven for your business depends on your salary mix, benefits load, and statutory specifics — plus operational factors the calculator doesn't model (hiring speed, works-council triggers at certain headcounts in Germany / France / NL, severance regime differences). Bring your real numbers and your headcount projection to a 30-minute working session and we'll model the breakeven line by line.