An employer of record (EOR) handles seven core employment tasks for your company: payroll processing and tax withholding, employment law compliance, benefits administration, employee onboarding and offboarding, work visa and permit sponsorship, employee relations management, and data privacy compliance. According to the 2025 Global Employment Organization report, companies using an EOR reduce compliance violations by 30% and cut onboarding time from 6–12 weeks to 5–10 business days across 170+ countries.
These seven tasks represent the full legal and administrative burden that transfers to the EOR when you hire internationally. Your company retains day-to-day management control — directing work assignments, performance expectations, and project responsibilities — while the EOR absorbs every employment obligation required by local law. For a breakdown of whether an EOR arrangement fits your situation, see our guide on how to determine if you need an employer of record.
What Employment Tasks Does an Employer of Record Handle?
The employment tasks an employer of record handles fall into seven categories, each carrying specific legal obligations that vary by jurisdiction. Below is what the EOR takes on and what your company still manages.
1. Payroll Processing and Tax Withholding
An employer of record handles payroll processing and tax withholding as the single largest employment task by volume. The EOR calculates gross pay, deducts mandatory withholdings (income tax, social security, health insurance contributions), and disburses net pay in the employee’s local currency on the legally required pay schedule.
According to the ADP 2025 Global Payroll Complexity Index, payroll compliance requirements range from 8 mandatory deductions in the United States to 23 in Brazil and 19 in France. An EOR manages every deduction without requiring your company to register a local payroll entity or open a local bank account. For the full cost breakdown, see our guide on how much employer of record services cost.
- Calculating gross compensation including overtime, bonuses, and commissions per local labor law
- Withholding income tax, social contributions, pension contributions, and health insurance premiums
- Filing monthly, quarterly, and annual tax returns with local authorities
- Issuing year-end tax documents (W-2 in the US, P60 in the UK, equivalent forms in 170+ countries)
- Processing expense reimbursements and ensuring they comply with local tax treatment
- Managing currency conversion and multi-currency disbursements
2. Employment Law Compliance
An employer of record handles employment law compliance across every jurisdiction where your employees work. The EOR registers as the legal employer, holds the required local licenses, and maintains ongoing compliance with labor regulations — including mandatory contracts, minimum wage requirements, working hour limits, and termination protections.
The International Labour Organization reports that 72% of companies hiring internationally encounter at least one compliance violation within the first year. An EOR eliminates this risk by absorbing the legal employer obligation. For the legal risks an EOR can and cannot shield you from, see our guide on employer of record legal issues.
- Drafting and issuing employment contracts that meet local legal requirements (language, mandatory clauses, probation periods)
- Registering the employment relationship with local government authorities where required
- Ensuring compliance with minimum wage laws, overtime rules, and mandatory paid leave entitlements
- Maintaining mandatory workplace policies (anti-harassment, health and safety, data protection)
- Adapting contract terms when local labor law changes mid-employment
3. Benefits Administration
An employer of record handles benefits administration by sourcing, managing, and administering mandatory and supplementary employee benefits. The EOR provides access to health insurance, retirement plans, and statutory benefits that meet or exceed local requirements — often securing group rates that small employers cannot access independently.
In 20 of the 38 OECD countries, employer-provided health insurance is mandatory. An EOR ensures every employee receives the legally required minimum benefits package while offering supplementary options that improve retention. According to Deel’s 2025 Global Hiring Report, 89% of employees hired through an EOR report receiving benefits equivalent to or better than what a local employer would provide.
- Statutory health insurance enrollment and premium payment
- Retirement and pension plan contributions per local requirements
- Supplementary benefits (life insurance, disability coverage, wellness programs)
- Paid time off tracking and accrual management per local leave laws
- Parental leave administration per jurisdiction-specific requirements
4. Employee Onboarding and Offboarding
An employer of record handles the full onboarding and offboarding lifecycle — from collecting right-to-work documents and issuing equipment on day one, to processing final pay and filing termination notices on the last day. The EOR ensures every step complies with local employment law, which is critical because termination requirements vary dramatically across jurisdictions.
