Employer of Record vs. PEO: Which is right for your business?

Explore the differences between EOR and PEO services to find out which is best for your business 


When it comes to handling the human resources (HR) side of your company, outsourcing help may be the best route to go. 


There are two different kinds of outsourced HR services to consider: employer of record (EOR) and professional employer organization (PEO). Although the two share similar responsibilities, there is a substantial difference in the amount of control they have over employees. 


Continue reading to learn about the four main differences between PEO and EOR services to discover which of the two is right for your business. 


#1: Employee relationship

The biggest difference between PEO and EOR is the kind of relationship they have with your employees.


With an EOR, they become the legal employer of your employees and take on full liability over them. There are no limits to the amount of employees needed to work with an EOR.


PEOs act as a co-employer with your company, so employees are taken care of by both entities. Most PEOs require a minimum of at least five employees on your payroll in order to start a partnership.


#2: Services offered

Both PEO and EOR provide similar HR services such as benefits administration, workers’ compensation, and payroll management.


The main difference is that EORs handle international compliance and legal responsibilities, while a PEO requires a business to be registered in the state they are requesting services for. 


Learn more:

The benefits of partnering with a PEO for human resources


#3: Employee classifications

The types of employees at your business may influence your decision on an HR partner. 


An EOR would be great for a company that predominantly hires contractors or temporary employees. On the other hand, a PEO works best with a company that is looking for more long-term hires with potential to grow. 


To conclude

When it comes to your business, take into consideration the kind of help your company needs before choosing to work with a PEO or EOR.


If you’re looking for HR services for your small business, choose a credible PEO. By partnering with them, you are able to maintain full control of your employees’ experience at your company without a middleman. 


Need a PEO to partner with in the Orlando area?

Through our commitment to building trusted relationships, our clients find value in our compliance and advising services that go far beyond simply running payroll. PER is ready to tackle your payroll management and other HR needs, so that you can focus on your day-to-day business direction.


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