EOR, PEO or your own foreign entity? A decision framework with a break-even example, public EOR prices, and the point where an entity starts to win.
You have three real ways to put someone on payroll abroad: a professional employer arrangement at home (a PEO), an employer of record (EOR) abroad, or your own legal entity in that country. They solve different problems, and picking wrong costs either money (entity too early) or time and legal exposure (contractor or EOR too long). This guide gives the decision rule, the arithmetic, and the points where you should re-check.
What each option actually is
| Option |
Who is the legal employer |
Where it works |
Public price signal |
| PEO |
You and the PEO share employer duties (co-employment) |
Domestic US workers |
Deel lists $125 per US PEO employee/month (Deel pricing); Remote lists from $99, US only (Remote pricing) |
| EOR |
The EOR's local entity |
The countries the EOR covers |
$199 to $699 per employee/month, see below |
| Own entity |
Your subsidiary or branch |
One country at a time |
No flat price; depends on country |
The PEO row is the one people get wrong. A PEO is a US construct. Remote states its US PEO is "US only, USD billing and US bank account" (Remote pricing). If your hire lives in Poland, a PEO is not on the table.
So the real choice abroad is EOR versus entity, with contractors as a third path that works only when the person is genuinely independent (see our contractor misclassification guide).
Why you cannot just hire directly
Across the countries in our data, the pattern is the same: employing someone directly requires a local registered presence. Examples from our country files:
- Brazil: "A foreign company cannot directly employ staff in Brazil without a local entity (Ltda/CNPJ registration, eSocial, bank account)" (Deel).
- Germany: a German entity or registered branch with employer registration, tax number and social insurance filings.
- United Kingdom: employer registration with HMRC, which in practice requires a UK presence for PAYE and pension.
- Poland, Thailand, Vietnam, India, Philippines, Mexico, Colombia: a local entity is required for direct employment.
EOR list prices (what you can model today)
| Provider |
EOR price |
Notes |
| RemoFirst |
from $199 |
"Starting at": country rates not shown |
| Playroll |
from $399 |
No onboarding or offboarding fees stated |
| Multiplier |
from $459 annual / $499 monthly |
Third-party figure, vendor page not retrievable |
| Deel |
$599 |
Public list price |
| G-P |
from $599 |
Volume discounts, no minimum contract length |
| Atlas HXM |
from $599 |
Vendor llms.txt |
| Remote |
$699 |
Public list price |
| Oyster |
$699 |
Refundable deposit required |
Sources: Deel, Remote, Oyster, RemoFirst, G-P, Playroll. Multiplier's figure is third-party; verify with provider. For a deeper look at what sits on top of these numbers, read EOR pricing explained.
The break-even arithmetic
The fee is only the EOR's margin. Salary, employer taxes and benefits are the same under an EOR or an entity (an EOR passes them through). So the comparison reduces to one question: is the EOR fee per head higher than your entity's fixed running cost per head?
EOR premium per head per year = monthly fee x 12
Break-even headcount = annual entity cost / EOR premium per head
Worked example at Deel's list price:
- EOR premium per head: $599 x 12 = $7,188 per year.
- Suppose your all-in annual entity cost is $30,000 (an illustrative assumption, not a quote: accountant, payroll processing, registered office, legal, amortised setup).
- Break-even: $30,000 / $7,188 = 4.17, so 5 hires in that country.
At Remote's $699: $699 x 12 = $8,388; $30,000 / $8,388 = 3.58, so 4 hires. At RemoFirst's $199: $199 x 12 = $2,388; $30,000 / $2,388 = 12.6, so 13 hires. The cheaper the EOR, the later an entity pays off. Swap in real quotes from a local accountant before acting; our $30,000 is a placeholder.
Setup costs we do have, from Deel's country pages:
- Mexico: own-entity setup is claimed at about MXN 88,411 one-time and 4-5 months before the first hire; EOR is claimed to start in 1-2 business days with contracts in about 5 days (Deel).
- Colombia: 16-28 weeks for own-entity incorporation and bank account, about COP 163 million in legal, notary and accounting fees; EOR onboarding in under 5 working days once documents are ready (Deel).
- Brazil: about 4-6 months for CNPJ registration versus 5-10 business days via EOR (Deel).
These are a vendor's claims about its own competing alternative, so treat the direction as credible and the exact figures as "verify with provider."
Decision rules
Rule of thumb, not law:
- One or two hires in a country, no other presence: use an EOR. The arithmetic above says the entity cannot pay for itself, and you start in days instead of months.
- Hire is a US resident or you are US-based and hiring in the US: a PEO or plain payroll is the tool; an EOR is the wrong product.
- Three to five hires in one country within 12 months: get an entity quote and run the break-even. At Deel's list price the crossover in our example is five.
- Fast hiring windows (under a quarter): EOR even if the break-even says entity, because Mexico, Colombia and Brazil entity timelines run 4-6 months on the figures above.
- Hire needs equity grants, local sales authority, or will sign contracts for you: talk to counsel; those functions push toward an entity because they create corporate presence questions an EOR does not remove.
- Short engagement (under 6 months) with real independence: a contractor can be right, but only where misclassification risk is low or moderate.
Reassess at each new hire, and at every 12-month mark, because EOR fees are per head per month and entity costs are mostly fixed.
Costs that do not change between options
The worked numbers below use a hypothetical $60,000 base salary to show what both routes pass through. Employer cost percentages come from our country files.
| Country |
Employer cost % |
Loaded cost on $60,000 |
Add EOR at $599 x 12 = $7,188 |
| Poland |
19.5-22.1% |
$71,700-$73,260 |
$78,888-$80,448 |
| Mexico |
27-36% |
$76,200-$81,600 |
$83,388-$88,788 |
| Colombia |
38-52% |
$82,800-$91,200 |
$89,988-$98,388 |
| Brazil |
47-70% |
$88,200-$102,000 |
$95,388-$109,188 |
Arithmetic for Poland: $60,000 x 0.195 = $11,700; $60,000 x 0.221 = $13,260; so $71,700 and $73,260. Brazil: $60,000 x 0.47 = $28,200 and $60,000 x 0.70 = $42,000, so $88,200 and $102,000. Mexico: $60,000 x 0.27 = $16,200 and $60,000 x 0.36 = $21,600, so $76,200 and $81,600. The EOR fee is about 9% of the Polish total ($7,188 / $78,888) at the low end but under 7% of the Brazilian high-end total ($7,188 / $109,188 = 6.6%). In expensive-labour countries the EOR fee is the smaller line, and the entity decision is driven by compliance load and speed rather than the fee. The percentages are applied to a USD-equivalent base and ignore FX; see each country page for detail.
What to check before you commit
- Contract terms: minimum term, notice to leave, and termination fees. Playroll says it "never charges onboarding or offboarding fees"; Oyster requires a refundable deposit. Ask every vendor (Playroll, Oyster).
- Entity model: Deel is a hybrid of owned entities and in-country partners; Atlas claims to own its entities (vendor claim, unverified). The distinction matters when something goes wrong, because a partner sits between you and the employer.
- Exit path: ask whether the EOR will transfer the employee to your new entity and at what fee. Verify with provider.
Bottom line
Use an EOR for the first one to three hires in a country, because the entity's fixed costs and 4-6 month timelines in places like Mexico, Colombia and Brazil outweigh a $199-$699 monthly fee. Run the break-even with real quotes once you approach four to five hires in one country. A PEO is a US product and does not apply to staff abroad. All prices here are public list prices checked 2026-10-05 and can change; employment rules differ by country and change often. This is general information, not legal or tax advice, so confirm specifics with a qualified local adviser.