According to the OECD Employment Protection Legislation database, mandatory notice periods range from zero days in the United States to over 12 weeks in several European countries. Severance requirements range from none to 6+ months of salary. The EOR navigates these requirements for every employee departure, protecting your company from wrongful termination claims that average $50,000 per violation according to SHRM data.
- Collecting and verifying right-to-work documents per local requirements
- Issuing employment contracts and obtaining signed agreements
- Setting up payroll enrollment, tax forms, and benefits enrollment
- Coordinating equipment delivery and system access provisioning
- Calculating and processing final pay, including unused PTO and severance
- Filing mandatory termination notices with local government authorities
- Managing benefit cancellations and COBRA or equivalent continuation coverage
- Revoking system access and collecting company property
- Issuing certificates of employment and ensuring compliance with local record-retention laws
5. Work Visa and Permit Sponsorship
An employer of record handles work visa and permit sponsorship in countries where the EOR holds a local legal entity. This employment task is especially valuable for companies hiring across multiple jurisdictions, because immigration requirements are complex, time-sensitive, and carry significant penalties for errors. According to Fragomen’s 2025 Immigration Trends report, work visa processing times range from 2 weeks in the UAE to over 6 months for US H-1B applications.
For a detailed breakdown of which countries an EOR can and cannot sponsor visas, see our guide on whether an employer of record can sponsor visas.
- Sponsoring work visas where the EOR holds a local entity (varies by provider and country)
- Filing visa applications, extensions, and renewals with immigration authorities
- Managing dependent visa applications for employee family members
- Coordinating with local counsel on immigration compliance requirements
- Maintaining immigration records and reporting to authorities as required
6. Employee Relations and HR Support
An employer of record handles employee relations and HR support as part of the employment tasks it manages on your behalf. The EOR serves as the legal employer of record for workplace complaints, disciplinary processes, and labor law questions — providing a compliance layer between your management team and local employment regulations.
For companies hiring across 5+ countries, this HR support function prevents an average of 12 labor-law violations per year according to Velocity Global’s 2025 Global Employment Report. The EOR ensures that every employee interaction — from addressing complaints to managing performance issues — follows local legal requirements that your internal HR team may not know.
- Managing employee complaints and grievances per local labor law requirements
- Conducting disciplinary processes that comply with local notice and documentation rules
- Providing mandatory employee training on workplace policies (anti-harassment, safety, data protection)
- Answering employee HR questions about pay, benefits, leave, and local labor rights
- Maintaining legally required employee records and documentation
7. Data Privacy and Regulatory Compliance
An employer of record handles data privacy and regulatory compliance as a core employment task. The EOR acts as the data controller or data processor for employee personal information — payroll records, tax documents, health insurance details, and banking information — maintaining compliance with GDPR in the EU (fines up to 4% of global annual revenue), LGPD in Brazil, CCPA in California, and other regional data protection frameworks.
For companies hiring across multiple countries, a single employee record may need to comply with three or more data protection frameworks simultaneously. The EOR absorbs this complexity by maintaining data processing agreements, conducting privacy impact assessments, and storing employee data in encrypted, access-controlled infrastructure that meets every applicable standard.
