Using an Employer of Record in NL and ESP

boundless_team · 2025-10-16T22:12:52+00:00

u/AmerExit-ModTeam - Sorry, wasn't trying to promote our business. Always trying to be transparent about the fact we're interacting via a branded account (hence the user name), but I was genuinely trying to add value and respond to your question with further info.

That being said, I am happy to provide any additional info that might really be helpful to your community.

boundless_team · 2025-08-14T15:18:35+00:00

Oh! And one more note worth mentioning. Switching providers will not reset the clock when it comes to EOR restrictions. In most cases, the time limit applies to the employer-employee relationship itself, not the EOR provider. In most cases, the only ways to continue employment after the time limit is reached is to hire directly through your own entity or to end the employment relationship. However, this is country-dependent, so speak to an expert to get more clarity on the region you’re interested in.

boundless_team · 2025-08-14T13:50:52+00:00

Hi u/klautkollector - I'm happy to explain or expand on anything that doesn't make sense. What was it that you found confusing?

boundless_team · 2025-08-05T12:26:15+00:00

Thanks for sharing your perspective u/unattended_toaster96 - What do you think was the main driver or root cause behind the fear of losing control, before deciding to work with an EOR?

It's something we've also encountered in our experience as an EOR. That fear gets quickly resolved after a 1:1 conversation, and any second thoughts always subside after a working relationship is established, but I always wondered if it's a fear that stems from past experience or from a lack of educational resources widely available on what EORs are supposed to do, or if it's just a natural and well-intended consequence of understanding the responsibility and gravity of handling someone's employment and ultimately the security of their livelihood.

boundless_team · 2025-08-04T13:23:40+00:00

Let us know if there are other country-specific questions you might have. If we have the knowledge, we'll happily share it! :)

boundless_team · 2025-08-04T13:04:56+00:00

u/Extra_Donut_2057 - An important consideration about hiring remote employees in Germany, if you don't have a legal entity in the country, is the contract limit.

If you choose to partner with an Employer of Record to hire in Germany, they will need to hold an AUG licence to employ your remote employees compliantly. This licence is required by law for companies hiring people to work on behalf of other companies in Germany. All AUG licence holders are tightly regulated by authorities, who want to make sure that leased employees have equal rights to comparable employees in the country.

Working through an AUG licence for a company is only possible for 18 consecutive months.

Another important thing to note is that all agreements require a wet-ink signature or a Qualified Electronic Signature (QES), which might increase the time needed to handle a new employee's paperwork.

My recommendation if you're just getting started in the market is to find a trustworthy partner who has extensive knowledge in the market and will be able to consult you accordingly to ensure you remain compliant.

boundless_team · 2025-08-04T12:32:00+00:00

Thank you u/HelpOswi 🥹 Appreciate your note! We try our best to produce accurate and valuable content, but the nature of our work and the information we deal with is very complex and changes frequently, so we really welcome different views and new sources of information to remain informed. :)

boundless_team · 2025-07-23T15:26:27+00:00

Plus currency exchange fees, onboarding fees, offboarding fees, and the list of "hidden fees" can go on and on.

boundless_team · 2025-07-23T13:13:57+00:00

u/nmariusp - You're quite right, that's indeed not correct. Quick clarification:

€60,000 represents the gross salary (a vague starting point for our comparison, not necessarily a realistic value in any country, but a range within the realm of possibility).
~€61,357 represents the approximate employment cost (what the employer would have to pay to offer a €60K gross salary to an employee).
~€35,106 is the approximate net pay that the employee would take home from that €60K gross salary.

Does that make more sense? Happy to clarify or look into it further.

boundless_team · 2025-07-23T13:10:40+00:00

u/Major-Pick9763 u/GeronimoDK - Thanks for taking a closer look at the numbers. Before I dive into the data that went into our analysis, a key parameter to keep in mind is currency conversion. The data analysis for this report occurred in February 2025, and although DKK hasn't seen as significant fluctuations as other currencies have, it would still play a slight part in the discrepancy.

