What is an employer of record?
An employer of record is a company that legally employs a worker in their country on your behalf, handling payroll, taxes, benefits and compliance, while the person works day to day for you. It typically costs $500–700 per person per month on top of salary and does not find or screen candidates.
An EOR exists to solve one specific problem: you want to employ someone in a country where you have no legal entity. Setting up a subsidiary in Brazil to hire one engineer is disproportionate; an EOR rents you the entity instead.
What an EOR does not do is find the person. This is the most common misunderstanding in the category. EOR platforms are infrastructure, not recruitment — you arrive with a name and they handle the employment. If your actual problem is "I do not know who to hire", an EOR does not address it.
The alternative structures are contracting the individual directly, which is cheaper and carries misclassification risk if you treat them like an employee, or contracting through a studio or agency, where the supplier employs the engineer and invoices you for a service.
Key points
- Legally employs someone abroad on your behalf; you have no local entity.
- Roughly $500–700 per person per month on top of salary.
- Does not source or screen candidates — you bring the person.
- Removes misclassification risk that direct contracting can carry.
- Setup typically takes two to four weeks.
Frequently asked questions
Do I need an EOR to hire in Brazil?
Only if you want the person to be your formal employee. Contractor and studio arrangements require no Brazilian entity and no EOR.
Related
Other definitions
Tell us the role. We come back with candidates.
A 20-minute call to scope the role, then vetted profiles within five business days. No fee to talk, no retainer, no exclusivity.