Employer of record vs contractor: which do you need?
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Contractors are cheaper and faster to hire. Employees are protected by local law. If you treat someone as a contractor but manage them like an employee, you can owe back taxes, contributions and penalties.
The key difference
| Contractor | Employee through an EOR | |
|---|---|---|
| Who decides how work is done | The contractor | You |
| Hours and exclusivity | Flexible, can have other clients | Set by you, usually exclusive |
| Taxes and social contributions | Paid by the contractor | Withheld and paid by the EOR |
| Benefits and paid leave | Not required by law | Required by local law |
| Typical cost on top of pay | Platform fee, if any | Employer costs plus EOR fee |
Signs someone is really an employee
- They work only for you, full-time, for a long period.
- You set their hours and tell them how to do the work.
- They use your equipment and are part of your team's structure.
- They are paid a fixed monthly amount rather than per project or invoice.
Each country has its own test, but if most of these apply, an employer of record is the safer choice.
Compare the options
Contractor platforms:
| Product | Price today | Free plan | Details |
|---|---|---|---|
| Oyster Contractors | From USD 29 per contractor per month | No | Pricing |
| Remote Contractor Management | From USD 29 per contractor per month | No | Pricing |
| Deel Contractors | From USD 49 per contractor per month | No | Pricing |
| Multiplier Contractors | From USD 40 per contractor per month, annual | No | Pricing |
| Ontop | From USD 49 per contractor per month (from) | No | Pricing |
Prices from vendor websites, checked 2026-10-12; they update automatically.
Employers of record:
| Product | Price today | Free plan | Details |
|---|---|---|---|
| Oyster | From USD 699 per employee per month | No | Pricing |
| Deel | From USD 599 per employee per month | No | Pricing |
| Remote | From USD 699 per employee per month | No | Pricing |
| Multiplier | From USD 499 per employee per month (monthly contract) | No | Pricing |
Prices from vendor websites, checked 2026-10-12; they update automatically.
Price both for your team with the contractor cost calculator and the EOR cost calculator.
Questions
Can I switch a contractor to an employee later?
Yes. Most providers that offer both can move a contractor onto EOR employment in the same platform.