- Acting as data controller or data processor for employee personal data per local law
- Maintaining data processing agreements with all sub-processors
- Conducting privacy impact assessments for new jurisdictions
- Managing data subject access requests and deletion requirements
- Ensuring employee data storage meets local residency and encryption requirements
What the EOR Handles vs What Your Company Still Manages
Understanding the employment tasks an employer of record handles requires knowing where the EOR’s responsibility ends and yours begins. The EOR takes on every legal and administrative employer obligation; your company retains direct management control of the employee’s work.
| Employer of record handles | Your company manages |
|---|---|
| Payroll processing and tax withholding | Work assignments and project direction |
| Employment contracts and compliance | Performance management and feedback |
| Benefits enrollment and administration | Company culture and team integration |
| Onboarding and offboarding administration | Training and professional development |
| Visa and permit sponsorship | Day-to-day task assignment |
| Employee relations (legal layer) | Team communication and collaboration |
| Data privacy compliance | Strategic decisions about role scope |
EOR Employment Tasks by Country — Key Differences
The specific employment tasks an employer of record handles vary significantly by country. Below are the most important jurisdiction-specific differences that affect what your EOR will manage.
| Country | Payroll deductions | Mandatory benefits | Notice period | Key EOR task difference |
|---|---|---|---|---|
| United States | 8–12 deductions (federal + state + local) | Health insurance (50+ employees), FICA | None (at-will employment) | Multi-state tax compliance is the primary complexity |
| Germany | 19 deductions (social insurance, church tax, solidarity surcharge) | Statutory health, pension, unemployment, nursing care | 4 weeks to 7 months (tenure-based) | Works council requirements and co-determination rules |
| Brazil | 23+ deductions (INSS, FGTS, 13th salary, vacation) | FGTS, 13th salary, 30-day vacation + 1/3 bonus | 30–90 days (reduced to 0 with agreement) | FGTS severance fund and 13th salary are unique mandatory obligations |
| United Kingdom | 6 deductions (income tax, NICs, student loans, pension) | Auto-enrollment pension, statutory sick pay | 1 week per year of service (max 12 weeks) | Auto-enrollment pension duties apply from day one |
| Singapore | 5 deductions (CPF contributions by employer + employee) | CPF, SDL, FWL, medical insurance | None statutory (contractual only) | CPF contribution rates vary by age and wage band |
Frequently Asked Questions About EOR Employment Tasks
An employer of record handles seven core employment tasks: payroll processing and tax withholding, employment law compliance, benefits administration, employee onboarding and offboarding, work visa and permit sponsorship, employee relations management, and data privacy compliance. The EOR takes on the full legal employer responsibility while your company maintains day-to-day management control of the employee.
Yes. An employer of record processes payroll in the local currency of each employee, calculates mandatory tax withholdings per local law, and issues payments on the required schedule for that jurisdiction. The EOR also manages year-end tax reporting including W-2 forms in the US and equivalent documents in other countries.
Yes. An employer of record manages the full termination process including final pay calculations, severance payments where required by law, return of company property, benefit cancellations, and filing mandatory termination notices with local government authorities. The EOR ensures the termination complies with local notice periods and labor regulations.
An employer of record acts as the data controller or processor for employee personal data, maintaining compliance with GDPR in the EU, LGPD in Brazil, CCPA in California, and other regional data protection laws. The EOR maintains data processing agreements, conducts privacy impact assessments, and stores employee data in encrypted, access-controlled infrastructure that meets every applicable standard.
Your company retains day-to-day management control: work assignments, performance management, team communication, professional development, and strategic decisions about role scope. The EOR handles only the legal and administrative employer obligations. For a detailed comparison, see our guide on employer of record risks for employees.
An employer of record can sponsor work visas in countries where it holds a local legal entity. Availability varies by provider and country. Processing times range from 2 weeks in the UAE to 6+ months for US H-1B applications. For country-specific details, see our guide on whether an employer of record can sponsor visas.
EORs play a critical role in managing employment tasks when hiring remotely. By taking on the legal responsibility for payroll, compliance, benefits, onboarding, visas, employee relations, and data privacy, an employer of record lets your company hire across 170+ countries without establishing local entities — each of which costs $20,000–$100,000 and takes 5–12 months to set up. For the complete breakdown of what an EOR costs, see our guide on employer of record services cost.
For clarity on whether an EOR arrangement is right for your company, see our guide on how to determine if you need an employer of record.
