How Much Does an EOR Cost in 2026?
An employer of record charges a few hundred dollars per employee each month. Statutory employer costs move the invoice far more. Rates checked August 2026.
Key takeaways
- An employer of record charges a platform fee in a market range of roughly $200 to $600 per employee per month. Across that entire range, the annual difference is about $4,800 per employee.
- Statutory employer contributions are set by the country you hire in, not by your provider. On a 120,000 salary they run about 7.7% in the United States, about 14.4% in the United Kingdom, and about 15.1% in Germany.
- That country difference is worth close to 9,000 a year per employee, roughly double the swing between the cheapest and the most expensive platform fee.
- Contribution ceilings change the answer as salary rises. Germany caps every contribution, so at a 250,000 salary its employer cost falls to about 7.2%, below the United Kingdom's 14.7%, which has no ceiling at all.
- Compare providers on what actually varies between them: which countries they run payroll in themselves, what the deposit and notice terms are, and whether the quote is all-in. Do not compare them on a number the government sets.
You asked three providers for a quote and got three different per-employee fees. That number is the one everyone compares. It is also the smallest number on your invoice. Here is what actually sets the price.
An employer of record typically charges a platform fee of roughly $200 to $600 per employee per month. That fee is rarely the largest line on the invoice. Statutory employer contributions, set by the country you hire in rather than by the provider, add between about 7.7% and 15.1% of salary across the three markets below.
Why Do Two EOR Quotes for the Same Hire Look So Different?
Because an EOR invoice is three separate things, and providers bundle them differently.
The first is the platform fee. That is the provider's own margin, the number in the sales conversation, and the only part of the invoice the provider controls.
The second is statutory employer cost: pension, health, unemployment and accident contributions that the employing country requires from any legal employer. The EOR collects this from you and remits it. No provider sets it, discounts it, or negotiates it.
The third is pass-throughs: benefits premiums, currency conversion, a security deposit, and whatever the local contract obliges at termination.
Two quotes for the same role diverge for two reasons. One provider quotes the platform fee alone and shows statutory cost later, while another quotes an all-in monthly figure. Or the roles sit in different countries, in which case the quotes were never comparable to begin with. Ask which of the three you are looking at before you compare anything.
What Does the Platform Fee Actually Buy?
Entity access, payroll processing, local employment contracts, statutory filings, and someone accountable when a filing is late.
Pricing arrives in two shapes. A flat per-employee monthly fee is predictable and easy to budget. A percentage of payroll looks cheaper on a junior salary and climbs fast on a senior one, because the fee rises with the salary while the work behind it does not.
Neither shape is dishonest. They favour different hires. A team converting five junior contractors into employees wants a different structure than a company hiring two staff engineers at four times the salary. Price the model against your actual salary band, not against the headline number.
What Do Statutory Employer Costs Add?
This is the part of the invoice nobody quotes you upfront, and the part that moves it most. All rates below were checked on 6 August 2026.
| Market | Employer statutory contributions | Ceiling |
|---|---|---|
| United States | Social security at 6.2% of wages and Medicare at 1.45%. Federal unemployment tax is 6.0% on the first $7,000 of wages, falling to 0.6% for employers who pay state unemployment tax in full and on time. | Social security stops at $184,500 of wages in 2026. Medicare has none. |
| United Kingdom | Employer Class 1 National Insurance at 15% on earnings above the secondary threshold of £5,000 a year, for the tax year 6 April 2026 to 5 April 2027. | None above the threshold. |
| Germany | Pension at 9.3%, health at 7.3% plus the employer half of the 2.9% average supplementary rate, unemployment at 1.3%, and long-term care at 1.8%. | €101,400 a year for pension and unemployment. €69,750 a year for health and long-term care. |
Two things are missing from that table on purpose. US state unemployment insurance sits on top of the federal rate and varies by state and by your own claims history. German statutory accident insurance is employer-only and additional to every percentage listed. Both are real costs and neither has a single national number.
