How to hire remote employees in other countries (2026)

You can hire someone in another country in three ways: as an independent contractor, through an employer of record (EOR) that employs them for you, or through your own company in their country. Most small remote teams start with contractors, move key people onto an EOR once the relationship looks like employment, and only set up a local entity when they have a real cluster of people in one place.

This guide covers when each route fits, how tax offices decide whether a "contractor" is really an employee, what the main platforms charge (prices checked on 25 October 2026 on each company's own pricing page), what employment actually costs on top of salary in three countries, and a hiring process that holds up.

The three ways to hire someone abroad

The right route depends on how the person will work with you, not on what you'd prefer to call them.

Independent contractor

A contractor runs their own business and sells you a service. You sign a services agreement, they invoice you, and you pay the invoice. You don't run payroll, withhold their tax or pay employer social security. They handle their own tax in their country.

It fits project work, specialist help, part-time or short engagements, and people who already freelance for several clients. It stops fitting when the person works full time for you only, on your schedule, using your tools, under your direction. At that point most tax offices would see an employee (more on that below).

Employer of record (EOR)

An EOR is a company with its own local entity that becomes the legal employer of your hire. It issues a local employment contract, runs payroll, withholds tax, pays employer contributions and administers benefits. You direct the day-to-day work and pay the EOR the salary, the employer costs and a monthly fee.

It fits when someone works like a real team member, when you want to offer proper employment (leave, benefits, local protections), or when you can't risk a misclassification finding. It costs far more than a contractor plan, and the employment law of the worker's country still applies, including notice periods and severance when you let someone go.

Your own local entity

You register a subsidiary or branch in the country, register as an employer, and run local payroll yourself or through a payroll provider. You get full control and no per-head EOR fee, but you take on company registration, local accounting, tax filings and employment law compliance.

It usually only makes sense once you've got enough people in one country that the EOR fees outweigh the cost of running a company there, or when you need a local presence for customers, licences or a physical office. If your question is about where to put your main company rather than your team, see setting up a US LLC as a non-US founder.

Decision table

The platform prices in the table are list prices from the comparison further down.

Misclassification: when a contractor is really an employee

A contractor is really an employee when the working relationship looks like employment, whatever the contract says. Tax offices in the US, Australia and the UK all look past the label at how the work actually happens, and the rules of the worker's own country apply too.

The IRS common-law test groups the evidence into three areas:

• Behavioural control: does the company control, or have the right to control, what the worker does and how they do the job?
• Financial control: does the payer control the business side of the work, such as how the worker is paid, whether expenses are reimbursed, and who provides tools and supplies?
• Type of relationship: are there written contracts or employee-type benefits like a pension, insurance or vacation pay, is the relationship expected to continue, and is the work a key part of the business?

The IRS says no single factor decides it. The US Department of Labor runs its own test under the Fair Labor Standards Act and warns that misclassified workers can miss out on minimum wage and overtime pay.

The Australian Taxation Office looks at the legal rights and obligations in the contract, weighing indicators such as:

• Control: whether your business has the legal right to control how, where and when the work is done.
• Integration: whether the worker serves in your business or provides services to it while furthering their own business.
• Mode of payment: paid for time worked, or paid to achieve a specific result, often for a fixed fee.
• Delegation: whether the contract gives a genuine, usable right to subcontract or delegate.
• Tools and equipment: who provides them, and whether you reimburse them.
• Risk and goodwill: who bears the cost of defects, and whose business builds goodwill from the work.

The ATO also says that if you hire a company, trust or partnership, that's a contracting relationship for tax and super purposes, because an employee must be a natural person.

In the UK, GOV.UK guidance says someone is probably self-employed if most of these apply: they bid or quote for work, aren't under direct supervision, invoice for their work, pay their own tax and National Insurance, and don't get holiday or sick pay. Where a worker supplies services through their own limited company, the off-payroll working rules (IR35) aim to make them pay roughly the same tax as an employee if they'd be an employee working directly. In most cases the client decides the worker's status, but for small clients outside the public sector, the worker's own company decides.

What it can cost you

The consequences are back taxes, contributions and penalties, plus whatever employment rights the worker can claim.

• US: the IRS says a business that treats an employee as a contractor without a reasonable basis may be held liable for employment taxes for that worker.
• Australia: the ATO lists PAYG withholding penalties, the super guarantee charge (the missed super plus nominal interest and an administration fee) and additional penalties of up to 200% of that charge. It also notes that sham contracting is a contravention of the Fair Work Act 2009.

