The one-sentence definition
An employer of record (EOR) is a company that legally employs a worker on behalf of another business. The EOR is the employer on paper — it runs payroll, withholds taxes, provides benefits, and carries employment compliance and liability — while the worker does their day-to-day job for you and takes direction from your team.
The split is simple: the EOR owns the employment relationship; you own the working relationship.
What an EOR actually handles
A full EOR typically takes on:
- Payroll and payments in the worker's local currency
- Tax withholding and filings
- Statutory benefits and mandatory contributions
- Employment contracts compliant with local law
- Compliance, terminations, and employment liability
EOR vs. hiring directly (and vs. a PEO)
Hiring directly means you set up your own payroll, benefits, and — if the person is in another country or state — potentially a legal entity there. An EOR removes that: because it already has the infrastructure and entity, you can bring someone on in days, not months.
An EOR is not the same as a PEO. A PEO co-employs staff who work at a company that already has its own legal entity in that jurisdiction; an EOR is the sole legal employer and does not require you to have an entity there at all. If you have no entity where the person lives, you need an EOR, not a PEO.
When an EOR makes sense
The EOR model fits when you want a dedicated, ongoing team member but don't want to become their legal employer — especially for remote or cross-border talent. It's the structure Webly Studio uses to place vetted specialists: we recruit and vet the person, employ them as the EOR, and put them on your team so you manage the work while payroll, taxes, and compliance stay with us.