Now put a salary through it. On 120,000, in each market's own currency:
The United States comes to about 9,220. Social security takes 7,440, because the whole salary sits below the 184,500 ceiling. Medicare takes 1,740. Federal unemployment tax adds 42. That is roughly 7.7% of salary, before state unemployment insurance.
The United Kingdom comes to 17,250, which is 15% of everything above the 5,000 threshold. That is about 14.4%.
Germany comes to about 18,110: pension 9,430, unemployment 1,318, health 5,092, the employer half of the supplementary rate 1,011, and long-term care 1,256. That is about 15.1%.
The spread across three markets is 7.4 percentage points of salary, close to 9,000 a year on that one hire. The spread across the entire platform fee range is about 4,800. Your choice of country is worth roughly twice your choice of provider, and it never appears in a pricing comparison.
Why Does the Cheapest Country Change With Salary?
Because ceilings do not scale, and this is where most cost models quietly break.
Run the same three markets at a 250,000 salary. Germany does not move. Every German contribution is already capped, so the employer still pays about 18,110, which is now about 7.2% of salary. The United States rises to roughly 15,110, because Medicare is uncapped even though social security stops at 184,500, so about 6.0%. The United Kingdom rises to 36,750, because the 15% applies to everything above 5,000 with no ceiling, so about 14.7%.
The ranking has reversed. At 120,000, Germany was the most expensive of the three and the United Kingdom sat in the middle. At 250,000, Germany is close to the United States and the United Kingdom costs more than twice either.
So "Germany is expensive" is only true at some salaries. Any budget built on a single blended percentage is wrong at both ends of your salary band. Model your actual offers.
What Else Lands on the Invoice?
Four things, and they are the ones that surprise finance teams after signature.
A security deposit is standard practice: most providers hold the equivalent of a month or more of payroll against termination liability. It is refundable, and it is still cash off your balance sheet from day one, so ask for the amount and the release terms in writing.
Termination cost is the one that bites. Notice periods and severance in much of Europe and Latin America are set by statute rather than by negotiation, and the EOR will invoice you for what the local contract obliges. A cheap monthly fee attached to a twelve-month minimum term and a long notice period is not cheap.
Benefits are quoted as a premium per employee, and in markets with mandatory supplementary cover the floor is set by law rather than by your budget.
Currency conversion is the quietest of the four. Payroll is funded in your currency and paid in theirs, and the spread on that conversion is charged every cycle, on every employee, whether or not it appears as a line item. Ask what the conversion costs, in basis points, before you sign.
So What Should You Compare Instead?
Compare the things that actually differ between providers.
Ask which countries the provider runs payroll in with its own entity, and which it subcontracts to a local partner. That distinction decides who answers when a filing is wrong.
Ask whether the quote is all-in, and get the statutory employer cost for your specific country and salary in writing. Any provider that will not produce that number for a named role is quoting you the smallest part of the bill.
Ask what leaving costs: the notice period, the minimum term, and the deposit release schedule.
Then ask what the money movement costs. Companies can fund payroll in fiat or stablecoins, and workers can choose to receive stablecoins or their local currency. Toku handles the conversion in either direction, and the conversion cost is an itemised line rather than a spread folded into the exchange rate. On a distributed team paid monthly, that line compounds.
The provider you pick should be the one that is honest about the two thirds of the invoice it does not control.
Ready to Price Your Global Payroll?
The per-employee fee is the easiest number to compare and the least useful one. Country choice, salary band and exit terms move the total far more, and all three are knowable before you sign anything.
If you want the real number for a specific hire in a specific country, book a demo and we will price it with the statutory cost included. You can also see how our own pricing is structured on the Toku pricing page.
Statutory rates and thresholds above were checked on 6 August 2026 against IRS Topic No. 751 and IRS Topic No. 759, the GOV.UK employer rates for the 2026 to 2027 tax year, and Germany Trade and Invest. Contribution ceilings and rates change annually. Verify current figures before budgeting.
Toku provides compliance infrastructure and is not a law firm. This content is for informational purposes only and does not constitute legal or tax advice. Consult your legal counsel for jurisdiction-specific guidance.
