When an Employer of Record is genuinely the right answer

Why a payroll firm is writing this

Almost everything comparing an Employer of Record with running your own UK payroll is written by one side or the other, and it reaches the conclusion you would expect. This page is no exception in that respect. We run direct payment schemes for overseas employers, and on the monthly fee alone we are the cheaper option nearly every time.

Cheaper is not the same as right. An EOR solves two problems that a payroll scheme cannot solve at all, and if one of those is your problem then the fee is not a premium, it is the price of the only thing that works. So here is when it is the right buy, when it is not, and what to check before you sign either way.

The fee buys two things, and only two

Strip out the marketing and an EOR sells speed, because the scheme exists already, and a shift in who is legally the employer. Everything else on the invoice, the payslips, the RTI filing, the pension and any statutory pay that's due, has to happen on every route and a payroll firm does it for a fraction of the price. So the test is not whether the fee looks high. It is whether you need one of those two things. If you do, buy it without apology. If you do not, you are paying a premium for a payslip.

For scale, at 2026/27 rates: four of the best-known EOR platforms publish starting prices of about £297 to £519 per employee a month, with $599 (about £445 at HMRC’s October 2026 rate) the most common (read 22 October 2026), against £157 a month per scheme for a direct payment scheme run for you. An Employer of Record becomes the legal employer and takes on the employer's duties; we run the payroll while you stay the employer, so the fees pay for different things. On top of either sits the salary and the workplace pension. Employer's secondary National Insurance depends on the route. On an EOR, the EOR pays it as the UK employer and passes it on to you, wherever you're based. Without an EOR, an employer based in the EU, the EEA or Switzerland generally owes it directly through an NI-only scheme, while an employer based elsewhere with no UK presence, on a DPNI, usually doesn't. We will ask HMRC for the scheme that fits your facts, and they may suggest a different one once they have the full facts. Where it's due, it's the employer's cost rather than the employee's. Our full Employer of Record cost comparison sets it all out properly, including the one off charges and the extras that are easy to miss on either side.

Two questions worth asking any provider

Who actually employs the person. Some providers employ directly in the UK. Others subcontract to a local partner, which puts a company you have never met on your employee's contract of employment. Ask to see the name that will appear on it, and ask who answers a payroll query.

How you leave. Notice periods, exit fees, and whether you can keep the employee at the end, are all far easier to read before you sign than after you have decided to move. Nearly every EOR arrangement ends eventually, usually because the hire worked, so treat the exit terms as part of the price rather than as an afterthought.

If you are still weighing the three routes rather than the providers, the EOR, DPNI or subsidiary guide asks the four questions that usually settle it, and the route finder will name a route in about a minute.

Questions people ask before they decide

Is an Employer of Record more expensive than running your own payroll?

On the fee for running the payroll, almost always. The published platform rates start at about £445 per employee per month, against £157 a month per scheme for a direct payment scheme run by a specialist, at 2026/27 rates. Salary and pension sit on top of either. Employer's National Insurance sits on top of the EOR fee, and on your own scheme too if your company is in the EU, the EEA or Switzerland or has a UK presence. What the fee buys is speed and a transfer of the legal employer role, so the useful question is whether you need those, not whether the number is bigger.

Can I move an employee off an EOR later?

Usually, and it is common enough to be routine. You register your own scheme, agree a transfer date with the EOR, and run the first payroll alongside theirs so nothing lands late. The switching guide sets out the order. Read the notice period in the EOR contract before you sign it rather than when you want to leave.

Does an EOR remove my UK employment obligations entirely?

It moves the legal employer relationship, not your involvement. You still direct the work, set the pay and manage the person, and a badly handled ending is still your commercial problem even when the paperwork sits with someone else. Read what your provider takes on and what it hands back to you, because the two vary a lot between providers.

How much faster is an EOR than setting up our own scheme?

An EOR can normally have someone employed within days, because the scheme is already there. On our own estimate, a direct payment scheme takes roughly four to eight weeks to build with HMRC, which publishes no timescale for it, as we set out in how long UK payroll setup takes. An employee can still be paid while a registration is in progress, with the filing caught up once HMRC issues the references, so a slow start does not have to mean an unpaid employee.

Read next

• What an Employer of Record costs in the UK, the published pricing, the extras that are easy to miss, and the cheaper route.
• EOR, DPNI or subsidiary, the four questions that pick between the three ways of employing someone here.
• Switching from an EOR to your own payroll, the steps in order, and how to time the handover so nobody is paid late.
• Do you need a UK payroll at all?, five questions, including the situations where the honest answer is no.
• Employer of Record UK: the complete guide, every EOR guide in one place.

This page is general information, not tax, legal or employment advice, and reflects the published rates for the 2026/27 tax year. Your own position may differ, so please check it or get advice before acting.