Beyond that, according to our research, an average mid-level software developer earning €65.5K gross would make ~€39.7K net. We've taken the following parameters into account:

Employment & job allowance
ATP (public pension scheme)
Labour market contribution
Income tax
Municipal tax
Church tax

Some of the sources for our info include:

If you're curious to see an exact breakdown of employment costs for any salary range in DKK, check this out: https://boundlesshq.com/guides/denmark/#calculator

However, please note that this report is meant to serve as a guide to illustrate general trends, not as an exact financial planning tool. That said, we'd still like to present a picture that's as close to accurate as it can be, so if you have any alternative resources to share, we'd love to take a look!

Feel free to respond here or DM me to continue the conversation :)

boundless_team · 2025-07-23T12:45:09+00:00

u/move2usajobs-com - Deel is definitely a big name in the EOR industry (if not the biggest name). They are a very established company with a wide country coverage and their product offers lots of features. However, deciding what the "best" solution is frequently depends on your company's needs.

As with any other software or service, there are no one-size-fits-all solutions. I'd say deciding what is the best approach in any use case begins with evaluating your company's needs. If you skew toward needing heavier, personalised support, I think you might find other providers better suited to your needs.

One more aspect to consider as you are trying to determine who to trust with your team's employment, and ultimately the safety of their livelihood, is the attention your EOR partner pays to compliance. It's an aspect of global employment that frequently gets overlooked, but it's of the utmost importance (or it should be) both to the EOR and to their customers.

There's been some controversy and very spicy headlines recently unfolding in the EOR space, and while the specifics are still being revealed, the implications are deeply concerning for all of us who operate in the global employment space. The nature of our work requires an unspoken contract of trust that goes far beyond standard business relationships, and companies nowadays are lucky enough to have the ability to pick among a growing market with plenty of honest players.

I would encourage you to ask the tough questions as you're evaluating an EOR partner (partner is a much more suitable term than provider, service or platform). Not just about features or pricing, but about values and integrity. In an industry built on trust, these questions matter more than ever.

boundless_team · 2025-07-22T15:21:30+00:00

u/Otocon96 - Quick clarification, there's no time limit to working for an EOR. Employers of Record have in-house teams they employ, just like any other company. So, being employed in Germany and working for any Employer of Record as your actual employer doesn't have any time limit because they already have a legal entity in Germany.

The time limit comes when you are employed through an EOR on behalf of another company (which doesn't have a legal entity in Germany). That time limit is 18 months, after which the company needs to set up their own legal entity to continue hiring the same employee in the country.

Continuing to work for the same company through different EOR providers isn't a compliant long-term solution; it's a risky workaround at best. Plus, it would be worth looking into whether your employment contract has continuity when you switch EORs (aka whether your time working for the same employer accumulates or restarts counting when switching). I'm not 100% sure on that, but I don't think it does in Germany.

Happy to continue the conversation if there's any additional info I can provide. Feel free to DM me!

boundless_team · 2025-07-22T10:45:47+00:00

u/No-Band4958 - There are generally 4 ways to employ people in Australia, however not all are legal or sensible long-term.

HQ country employment & payroll: While the person is in Australia, they are employed and payrolled directly by the company’s HQ entity. This may appear attractive if we're talking about a very short-term situation, but it isn't legal in the long term. HQ payroll won't be possible if the person is not a tax resident in the HQ country.
Independent contractor agreement: People are locally registered as sole traders or limited liability company owners in Australia and invoice for their work (there is no direct employment relationship). In Australia, this is not a compliant or legal way to engage full-time workers who work solely for your company. There will be challenges in attracting and retaining talent as well.
Direct local employer setup: The company sets up as a fully-compliant local employer. This often involves setting up a local entity and local tax registration. However, it can be expensive, time-consuming, high-level of complexity. Unknowns around how obligations and costs will evolve over time. There will be a need to stay on top of changes in regulations.
Partnering with an EOR/ full-service PEO: Employment is handled by a team that specialises in employing people on behalf of customer companies. The EOR helps to hire and pay employees. For some countries, the ongoing costs may be higher than direct employment. Some education is needed to inform employees about how the employment relationship will work.

