Glossary · Compliance
What is EOR
Also called: employer of record.
Definition
An employer of record legally employs a worker on your behalf in a jurisdiction where you have no entity, handling payroll, tax and compliance.
Applies to: US and UK · Reviewed by James Doyle
In practice
For a UK agency making its first US placements, an EOR is the fastest legal route to payroll in a new state without forming an entity or registering for state taxes.
It costs more per head than running your own entity, so it is an entry mechanism: use it to prove demand, then form the entity once volume justifies it.
Related terms
PEO
A professional employer organisation co-employs your internal staff, providing payroll, benefits and HR infrastructure under a shared-employment model.
ReadWorker classification
Whether a worker is an employee or an independent contractor in law. Getting it wrong creates back taxes, penalties and client indemnity claims.
ReadState registration
Registering with a state to withhold payroll taxes and, in some states, to operate as a staffing agency. Required where your worker performs the work.
Read
Put the theory to work.
Model your rates, costs and funding with the calculators built on our own 2025 data.