EOR pricing models explained

• EOR pricing models vary - from flat fees to percentage-based or hybrid options - so understanding the full cost structure is essential before choosing a provider.
• Hidden costs matter: Always clarify onboarding, currency, and compliance fees to ensure true cost transparency.
• Value over price: Providers like Mauve offer scalable pricing and world-class compliance support, ensuring long-term ROI and sustainable global expansion.

When going global, figuring out cross-border hiring is key to the success of your business. That’s where Employer of Record (EOR) comes in. A versatile tool, growing in worldwide popularity, EOR allows businesses to broaden their horizons with ease.

What is Employer of Record (EOR)?

An Employer of Record (EOR) is a third-party organisation that legally employs staff on your company’s behalf in another country. Your business continues to manage the employee’s daily scheduling. Meanwhile, the EOR takes on the role of legal employer, handling HR, payroll and benefits, and in-country support.

While EORs have been around for a long time - Mauve Group has been in operation for almost 30 years - EORs exploded in popularity when the COVID-19 pandemic normalised remote working. The International Bar Association notes that the pandemic, “coupled with the recruitment crises in many western economies, has led to a significant increase in interest in EORs.”

Meanwhile, A&L Goodbody describes EOR services as “an attractive offering” for companies that do not have a physical or legal presence in a country. This is in part because an EOR removes the cost and administrative burden of setting up a company branch in-country – a process that can take months and create serious overheads.

EORs also support with compliance. Tax and employment laws vary widely. Trying to stay compliant with multiple sets of regulations can be a headache of overwhelmed HR teams. EORs relieve stress and mitigate risk by ensuring compliance with local laws.

With an EOR service, you can hire in days instead of months. This means your company can enter new markets and meet demand in real time.

For more information, visit our Ultimate guide to Employer of Record.

Understanding EOR pricing models, hidden costs, and ROI

When evaluating an Employer of Record (EOR) service, pricing is often one of the first considerations. However, it also one of the most misunderstood. EOR pricing structures can vary widely depending on the provider, the number of employees, and the desired countries.

It’s important to look beyond headline rates and understand how costs are calculated, where hidden fees may appear, and what kind of return on investment (ROI) an EOR can deliver.

Common EOR pricing models

Most Employer of Record services use one of three main pricing models, or a combination of all three.

Flat monthly fee per employee

In this model, the provider charges a consistent fee for each employee managed, regardless of salary or role. This approach offers simplicity and predictability, making it easy for finance teams to forecast costs. It’s often preferred by companies with stable headcounts or long-term employment needs.

Percentage of payroll model

Some EORs base their pricing on a percentage of the employee’s gross monthly salary (commonly 10–15%). With this structure, costs can scale naturally with compensation levels. That said, it can also become more expensive for higher-salary positions. This model is most suitable for organisations with diverse pay ranges or smaller teams.

Hybrid or tiered models

A growing number of providers use hybrid pricing. This refers to combining a base management fee with a percentage of payroll. Alternatively, they may utilise tiered structures that vary by country, employee count, or services included. These models can provide flexibility but require careful review to avoid unexpected costs as your teams expand.

Beware of hidden costs

While pricing pages often highlight base rates, additional fees can have a notable impact on the total cost of an EOR service. Common hidden costs include:

• Onboarding or setup fees: These include one-time charges for registering entities, processing documentation, or local compliance setup.
• Currency conversion and payment processing fees: These fees are applied when paying international salaries in multiple currencies.
• Termination and offboarding charges: Some providers charge per employee for final payroll, documentation, or severance handling.
• Optional add-ons: Services like benefits administration, equity management, or visa sponsorship may come at an extra cost.
• Compliance or tax surcharges: Be aware of country-specific requirements that can lead to additional government or filing fees.

To ensure transparency, request a full cost breakdown and clarify which services are included in the quoted rate before signing an agreement.

Measuring ROI from an EOR Service

While business leaders may at first be deterred by substantial upfront costs, with EOR, the proof is in the pudding. The right EOR partner can save costs at numerous junctures.

EORs can accelerate your business’ market entry by allowing you to avoid months of entity setup. This way, you can commence your global hiring within days.

Compliance risk is drastically reduced as experts ensure that all local laws are adhered to, no matter where in the world you’re hiring.

In addition to all these, admin overheads are reduced as in-house HR and payroll teams are no longer left struggling to manage complex processes in multiple locations. Not to mention, costs are greatly reduced when services such as HR, payroll, and legal support are consolidated into an all-in-one service.

When calculating ROI, compare the total annual EOR cost to the estimated expenses of setting up and maintaining a legal entity, handling compliance internally, and managing payroll across borders. In most cases, the efficiency gains and risk reduction far outweigh the direct service fees.

Understanding how EOR pricing models work, and factoring in hidden costs and ROI, empowers businesses to select an Employer of Record service that delivers both transparency and long-term value.

How to choose the best-value EOR provider

Finding the best EOR partner for your organisation does not equate to finding the cheapest one. When you choose an EOR, you are investing in the support of trustworthy, experienced experts, whose business it is to make sure your global expansion goes smoothly.

The best value EOR provider for you will be a partner that offers transparency, flexibility, and long-term scalability while ensuring full compliance in every country in which you operate.

Key questions to ask potential EOR providers

When speaking with potential providers, be sure to ask:

• How transparent is your pricing model, and are there any potential hidden fees?
• Which services are included in the base cost, and which are billed separately?
• What is your experience and legal coverage in the countries where we plan to hire?
• Who will actually be employing my workers – the EOR or an in-country partner?
• How does your technology platform integrate with our existing HR or payroll systems?
• What support do you offer for offboarding, benefits management, and compliance audits?
• How does the EOR manage their data and what is the data recovery plan in the event of a system failure?

For more information on how to assess an EOR, read our article Questions to ask your Employer of Record.

The importance of scalable pricing for future growth

A provider’s pricing structure should align with your company’s growth trajectory. If you plan to expand into multiple countries or scale your workforce quickly, choose an EOR pricing model that remains competitive as volume increases.

Scalable pricing, such as volume discounts or flexible per-employee fees, prevents costs from escalating disproportionately as your team grows. It also ensures your EOR partnership continues to deliver value through each stage of expansion.

How Mauve can help

Choosing the right Employer of Record (EOR) partner is about finding a balance between transparent pricing, compliance expertise, and scalability—and that’s exactly where Mauve excels.

With over 29 years of global experience, Mauve Group offers a truly end-to-end employer of record service, supporting businesses in more than 150 countries. Its pricing model is designed for clarity and value—no hidden fees, no surprises—while its global HR and legal teams ensure seamless compliance with local employment laws.

Beyond cost savings, Mauve’s technology-driven solutions and personalised client support make it easier for companies to hire and manage international talent with confidence. Whether you’re entering a new market or scaling a global workforce, Mauve provides the flexibility, transparency, and service quality that define a best-value EOR partnership.

Frequently Asked Questions

1. What is an Employer of Record (EOR)?

An Employer of Record (EOR) is a third-party organisation that legally employs workers on your behalf in foreign markets, managing payroll, taxes, compliance, and HR administration, so you can focus on operations and growth.

2. How do EOR pricing models differ between providers?

EORs typically charge a flat monthly fee per employee, a percentage of payroll, or a hybrid model that combines both. The best choice depends on your headcount, salary structure, and hiring goals.

3. Why choose Mauve as your EOR partner?

Mauve combines transparent, scalable pricing with more than two decades of expertise in global compliance. Its extensive country coverage and personalised service make it one of the most trusted and cost-effective EOR service providers in the market today.