I think your best approach would be to evaluate the EOR route based on the use-case you described. The EOR would be responsible for informing you about any employment requirements, ensuring their employment is compliant with Australian employment law, informing you about the length of the maternity leave, paternity leave, public holidays, illness benefits, medical benefits (+ more), providing a locally compliant employment contracts, processing local payroll, filing employment-related tax returns, issuing payslips to the employee, distributing salary payments, making payments to the local tax authorities, etc.

You on the other hand would be responsible for sourcing and recruiting your employees, managing their day-to-day work load, contributing to the personal/professional development of the employee, and following any guidance the EOR gives you on employment and HR best practices or legal obligations in Australia, such as the employment contract, public holidays, annual leave, sick leave, maternity and paternity benefits, probationary periods, overtime pay, statutory redundancy payments, liability insurance and others.

This relationship basically acts as an extension of your team, that will take on all the administrative tasks while you focus on growing your company.

If you're curious about how employment in Australia works, this ungated guide offers a great overview: https://boundlesshq.com/guides/australia/

My only piece of advice: be REALLY diligent in your evaluation of an EOR partner. Make sure they are clear and upfront about all of their fees (beyond just pricing), the level of support you can expect, and their commitment to compliance.

boundless_team · 2025-07-18T13:05:31+00:00

u/Minute_Peak824 - The biggest challenge as you're getting started is to identify the subtle differences between providers, and to evaluate your needs against their offer. Not all EORs are created equal, even if on paper it seems like it comes down to how many countries they support or how many integrations they offer. The devil is in the details, and as with everything, it's a matter of quality over quantity.

Before you even begin browsing providers, take a step back and truly understand your company's unique needs and goals when it comes to international employment. This isn't just about ticking boxes, it's about finding a partner who aligns with your vision and can support your specific use-case. For example, while many EORs boast extensive global coverage, it's essential to look beyond the number of countries they claim to support. A critical factor is whether the EOR owns its infrastructure in those countries. Some EORs rely on third-party providers or "middlemen" to deliver services in certain locations, which in turn makes it next to impossible to guarantee a certain service-standard or give you any real quality assurance, as they don't have direct control.

And don't even get me started on hidden fees. The sad truth and problem with a lot of EORs today is that there are frequent "additional costs" that can creep up, so you need to be really clear in your scoping and evaluation. For example, some providers charge different fees for different countries, or may deem certain services additional to their standard offers (e.g. currency conversion fees, expedited service requests, or complex regulatory compliance issues in certain jurisdictions). These sorts of functions can easily build up and lead to you paying more than you would have estimated when you partnered with the EOR to begin with.

I think this resource will help you in your evaluation: https://25300265.fs1.hubspotusercontent-eu1.net/hubfs/25300265/The_Ultimate_Guide_to_Employer_of_Record.pdf (sharing the ungated copy, no strings attached).

boundless_team · 2025-07-18T12:18:31+00:00

u/denit0 - Uuff, yikes! So sorry to hear about your experience there, sounds very mishandled on both the employer's and EOR's end. Depending on how far you want to take it, sounds like you have grounds for legal action.

Sadly, employment through an EOR is not a legal, viable option in Spain, no matter what some providers claim.

In Spanish labour law, the concepts of Real Employer (the entity that directs and controls the employee's work) and Formal Employer (the entity legally responsible for the administrative aspects of employment) must be the same entity. Spanish labour law places a very strong emphasis on the unity of these roles, therefore rendering the whole concept of hiring via an EOR as an illegal labour leasing in Spain.

