We sell the cheaper alternative, so treat this page with the suspicion it deserves, and then read it anyway. An Employer of Record is the right answer more often than a payroll firm's website usually admits.
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.
Registering a direct payment scheme with HMRC realistically takes four to eight weeks. An EOR already holds a scheme, so onboarding is a contract and a start date. If the person joins next week, cost is not the deciding question.
One hire on a twelve month horizon, with a real chance you stop, is the textbook case. Nothing has to be registered, and nothing has to be unwound if the answer turns out to be no.
If you are hiring in five countries this quarter, a UK payroll scheme fixes one fifth of the problem. One provider, one contract and one invoice across all five is worth real money in admin you never have to do.
Employing someone here brings statutory rights, notice periods and exposure if it ends badly. An EOR takes the legal employer role on. That is a deliberate purchase of risk transfer, and a sound reason to pay more for it.
No finance team, no HR, and nobody whose job includes reading an HMRC letter. A fee larger than a payroll bureau's can still be smaller than the first administrator you would otherwise have to hire.
A funded project, a secondment, or a contract with a term on it. Where the job genuinely stops on a known date, something you can end with notice beats something you have to close down with HMRC.
The fee does not taper. At published rates it runs to several thousand pounds a year, every year, for administration that never gets harder. Once a hire has settled and you know they are staying, the sum changes, and moving them across is routine.
The multi country argument is the strongest one an EOR has, and it does not apply to you. A single UK employee of an overseas company is precisely what a direct payment scheme was built for.
With a UK company you can register an ordinary PAYE scheme and employ people directly, as set out in our note on payroll options for a UK subsidiary. Paying an EOR to employ your own staff in a country where you already have a company is a cost with very little on the other side of it.
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, the statutory pay, 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: the major EOR platforms publish UK pricing of roughly £470 to £550 per employee per month, against £157 a month per scheme for a DPNI scheme run for you. Both of those are fees for administering the payroll. On top of either sits the salary, the workplace pension, and employer's secondary National Insurance, which an employer based in the EEA generally owes on a UK employee whichever route it uses, and which is the employer's cost rather than the employee's. Our full cost comparison sets it all out properly, including the one off charges and the extras that are easy to miss on either side.
A quick illustration
Take a fictional Norwegian maker of marine coatings, wanting one technical sales rep in Plymouth for twelve months to find out whether the UK is worth a proper push. Priced both ways at 2026/27 rates, an EOR comes to somewhere around £5,600 to £6,600 in fees across the year, and a DPNI scheme to nearer £1,900. Those are fees only, and the salary, the pension and employer's National Insurance sit on top of either, so the gap between the two routes is the gap in what they charge to run it. They choose the EOR, and they are right to. If the trial fails they end a contract with notice instead of closing a scheme with HMRC, and they never become a UK employer for a job that may not exist in month thirteen. If it works, they move the rep onto their own scheme in year two, and the arithmetic finally goes the other way.
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.
On the fee for running the payroll, almost always. The published platform rates sit at roughly £470 to £550 per employee per month, against £157 a month per scheme for a DPNI scheme run by a specialist, at 2026/27 rates. Salary, pension and employer's National Insurance sit on top of either. 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.
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.
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.
An EOR can normally have someone employed within days, because the scheme is already there. A direct payment scheme takes roughly four to eight weeks to build with HMRC, 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.
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.
Tell us where the company is registered, where the employee sits and roughly what you are paying. We will confirm the right route and send a fixed monthly fee, and we will say so if an EOR is the better answer for you. Within one UK business day.
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