When to hire abroad through an employer of record and when a contractor is enough. Public prices, misclassification risk in 15 countries and a worked break-even. Not legal advice.
The choice between an employer of record (EOR) and a contractor looks like a price question, and the price gap is real: $25-$49 against $199-$699 a month. But the decisive factor is not the platform fee. It is whether the working relationship, as it actually runs, looks like employment in the worker's country. If it does, a contractor agreement does not change that, and the cost of getting it wrong lands on you. This guide gives the pricing, a country-by-country risk table taken from our country files, and a break-even calculation. We have not tested any product.
What each model is
A contractor is a self-employed supplier who invoices you. You pay an invoice; the worker handles their own tax and social security. A platform (Deel, Remote, Oyster and others) can sign the agreement and pay them for a monthly fee. An EOR is the legal employer in the worker's country: it issues the employment contract, runs payroll and statutory contributions, and you direct the day-to-day work. A Contractor of Record sits between: the provider contracts with the worker and takes on some indemnity, but the worker is still a contractor in law. See how to pay international contractors for the payment side.
Public prices side by side
| Provider |
EOR per employee/month |
Contractor per month |
Contractor of Record |
| RemoFirst |
from $199 |
Free tier; Premium $25 |
Not found |
| Playroll |
from $399 |
$35 (third-party) |
Not found |
| Deel |
$599 |
$49 |
$325 |
| G-P |
from $599 |
from $39 |
Not found |
| Remote |
$699 |
$29 basic; $99 Plus (up to $100,000 indemnity) |
from $325 |
| Oyster |
$699 |
Free 30 days, then $29 |
Not found |
Sources: Deel, Remote, Oyster, G-P, RemoFirst, Playroll (EOR) with a third-party snippet for its contractor price. Checked 2026-10-05; "starting at" prices may not apply in every country.
Annual platform-fee gap for one worker, same provider:
| Provider |
EOR x 12 |
Contractor x 12 |
Gap |
| Deel |
$599 x 12 = $7,188 |
$49 x 12 = $588 |
$6,600 |
| Remote |
$699 x 12 = $8,388 |
$29 x 12 = $348 |
$8,040 |
| Oyster |
$699 x 12 = $8,388 |
$29 x 12 = $348 |
$8,040 |
| RemoFirst |
$199 x 12 = $2,388 |
$25 x 12 = $300 |
$2,088 |
The fee gap is $2,088-$8,040 a year per worker. Employer taxes are not in this table: an employee costs you statutory contributions on top of salary, while a contractor's taxes are theirs. Those are a separate bill (below).
The test that matters: how the relationship runs
Our country files show the same pattern in almost every jurisdiction: authorities and courts examine substance. The usual indicators are subordination or control, fixed hours or place, exclusivity, use of your equipment, and long-term integration into your team. A true contractor sets their own methods, has other clients, invoices for outcomes or hours worked, and can send a substitute. A full-time engineer who works your standup, uses your laptop and has no other client looks like an employee almost anywhere.
Contractor risk by country (from our country files)
The "risk" column paraphrases the wording in our files; the files are built from provider guides and public sources and several penalty details are marked "not verified" there.