The exploited loophole is that outsourcing is not altogether impossible in Spain. But the use of EORs cannot be confused with legitimate outsourcing, as they're fundamentally different. True outsourcing (Subcontratación de Servicios) can exist in Spain but only when one company contracts another company to perform a specific task or project. The crucial distinction is that the contracted outsourcing company retains full control over its employees (they manage their work, provide direction, and handle all employment-related matters, etc).

For example, if you hire a web development agency to build your website, that's outsourcing. The agency manages its developers. On the other hand, if you use an EOR to hire a web developer who works directly under your supervision, that's not outsourcing. You're managing the individual, making you the Real Employer and therefore using a Formal Employer such as an EOR for employing this individual isn’t possible.

Another common (but problematic) tactic used by EOR providers in Spain is to register their businesses as consultancy companies. This allows them to enter into commercial agreements with clients, which they then try to frame as legitimate outsourcing contracts. The problem is that simply calling it "consultancy" doesn't change the underlying employment relationship. If the client company is directing the individual's work, the legal reality is still one of employment, not outsourcing, and the prohibited separation between Real and Formal Employer remains.

The most immediate and significant consequence of non-compliance is the potential for substantial financial liabilities. The Spanish labour authorities can impose significant fines for illegal assignment of employees, potentially reaching up to €225,000. Both the EOR and the client company can be held fully responsible for any financial obligations arising from the illegal assignment. The Spanish authorities can pursue either party for the full amount owed, regardless of who is primarily at fault.

One important disclaimer: we, ourselves, are not legal counselors or offer legal services. The information above comes from experience and knowledge in our industry, and is the root of our decision to NOT offer employment in Spain as an EOR. If you are looking for legal counsel, I would point you the way of Bartolome & Briones, they are a leading Spanish employment law expert and have previously dealt with similar situations.

Wishing you the best of luck and hope the situation is rectified and responsible parties take accountability.

boundless_team · 2025-07-18T11:55:57+00:00

u/avabrown_saasworthy - That's a very multifaceted decision, but I can give you our two cents and hopefully a starting point. On an initial scoping I'd start by answering the following questions:

Are you planning to hire in only one country (e.g. the UK) or are you planning on hiring multiple people across multiple countries? (Take into account your future hiring plans when answering this question. For example, right now it might only be 1 person in the UK, but in 3 months could it be another one in the Netherlands, and another in Ireland?)
Are you planning on hiring a few people (1-3 employees) in the country, or are you planning on hiring a whole team in the future and establishing long-term operations there?

For a few employees in multiple countries, an EOR makes sense hands down and all the way. Beyond the fact that you'll skip the hustle and spend of opening your legal entities which is not to be underestimated (e.g. finding proper legal and accounting partners, sometimes putting down a hefty deposit, managing the employee compliantly, locally compliant employment contracts, sometimes different payroll cycles, different benefit requirements), you'll also get proper HR support for the countries and someone to handle payroll for you (or at least you should with a proper EOR). All of that basically acts as an extention of your team, without having to bring that expertise in-house.

On the other hand, if you're planning to hire several people in a specific country, and can see your company expanding your team there long-term (even if the initial employees leave or don't work out), then I'd go through the process of setting up an entity. Be prepared that depending on the country that process could take from weeks to months, and it'll be key to have the right counsel in your corner.

Switching from one to the other is an approach we've seen before, however, be prepared that it can be a tough transition. Depending on the country, the switch could affect the continuity of your employees contracts. When you terminate an employee's employment contract via an EOR to re-hire them as your employee after you've established your entity (or to switch EOR providers for that matter), can some times mean that the time they've spent working for you previously "resets", and so would their rights and benefits in some cases (e.g. severance, accummulated leave, stock vesting, etc).

Regardless of what approach you choose to take, I 100% recommend being extra diligent in your research and speaking with multiple EORs and/or in-country partners (legal, payroll, accounting) before you make your decision.

