EOR vs Own Entity: When Does It Pay Off?
Model the all-in cost of hiring through an Employer of Record against running your own local entity, across 40 countries, and find the headcount where owning the entity becomes cheaper. Every assumption is overrideable with your own figures.
Limited data. Entity setup or compliance figures are not modelled for this country, so the entity column understates true cost. Treat the verdict as directional only.
| Cost component | Basis | EOR | Own entity |
|---|---|---|---|
| EOR service fees | — | ||
| Entity setup | — | ||
| Annual compliance | — | ||
| Payroll bureau fees | — | ||
Entity cost starts high, you pay setup up front, then grows slowly. EOR has no entry cost but scales with every month and every head. The bars show running totals at each year-end.
| Employees | Cheaper | EOR total | Entity total | Difference |
|---|---|---|---|---|
| Your team break-even |
| Assumption | Value | Note |
|---|---|---|
| EOR fee | $ / emp / mo | |
| Annual compliance | $ / year | Small subsidiary, audit-exempt |
| Payroll bureau fee | $ / emp / mo | |
| Entity setup | One-time, legal & filing | |
| Employer contributions | of gross wage | Context only — not in cost model |
| Corporate tax | headline rate | Context only — not in cost model |
This is a planning estimate, not tax, legal, or payroll advice. We compare structural overhead only: the EOR service fee against entity setup plus annual compliance plus a payroll bureau fee, and deliberately exclude salary, employer social contributions, and corporate tax, which apply under either structure. Setup, compliance, and bureau figures come from the Whichapp EOR entity benchmark dataset, drawn from company registrars, Big Four advisory disclosures, and bureau rate cards, captured in May 2026. Break-even headcount is the team size at which cumulative entity cost over your chosen horizon drops below cumulative EOR fees. Validate every figure against a local quote before any board decision.
A cheap sticker price is not the whole story. Below the break-even headcount, an EOR keeps you flexible with no entry cost; above it, the EOR fee compounds past what an owned entity would cost to run. Use this model to set a defensible number for the build-vs-buy decision, then take it into a real quote. The crossover moves with salary band, contract term, and the FX spread on payouts. Re-run it with your own figures before you commit.