What is an Employer of Record and how does it work?

An Employer of Record (EOR) is a third-party provider—like Smart Outsourcing Solution (SOS)—that legally hires staff on your behalf. You manage daily work; we handle employment contracts, taxes, payroll, and compliance. It’s ideal for fast, risk-free global hiring without opening a local entity.

How can I hire staff in the Philippines without opening a local entity?

Use an Employer of Record (EOR) like SOS. We legally employ your hires, issue compliant contracts, and manage payroll. You gain full operational control—without the cost, delay, or risk of setting up a local company.

Is hiring through an EOR legal and compliant in the Philippines?

Yes. SOS is registered with DOLE, PEZA, and BIR. We file all tax and benefit contributions (SSS, PhilHealth, Pag-IBIG) and issue local-compliant payslips. Your team is fully compliant under Philippine labour law.

What’s the difference between a PEO and an EOR?

A PEO co-employs your staff within your home country. An EOR—like SOS—legally employs workers abroad under its own local entity. This means you don’t need to register a company in the Philippines or worry about local tax exposure.

What risks or disadvantages come with the EOR model?

While EORs simplify global hiring, risks include vendor lock-in, limited control over local processes, or benefit misalignment if not properly managed. Choose an EOR with legal and cultural expertise in your target country.

Will using an EOR trigger permanent-establishment (PE) risk?

No. EOR structures are specifically designed to avoid PE risk. SOS ensures your team is legally employed under our entity, without exposing your business to corporate tax liability in the Philippines. PE risk stays low if you avoid direct local revenue activities.

How long does it take to hire through an EOR?

SOS can legally onboard your hires within 5–10 business days. We handle employment contracts, compliance checks, payroll setup, and benefits enrolment. This makes EOR ideal for urgent hiring or market entry without entity setup delays.

What happens if I need to terminate an employee hired via EOR?

SOS handles the termination process according to Philippine labour laws, including notice periods, severance, and final pay. We reduce legal exposure and ensure compliant offboarding while supporting your operational needs.

What mandatory benefits do employees receive in the Philippines?

EOR-hired employees in the Philippines receive all required benefits including SSS, PhilHealth, Pag-IBIG, 13th-month pay, and statutory leave entitlements. SOS handles all enrolments, contributions, and payslip generation to ensure compliance.

Global Employer of Record (EOR) Legislation Library

One Place for Global EOR Legal Guidance

Looking to hire internationally without opening a local entity?
Use this centralised legislation library to explore country-specific employment laws, EOR compliance rules, and regulatory links that affect how you scale your remote team legally and efficiently.

Ideal for startup founders, HR teams, and legal leaders seeking clarity on cross-border employment.

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Browse EOR Compliance by Country

Philippines

United Kingdom

United States

Australia

Singapore

ISingapore IR21 & IR8A tax obligations

Global Guidance

⚠️ This library is updated quarterly. Always consult legal counsel before making employment decisions.

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Quick FAQ: Understanding Employer of Record (EOR) Compliance

What is an Employer of Record (EOR)?

An Employer of Record (EOR) is a third-party company that legally employs workers on your behalf in another country. It handles contracts, payroll, tax, and benefits, while you manage the work. This allows you to scale internationally without opening a legal entity.

Why is EOR legislation important for global hiring?

Understanding EOR-related legislation ensures you’re compliant with labour, tax, and regulatory requirements in each country. It helps reduce legal risk, avoid penalties, and ensure ethical employment practices—especially when hiring in places like the Philippines, UK, or Australia.

Is using an EOR legal and compliant across countries?

Yes, when partnered with a licensed provider, EOR hiring is fully legal and widely used by startups and enterprises. The EOR ensures compliance with local labour codes, tax filings, and employment regulations—helping you avoid permanent establishment (PE) risk.

What countries have clear EOR guidelines or frameworks?

Countries like the Philippines, UK, US, and Australia have well-documented frameworks for employment compliance, taxation, and benefits. Our legislation library links directly to official sources so you can review laws and registration requirements for each region.

How does EOR hiring avoid permanent establishment (PE) risk?

EORs are designed to limit your legal footprint. Since the EOR becomes the legal employer, you’re less likely to trigger PE risk. However, this depends on employee roles, authority, and local law—so reviewing each country’s PE criteria is essential.

What are the typical costs involved in EOR hiring?

Smart Outsourcing Solution offers affordable Employer of Record (EOR) services starting at just $190 per head per month. Our flexible plans scale with your team size and compliance needs, providing a cost-effective solution for global hiring, payroll, and legal workforce management.