EOR vs PEO: Explore the Differences to Identify What is Best For Your Business

Achieving global presence is something that every business looks forward to. If you are a business owner who wants to expand your business, you need to make sure you are equipped with the right sources in order to onboard and manage full-time employees and independent contractors across the world in an efficient way. This is because your human resources are the backbone of your company and you have to find ways to handle them well despite the absence of geographic boundaries when it comes to global expansion.

Given the scenario, it is obvious that your businesses need something more than the traditional HR management setup to streamline global employees and contractors who work for your company from different parts of the world. This is precisely where an Employer of Record (EOR) and a Professional Employer Organization (PEO) come in to play.

Let’s explore the two concepts in order to help you find out which of these can go well with your business model.


EOR vs PEO

Both EOR and PEO relate to HR outsourcing. While many people think the two are the same, they are not. They may be similar but have their differences. It isn’t wrong if you haven’t identified these differences yet. But, knowing these differences can be of great help to decide if your company wants an employer of record or a professional employer organization.

An EOR manages everything from legal liabilities to social taxes for your full-time employees across the world so as to simplify global HR management for your company.On the other hand, PEO works based on the co-employment model.That is, they share with you the responsibilities of onboarding and managing both full-time employees and independent contractors. 

A Bigger Picture of the Differences

Every penny counts when it comes to business and you know better as a business owner. Given the scenario, it is mandatory for you to take a closer look at what an EOR and a PEO are capable of. 

In this section of the article, let us weigh the advantages of an EOR and A PEO and how they can prove good for a business such as yours.

Get More Control With A PEO

The first and foremost difference between a Professional Employer Organization and Employer of Record is better control. While both of them can take care of your global HR responsibilities, a PEO can give you more control over your HR operations. Yes, the PEO can come in handy for employee onboarding, employee reviews, contract termination, and sometimes offer valuable suggestions that will help you make informed decisions in terms of global HR management. However, the final decision always lies with you.

Better Insurance Comes With an EOR

Insurance coverage is one of the areas where a Professional Employer Organization and an Employer of Record differ greatly.  If you opt for a PEO, you will have to provide the insurance for your global employees on your own.

Yes, a PEO will take care of tax regulations and insurance in some cases. If your business belongs to an industry where material damage or bodily harm during work is common, a PEO may direct you to get your own insurance. Let us take an example, if you run a delivery service, a PEO will not come for your support in terms of insurance if a delivery executive damages the package or hurts himself during the process. On the contrary, insurance claims such as these are possible with an Employer of Record. 

With an Employer of Record, it is possible to get compensation no matter the country you are in or the country your employee belongs to. Given the scenario, an EOR is the best option than a PEO when it comes to risk management because they take complete liability for cases of such nature.

Hire Internationally Without a Local Entity

When you opt for an Employer of Record, you do not have to take the pressure of setting up an entity in whichever country you want to onboard resources. Yes, the EOR can be your local entity in any country. This is applicable even when you want to hire more resources from ten different countries at a stretch. The number doesn’t matter at all. This is the power of an Employer of Record. 

EOR Proves Good for Legal Compliance

Legal compliance is an inevitable component when it comes to global expansion because each country has a different set of legal procedures. An EOR overpowers an PEO in this case because the former can take care of legal compliance on your behalf while the latter wants you to handle the legal documents all on your own. 

In short, if you don’t want to spend your valuable time on tracking the laws in place in different countries from time to time, an Employer of Record is your go-to choice.

Multiplier - EOR And PEO in One Place

Multiplier can be your one-stop destination for both EOR and PEO needs. While you opt for the global HR outsourcing model that suits your business, we can be your trusted partner everywhere and in everything.

Worried about keeping track of the altering labor laws and tax regulations in multiple countries? Take a chill pill. We have a constant eye for legal updates across the globe for you and rightly meet 100% statutory compliance.

We understand setting up local entities in multiple countries isn’t a convenient option for many businesses. When you partner with us, we become your eyes and ears in any country,

On-time payroll processing is one of the smart ways to motivate your global resources to showcase maximum productivity. With us to back you up, you need not keep track of dates to process payroll because we process global payroll on your behalf right on time.

While we process payroll for your company, you are still the mega mind there. Yes, the one-click feature of Multiplier allows you to take control of your payroll and approve it in just a click.

For more information, feel free to get in touch with us at Multiplier.

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