| Country |
Employer cost (our range) |
What our file says about contractors |
Our reading |
| Brazil |
47-70% |
High risk; misclassified "PJ" workers can claim INSS, FGTS, 13th salary, vacation, overtime and the 40% FGTS fine |
High |
| Colombia |
38-52% |
Deel rates it high: back wages, social security arrears, fines |
High |
| Germany |
21-25% |
Strict; false self-employment policed; back contributions up to 4 years (30 in cases of intent) |
High |
| France |
25-45% |
Requalified if subordinated; dissimulated-work penalties include 6 months' pay and criminal liability |
High |
| Mexico |
27-36% |
Significant; 2021 outsourcing reform; Deel reports fines above MXN 500,000 (2021-2025) |
High |
| Argentina |
34-40% |
Serious penalties and fines (per Remote) |
High |
| Spain |
31-34% |
False self-employed actively policed; penalties not verified |
Medium-high |
| Philippines |
14-22% |
Four-fold test; moderate to high for full-time dedicated freelancers |
Medium-high |
| Italy |
30-45% |
Moderate to high |
Medium-high |
| Poland |
19.5-22.1% |
B2B common in tech; PIP can reclassify and fine; ZUS can claim back contributions |
Medium |
| India |
5-10% |
Moderate; also permanent-establishment or tax risk if directed from abroad |
Medium |
| Vietnam |
21.5-23.5% |
Moderate; wages under direction means employee under the 2019 Labour Code |
Medium |
| Thailand |
2-6% |
Moderate; severance and overtime claims |
Medium |
| Singapore |
0.25-17.25% |
Low to moderate |
Lower |
| UAE |
5.75-12.5% |
Low to moderate; true contractors need a licence or free-zone permit |
Lower |
"Our reading" is a rule-of-thumb grouping of those descriptions, not a legal assessment. Poland's tech sector uses B2B contracts widely, which is why it is Medium, not Low: common practice does not protect a relationship that looks like employment.
Worked break-even: a $60,000 full-time engineer
Take the Deel prices. The platform-fee saving from contracting is $6,600 a year (above). Now the downside if the contractor is reclassified. We use our employer-cost ranges as a rough proxy for back-charges for one year (they omit fines, interest and employee-side contributions, so they understate):
| Country |
Employer cost range |
One year at $60,000 |
Fee saving / exposure |
| Brazil |
47-70% |
$28,200-$42,000 |
$6,600 / $28,200 = 23% |
| Germany |
21-25% |
$12,600-$15,000 |
$6,600 / $12,600 = 52% |
| Poland |
19.5-22.1% |
$11,700-$13,260 |
$6,600 / $11,700 = 56% |
Arithmetic: $60,000 x 0.47 = $28,200; x 0.70 = $42,000; x 0.21 = $12,600; x 0.25 = $15,000; x 0.195 = $11,700; x 0.221 = $13,260.
Read the last column as: the fee saving is as large as that share of one year's exposure. If you think there is more than a 23% chance a Brazilian full-time relationship is challenged and loses, the saving is not worth it, before counting the 40% FGTS fine and the lawyers. In Germany, with a four-year look-back, the exposure is 4 x $12,600 = $50,400 to 4 x $15,000 = $60,000 against $6,600 a year of savings, or $26,400 over four years. These are illustrations of the shape of the trade, not probability estimates; we have none.
A practical decision rule
Use a contractor when most of these are true:
- The work is a defined project or a deliverable, not a seat on the team.
- The person has other clients or the freedom to take them.
- They use their own tools and set their own hours.
- The country is not in the high-risk group above, or you have local advice.
- You can end the arrangement without owing employment-style notice.
Use an EOR when any of these are true:
- The person works full-time and exclusively for you.
- They report to a manager and follow your schedule and processes.
- You want employment benefits, paid leave and a normal employment contract.
- The country is in the high-risk group (Brazil, Colombia, Germany, France, Mexico, Argentina).
- You want the right to ask for non-compete, IP assignment and confidentiality terms inside an employment contract.
Consider a Contractor of Record if you need to use a contractor in a higher-risk country: Deel's $325 and Remote's from-$325 product are about 6.6x and 11x a standard contractor seat on Deel and Remote respectively ($325 / $49 = 6.6; $325 / $29 = 11.2). Its cover differs by vendor and does not turn a relationship that looks like employment into a contract; verify with provider.
Bottom line
Contractor seats cost $25-$49 against $199-$699 for EOR, which saves $2,088-$8,040 a year per worker. That saving is fine for genuine, project-based or multi-client contractors. It is a poor trade for a full-time, exclusive engineer in Brazil, Colombia, Germany, France, Mexico or Argentina, where our country data describes serious reclassification consequences. Decide on how the relationship works, not on the platform price. Prices and local rules change, and several penalty details in our files are marked unverified. Verify with provider and a local adviser. This is general information, not legal or tax advice, and we have not tested any of these products.