When expanding your team or entering new markets, you’ll come across two popular workforce solutions: Employer of Record (EOR) and Professional Employer Organization (PEO). While they may sound similar, they serve different purposes—and choosing the right one depends on your business needs.

What is an Employer of Record (EOR)?

An EOR is a third-party company that becomes the legal employer of your workforce in a given country.
You manage the day-to-day work of the employee, while the EOR handles:

• Compliance with local labor laws

• Employment contracts

• Payroll and taxes

• Benefits administration

• Onboarding and termination

• Risk and liability

✔️ Ideal for:
Companies that want to hire in a foreign country without setting up a legal entity.

What is a Professional Employer Organization (PEO)?

A PEO is a co-employment model where the PEO shares certain HR responsibilities with your company.
You must have a legal entity in the country where you operate. The PEO supports with:

• Payroll and tax filing

• HR compliance

• Benefits and insurance programs

• Risk management

• Employee onboarding and training

✔️ Ideal for:
Companies with a local presence that want help managing HR and compliance within the same country.

EOR vs PEO: Side-by-Side Comparison

Which One Do You Need?

Ask yourself:

• Do you want to hire in a country where you don’t have a legal entity?
  → Use an EOR

• Do you already have a local office but want to offload HR tasks like payroll and compliance?
  → Use a PEO

Final Thought:

If you’re entering a new market and need to hire fast without setting up an entity, EOR is your best option.
If you’re already established in a country and want help managing local HR functions, a PEO might be right.