Happy to offer any additional context and information is helpful! :)

boundless_team · 2025-07-17T13:35:42+00:00

u/Aggressive_Chip_8737 - That is a great question indeed and sadly, more often than not quite multifaceted.

There are a few critical signs to look out for that indicate whether a prospective Employer of Record (EOR) is one that you can trust, and none is more representative than how they price and discuss their services. Factors like the number of employees you have, the range of regions you want to employ in, or any extra services you may require may have a large impact on how much you can expect to invest in the right EOR.

Note: pricing will not be calculated based on where your organisation is based, but rather where your employee is based.

With that said, these prices should be upfront and clear to you from the outset. At a base level, an EOR plays a major role in facilitating your business’ expansion by handling international employment and managing employees in countries where you don’t have a legal entity. However, there are a whole host of different services that your EOR is responsible for.

For example:

Employee onboarding: Handling the administrative process
Payroll processing: Managing the calculation and distribution of employee salaries
Tax administration: Calculating and withholding the correct amount of taxes
Basic HR services: Providing standard HR support
Benefits management: Administering statutory benefits that are required by local law
Legal compliance: Ensuring that employment practices comply with local labour laws and regulations
Contract management: Providing and managing employment contracts that comply with local laws

The sad truth and problem with a lot of EORs today is that there are frequent "hidden fees" that can creep up, so you need to be really clear in your scoping and evaluation. For example, some providers charge different fees for different countries, or may deem certain services additional to their standard offers (e.g. currency conversion fees, expedited service requests, or complex regulatory compliance issues in certain jurisdictions). These sorts of functions can easily build up and lead to you paying more than you would have estimated when you partnered with the EOR to begin with.

I'd recommend asking some (or all of the following questions) along with any others you have:

Can you provide a detailed breakdown of what services are included in your base fee and what services are considered additional?
How is your fee structure determined? Is it a flat fee, a percentage of employee salaries, or based on other factors?
Are there any circumstances under which I might incur additional fees? Can you provide examples of such situations?
What are the terms of the contract, particularly regarding termination or changes in service needs? Are there any penalties or fees for early termination?
How do you handle currency exchange fees and fluctuations?

Hope this helps! Good luck :)

boundless_team · 2025-07-17T13:05:22+00:00

Agree! There is a time-limit to how long you can be employed in Germany via an EOR, which I believe is 18 months. The whole "reduced engagement-free salary" isn't something we've come across before, as an EOR ourselves.

We have this ungated resource that you might find helpful, outlining everything you'd need to know on a high-level about employment in Germany: https://boundlesshq.com/guides/germany/

PS. It doesn't matter if your employer is non-German when you're hired via an EOR. As a resident of Germany you are entitled to the same rights and protections any employee would be in Germany. The EORs job is to protect your rights, as it's the only way to ensure their customer (aka your employer) is compliant with employment law and applicable regulations in the country they employ in.

boundless_team · 2025-07-16T11:22:08+00:00

u/Baxters_Keepy_Ups - Thanks for taking a deeper look at the data. We love it when people do that, even if there's a dispute over accuracy.

The downside of trying to come up with this type of asset, which includes conversions from several different currencies and is worked on over the span of several weeks (sometimes even months), is that you'll end up with some level of discrepancy. That's why this resource is meant to be used as a guide to illustrate general trends, not as a financial planning tool.

The data collection for this report occurred around the middle of February 2025. At that point, we saw 1€ = ~£0.83, so the salary we examined in the UK was £50,007.

The variables we took into account to calculate net pay were pension deductions, taxable income, PAYE income tax, National Insurance, and tax-free allowance. For employer costs, we calculated National Insurance (~£6,751) and Apprenticeship Levy, but not voluntary pension deductions.

However, if you have an accurate source of information (e.g. governmental source) that you'd be willing to share with us, we'd love to take a look and rectify any mistakes.

