EOR vs contractor by country - which service fits your hire?
4 questions. Routes to Deel, Remote, Oyster, or Velocity depending on country, team size, and role.
Misclassification risk is the real cost. Treating a full-time team member as a contractor in a country that doesn't allow it can run 2-4x annual salary in back-taxes, penalties, and severance. Get this right on hire #1.
Rule of thumb: when does contractor work vs when do you need EOR?
| Scenario | Contractor OK? | Why |
|---|---|---|
| Short project < 6mo, multiple clients for worker | Usually yes | Genuine independence; most countries allow |
| Full-time, single-client, 40hrs/week, > 6 months | No - EOR | Most countries reclassify as employee regardless of contract label |
| Executive role / local country lead | No - EOR or entity | Tax residency and reporting obligations kick in quickly |
| EU hire working exclusively for your company | No - EOR | Strict presumption of employment under EU case law |
FAQ
- Is Deel really cheaper than Remote?
- Per-seat EOR pricing is close (roughly $500-700/mo in most geos). Deel's contractor and payroll bundle is where it pulls ahead on total cost. Remote wins when local entity quality in a specific geo matters more than price.
- What about setting up our own entity?
- Break-even is usually 5-10 FTE in a single country. Under that, EOR is cheaper even at premium per-seat pricing. Over that, you want a local entity + provider that handles payroll only (not EOR).
- Can we mix contractor and EOR?
- Yes, and most scaling companies do. Genuine short-term project work stays contractor. Anything durable and single-client gets moved to EOR.