Employer of Record in the United States: what one employee really costs

Questions people ask before booking a demo

How much does an employer of record cost in the United States?

Two parts. The provider's fee, priced per provider in the table above, is not published by state. The employer charges do: in California at this page's example of US$120,000 they come to about 8.0% of gross, about US$9,612 a year or US$801 a month. That is Social Security 6.2% (US$7,440), Medicare 1.45% (US$1,740), federal unemployment at least US$147 including California's credit reduction for 2026 wages, state unemployment US$238 at the 3.4% new-employer rate, the training tax US$7 and at least US$39.60 of workers' compensation. Health insurance comes on top of both.

Is health insurance included in the US employer cost?

Not in the total, because no statute sets a premium. An employer with 50 or more full-time employees must offer affordable coverage or risk a payment under section 4980H: in 2026, US$3,340 a year per full-time employee (minus up to 30), or US$5,010 per employee who receives a premium tax credit. Remote, RemoFirst and Papaya describe health cover as mandatory for their US employees and Deel lists it as optional; none of them printed a premium when read on 24 September 2026. For this rule the employer is the common-law employer, not necessarily the one running payroll. Where the provider, as a staffing firm, is not the common-law employer, its plan counts as your offer only if its fee is higher for an employee who enrols, so ask how its fee changes with enrolment. As an order of magnitude, the KFF 2025 survey puts the employer's share of an average single-coverage premium near US$7,885 a year.

Which providers can employ in the US if my company has no US entity?

Each of the fourteen providers compared here sold a US Employer of Record when their US pages were read on 24 September 2026, with two limits worth knowing before a quote. Deel's US page says its policy permits only exempt (salaried) workers, so ask Deel whether the role qualifies before comparing its total. Atlas HXM employs only people who already hold US work authorization. Deel and Remote also sell a US PEO, which needs your own US entity.

Why does federal unemployment tax cost more for a California employee?

California owes the federal unemployment fund, so its employers lose part of the 5.4% FUTA credit, 0.3 point more each year the advance stays unpaid: 1.2% for 2025 wages, and at least 1.5% for 2026 wages, which takes federal unemployment tax from US$42 to at least US$147 per employee. The Department of Labor's table adds an estimated 3.8% add-on, US$413 in all, unless it is waived, as it was for 2025; the final figure is set after 10 November 2026.

Is a PEO cheaper than an EOR in the United States?

On fees, yes, but only once you own a US company. A PEO co-employs people already on your own entity's payroll: Deel prices it from US$125 and Remote from US$99 per employee per month, against Deel's Employer of Record from US$599 and Remote's at US$699. Without a US entity the PEO is not available, and the choice is between an EOR fee and the cost of incorporating and registering in each state where you hire. The statutory charges above are owed under all three routes, each employer at its own unemployment and workers' compensation rates.