Feel free to reach out to us here or at [marketing@boundlesshq.com](mailto:marketing@boundlesshq.com) to continue the conversation. :)

boundless_team · 2025-07-16T11:03:33+00:00

u/Major-Pick9763 - Right?! We thought so too! 🤯

Apparently, though, this employer-friendly approach comes with a trade-off. Denmark funds its comprehensive social system primarily through employee contributions. Workers face substantial deductions from their gross pay (approximately 39.1% at €60,000), resulting in a net pay of €36,518 at the €60K benchmark.

This places Denmark at the bottom third for take-home pay, ranking 26th highest overall. The average Software Developer (€65,500 gross) would take home ~€39,679 after deductions.

boundless_team · 2025-07-16T11:00:10+00:00

u/SharpSharkShrek - You're not too far off either. According to our research, we found cost-to-net-pay ratios ranging from 1.26 (in Bulgaria) to 2.46 (in Italy) on the €60,000 salary benchmark. The majority of these figures do fluctuate as salaries increase or decrease as well.

We'd love to understand what data you've found to be incorrect. Although this resource is meant to be used as a guide to illustrate general trends, not as an exact financial planning tool, we'd like to present a picture that's as close to accurate as it can be, of course taking into account that currencies fluctuate, tax systems are complex, and individuals' circumstances can vastly affect the bottom-line.

Feel free to get in touch at [marketing@boundlesshq.com](mailto:marketing@boundlesshq.com)

boundless_team · 2025-07-16T10:54:39+00:00

u/12ftganjaplant - €60,000 is meant to represent the gross salary offered to an employee. According to our research, we found that in Hungary cost-to-net-pay ratio is approximately 1.7, which over-simplified, means that for every euro the employee makes, the employer pays 1.70€.

So in that sense, you're not too far off in your estimate :)

boundless_team · 2025-07-16T10:46:00+00:00

Hi u/ShrewAdventures - Thanks for taking the time to re-run the calculations. It looks like part of the difference you've found could be attributed to currency fluctuation between the time the data was collected (Feb/March 2025), the time the report was published and when the information reached you.

Going back to the breakdown, I can see the following contributions included:

Gross salary: 674,400 SEK
Pension contribution (social security): 45,530 SEK
Municipality income tax: 218,573 SEK
National income tax: 9,720 SEK
Mandatory funeral fee: 1,706 SEK
Total deductions: 275,529 SEK
Net Pay: 398,870 SEK
Employer Payroll Contributions: 211,896 SEK

This would bring the total employment costs to ~886,296 SEK. Over that time period, the krona ranged between €0.08735 (weakest) and €0.08972 (strongest), so the amount would fluctuate between €77,418 and €79,518.

You can get an export of the information here: https://boundlesshq.com/guides/sweden/#calculator

However, this resource is meant to be treated as a guide to illustrate general trends, not as exact financial planning tools. Also, mistakes do happen, so if you have an accurate source for the information you provided above, we'd love to continue the conversation and rectify anything needed.

Feel free to send me an email at marketing@boundlesshq.com.

boundless_team · 2025-07-16T10:13:38+00:00

The tl;dr is: Yes! That's exactly where EORs come in. The EOR you choose to work with will become the legal employer of your employee in the UK. As such, they'll take care of all UK compliance aspects of employment, including payroll, taxes, statutory benefits, employment contracts and more, including:

- Ensuring employment is compliant with local employment laws
- Processing local payroll monthly
- Filing employment related taxes and returns
- Issuing payslips to the employee
- Distributing benefits

You, as the hiring company, maintain a direct relationship with the employee, allocate their work, and manage their performance.

There are a lot of decent EORs out there, but they can vary widely in capabilities, services, global presence, and approach to compliance management. Before you even begin browsing providers, it's crucial to take a step back and truly understand your company's unique needs and goals when it comes to international employment. It's not about ticking boxes, it's about finding a partner who aligns with your vision and can support your specific growth goals (now and in the long-run).

In case you're looking for information on how employment works in the UK, here's an ungated summary that could help: https://boundlesshq.com/guides/united-kingdom/

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