If you manage a global team — you’ve likely heard of EOR and PEO.
But what’s the difference? And which one is best for you?
Let’s dive in…
Seven Key Differences between EOR vs. PEO
1. Structure: EORs fully own HR responsibilities in specific jurisdictions. PEOs share responsibilities without assuming complete ownership.
2. Risk: EORs bear full responsibility for employment risks and liabilities, while PEOs offer guidance but don’t shoulder the weight.
3. Scale: EORs provide flexibility for businesses hiring across diverse locations, while PEOs often demand a minimum number of employees.
4. Scope: EORs handle location-specific labor law compliance, while PEOs leave the burden of law compliance on your plate.
5. Cost: EORs often prove less costly as they cover insurance and benefits for your workforce, while PEOs might leave these costs with you.
6. Control: PEOs let you retain control over HR decisions, while EORs, as the official employer, ask you to cede some control.
7. Employment Liabilities: EORs assume full responsibility for employment liabilities, while PEOs share the risk, but not completely.
EOR vs PEO: What’s Best for Your Business?
The answer depends on your expansion goals and your appetite for legal responsibilities.
If you’re expanding globally, an EOR, like Parallel, will handle local legal and payroll intricacies.
If you’re expanding within your country, a PEO can manage tasks while sharing legal duties.
When it comes to cost, EORs usually charge a percentage of employee salaries, while PEOs often charge a flat rate per employee.
Choosing the Right Partner
Industry experience, knowledge of international laws, scalability, cultural fit, and customer reviews are crucial in your decision.
With remote work and global business operations becoming the norm, EORs like Parallel are leading the way.
Our team of experts navigates the complexities of international employment, allowing you to focus on growth.
Ready to unlock your full business expansion potential? Schedule your Parallel Demo Today.