Remember that the worker's country has its own test too. A contractor in Portugal or the Philippines is judged under local law, not just under the rules where your company sits.

EOR and contractor platforms compared

EOR list prices ran from US$459 to US$699 per employee a month on 25 October 2026, and contractor plans from US$29 to US$49. All figures below are "from" prices on each company's own pricing page, checked 25 Oct 2026, and exclude salary, employer contributions and benefit premiums.

What the pages say is included:

• Deel: EOR in 130+ countries with managed payroll, tax filings, and HR, legal and tax support. Benefits listed include healthcare, mental health and pensions. For offboarding, Deel says local labour laws govern termination and it helps with notice periods and severance. A current promotion credits three months of platform fees, but only on a minimum two-year order form signed between 15 July and 31 December 2026, and early termination means paying full list price for the whole term.
• Remote: EOR in 90+ countries with local payroll, compliance and localised benefits. Contractor Management Plus adds US$100,000 indemnity per contractor, up to US$1 million per company. Contractor of Record includes uncapped misclassification indemnity and IP transfer through Remote IP Guard. Remote for Startups gives pre-seed to Series A companies 15% off EOR and Contractor Management for the first 12 months.
• Oyster: EOR in 120+ countries, with setup, onboarding, HR expert access and processing terminations included in the fee. Benefits are a separate add-on with no listed price. The contractor plan includes a misclassification analyser.
• Multiplier: the EOR fee covers contracts, payroll, tax filings, benefits administration, onboarding and HR support. Its pricing page also advertises three months free when you start hiring globally, ending 31 December.
• Pebl (formerly Velocity Global): the old Velocity Global pricing page now redirects to Pebl, and we couldn't find a published price, so ask for a quote.

None of these pricing pages says how employee equity is handled. If you plan to grant options to EOR employees, ask the provider how they handle local tax reporting for equity before you sign, and get local advice on the grant itself.

Paying contractors

For a few contractors, a cheap transfer service is enough; a contractor platform earns its fee once you need contracts, invoice approval and compliance checks in one place.

• Wise Business (Australia): free to open on Basic, AU$65 setup for Advanced. Currency conversion transfers cost from 0.19%, same-currency cross-border transfers AU$8, and Swift transfers 2.39 EUR. Batch payments are included.
• Payoneer: popular with freelancers. Receiving from another Payoneer balance is free, receiving into a non-local currency account costs 1% (minimum US$1), and withdrawals with currency conversion cost 1.2% to 4%. There's a US$29.95 annual fee if the account receives less than US$6,000 in any 12 consecutive months. Payoneer notes fees vary by country and account type.
• Contractor plans: Remote Contractor Management (from US$29), Oyster Global Contractors (from US$29), Multiplier (from US$40 billed annually) and Deel (from US$49) generate localised contracts, collect invoices and pay out in many currencies.

Whichever you use, the contractor should invoice you, and you should keep the contract, invoices and proof of payment together.

Employer costs on top of salary, by country

Employer costs on top of gross salary range from a capped few per cent to more than a fifth of pay, depending on the country. These examples cover statutory social security only. They leave out income tax (usually withheld from the employee's pay), mandatory bonuses, insurance and any EOR fee.

Portugal

The general employer rate is 23.75% and the worker pays 11%, according to the Portuguese Government's social security page for employees of for-profit employers.

Worked example: on a gross monthly salary of €3,000, the employer contribution is €712.50 (23.75%), so the monthly cost before any EOR fee is €3,712.50.

Philippines

SSS contributions are 15% of the monthly salary credit, with the employer paying 10% and the employee 5%, under SSS Circular No. 2024-006, effective January 2025. The salary credit runs from PHP 5,000 to PHP 35,000, and the employer also pays a small Employees' Compensation amount (PHP 10 or PHP 30). At the top bracket the employer pays PHP 3,530 a month in total. On top of that, PhilHealth's premium is 5% of monthly basic salary, with an income floor of PHP 10,000 and a ceiling of PHP 100,000 (PHP 500 to PHP 5,000 a month in total). The advisory sets the total premium, not your share of it, and it covers 2025; we couldn't find a 2026 update, so confirm both with PhilHealth or your EOR.

