When a European or US company hires you from another country, they'll usually offer one of two arrangements: contractor or employer of record (EOR). They feel similar day to day. Legally and financially they're quite different.
Side by side
| Contractor | Employer of Record | |
|---|---|---|
| Legal employer | Nobody. You're a business | The EOR in your country |
| Contract | Services agreement | Local employment contract |
| Taxes | You file and pay | Withheld through payroll |
| Statutory benefits | Usually none | Per local law (leave, social security, etc.) |
| Termination | Per contract notice | Per local employment law |
| Admin for you | Invoicing, bookkeeping | Minimal |
| Rate | Often higher headline | Lower headline, more benefits |
When contracting suits you
- You want flexibility and possibly multiple clients
- You're comfortable with invoicing and taxes
- You can price in your own benefits and gaps (day rate maths)
When EOR suits you
- You want employee protections and benefits
- You prefer simple payroll
- You plan to stay with one company long-term
Misclassification
If you work full-time, exclusively, under the company's direction, on their schedule, with their equipment, you may look like an employee legally, regardless of what the contract says. Rules differ by country. This is mostly the company's risk, but it can affect you, so it's worth understanding.
Questions to ask the company
- Why this model? Can the other be offered?
- For EOR: which provider, what benefits, what notice?
- For contractor: payment terms, currency, who covers transfer fees?
- IP ownership and confidentiality terms?
- Equipment and expenses?