How EOR pricing really works, including the hidden costs

What you actually pay

An EOR quote has four layers, and only one of them is the fee. Gross salary, employer contributions, the provider fee and the cost of money together make up total employer cost.

Employer contributions are the biggest variable. They range from 4% in South Africa to 45% in Brazil, which dwarfs any difference between provider fees.

The four charges that are not on the pricing page

FX markup is first. If you fund in USD and payroll runs in Colombian pesos, the provider converts, and the margin on that conversion is rarely published. A margin of 1% to 3% on gross payroll is common, which can exceed the fee itself.

Deposits are second. Holding one month of payroll per employee is a working capital cost, not a fee, but it is real money out of your account.

Off-boarding fees are third. Some providers charge to run a termination, on top of the statutory severance you fund anyway.

Minimum terms are fourth. A twelve month commitment for a role you may not keep for twelve months is a cost, and it is the clause buyers regret most.

How to compare quotes properly

Build one spreadsheet per country, with gross salary, contributions, fee, FX, deposit and expected exit cost on separate lines. Compare total annual cost per hire, never fee per month.

Ask every provider the same four questions in writing: what is your FX margin, what deposit do you hold, what do you charge on exit, and what is the minimum term.

When the cheapest quote is the wrong one

A low fee attached to a partner entity in a difficult termination market is not a saving. You are buying process and liability, and the cheapest process is usually the thinnest one.

Price is one of our seven criteria and carries 20%. Compliance and entity ownership carries 25% for exactly this reason.