Worked example: for a developer on PHP 60,000 a month, the SSS employer share is capped at PHP 3,530, and the total PhilHealth premium is PHP 3,000 (5% of PHP 60,000), split between you and the employee. The SSS cap is why statutory costs stay small at higher Philippine salaries.

Germany

Outside Saxony, the employer pays these shares in 2026: pension 9.3% (of 18.6%), unemployment 1.3% (of 2.6%), health 7.3% (of 14.6%) and long-term care 1.8% (of 3.6%), according to Techniker Krankenkasse. Each health insurer adds its own supplementary rate, also split equally; the 2026 average is 2.9%, per AOK, which also lists a 0.15% insolvency benefit levy. Pension contributions stop at a ceiling of €8,450 a month in 2026, per Deutsche Rentenversicherung.

Worked example: on €5,000 a month with an insurer charging the average supplementary rate, the employer pays €465 pension, €65 unemployment, €365 health plus €72.50 supplementary, and €90 care: €1,057.50, or about 21.15% of salary, before the insolvency levy and other levies.

The lesson from three countries: budget per country, not per hire. A US$600 EOR fee is a large share of a Philippine salary and a small one of a German salary.

A practical hiring process

A good remote hire comes from a clear role, a paid trial, a contract that assigns IP, and a plan for equipment and working hours.

Where remote founders find people

Start with your own network and communities, then post on remote job boards and freelance marketplaces such as Wellfound, We Work Remotely, Remote OK and Upwork. Write the role around outcomes, the time-zone overlap you need, and whether it's contract or employment, so you don't attract the wrong kind of applicant. To compare notes on where to find good hires with other remote founders, request an invite to Remote Builders.

Run a paid trial project

Give shortlisted candidates a small, real, paid task with a clear brief and a deadline. Pay for it, even if you don't hire them. It shows how they communicate in writing, which matters more than anything else in a remote team.

Contracts and IP assignment

Put everything in writing before work starts. For contractors, that's a services agreement; for EOR hires, the EOR issues the local employment contract and you'll usually sign a separate agreement with the EOR. Either way, check that it includes:

• IP and invention assignment: everything they create for you, including code, designs and inventions, is assigned to your company, with a promise to sign any further documents needed. Remote's Contractor of Record plan, for example, includes IP transfer through Remote IP Guard.
• Confidentiality and return of materials at the end.
• Termination terms that match local law.
• Governing law and how disputes are handled.

Templates from platforms are a start, not a finish. Ask a lawyer in the worker's country whether the IP assignment is enforceable there.

Equipment and time zones

Decide who supplies the laptop and software. Supplying equipment is normal for employees, but for contractors it's one of the indicators the ATO and IRS weigh towards employment. Then agree core overlap hours and how you'll work asynchronously. Our guide to running a team across time zones covers the routines.

Common mistakes

The most expensive mistakes come from treating a full-time team member as a contractor because it's cheaper.

• Calling a full-time, directed role a contract. The label doesn't decide status; the arrangement does.
• Comparing platform fees, not total cost. Employer contributions and benefits often outweigh the EOR fee.
• Signing a long minimum term for a promotion. Deel's current credit needs a two-year order form, with full list price owed if you leave early.
• Skipping the IP clause. Without a written assignment, ownership of the code can depend on local law.
• Ignoring offboarding. EOR employees keep local notice and severance rights, so budget for them from day one.
• Assuming equity is handled. None of the pricing pages we checked mentions equity.
• Paying through personal accounts with no paper trail. Keep the contract, invoices and payment proof together.

Checklist

1. Write the role: full or part time, outcomes, required overlap hours.
2. Decide the route: contractor for independent project work, EOR for team members, entity only for a lasting cluster.
3. Test the classification against the IRS, ATO or HMRC factors and the worker's local rules.
4. Get quotes from at least two EOR or contractor platforms and compare total monthly cost, not just the fee.
5. Check minimum terms, deposits and promotional conditions before signing.
6. Budget employer social security for that country using the official rate.
7. Run a short paid trial project.
8. Sign a contract with IP and invention assignment, confidentiality and termination terms.
9. Set up payment (Wise, Payoneer or a platform) and keep records.
10. Sort equipment, accounts and overlap hours before day one.
11. Review the arrangement every six months, and move a contractor to an EOR if the work has become employment.