Decision · EOR or entityEOR vs your own entity: the break-even
An Employer of Record costs $2,388 (RemoFirst) to $8,388 (Oyster, Remote) in fees per employee per year. Five employees in Germany at $75,000 through Deel cost $35,940 a year in fees, $107,820 over three years; the 22.3% statutory charges (about $83,500 a year for the five) are owed either way. An entity removes the fee line and nothing else. Enter your adviser's entity quote to see where the lines cross; in Germany the 18-month staff-leasing limit forces the question anyway.
Prices checked 2 Sept 2026 · updated 2026-09-05 · methodology
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Threshold instrument
EOR fees over the years against the entity quote you have.
$107,820fees over 3 years · 5 employees
- Fee
- from $599 / employee / mo
- Per year
- $35,940
- Set-up
- none: the provider's entity
Checked 2026-09-02
Get a Deel quoteEnter your quoteset-up and yearly running cost above
- Set-up
- —
- Per year
- —
- Employer
- you, with local payroll
Set-up and running costs are not published by any authority as a single figure; they depend on the adviser, the city and the payroll provider. Enter the quote you have.
| Cumulative, 5 employees in Germany | EOR fees | Entity | Statutory charges (either way) |
|---|---|---|---|
| Year 1 | $35,940 | — | $83,438 |
| Year 2 | $71,880 | — | $166,875 |
| Year 3 | $107,820 | — | $250,313 |
| Year 4 | $143,760 | — | $333,750 |
| Year 5 | $179,700 | — | $417,188 |
| Break-even headcount over 3 years | enter the entity costs to see where the lines cross | ||
Statutory employer charges ($83,438 a year here, +22.3%) are owed whichever route you take; the fee is the only line an entity removes.
Employer charges from official sources for the country chosen; provider fees are the prices printed on their pricing pages on the dates shown; deposits, FX margins and add-ons are not included. Not legal or tax advice. Methodology
Verdict by situation
Not a winner for everyone: the case for each route.
- Choose an EOR if
- you have fewer people than the break-even headcount, you are testing the market, or you want to be able to stop within a month: the fee ($199 to $699 per employee per month) is the whole cost of not having an entity, and providers that state their terms let you leave without an annual contract (RemoFirst, Playroll, Remote).
- Open your own entity if
- your yearly EOR fees exceed the entity's set-up spread over your horizon plus its running costs, you need the entity for other reasons (contracts, tax, licences), or the law caps the EOR route, as Germany's 18-month staff-leasing limit does: then the fee is money you can stop paying.
Yearly EOR fees to beat, by headcount, at the cheapest and the Deel price.
Fees only, at published monthly rates × 12 × headcount. Your entity quote goes into the instrument above.
| Headcount | RemoFirst fees / yr ($199/mo) | Deel fees / yr ($599/mo) | Highest listed fee / yr ($699/mo) |
|---|---|---|---|
| 1 | $2,388 | $7,188 | $8,388 |
| 3 | $7,164 | $21,564 | $25,164 |
| 5 | $11,940 | $35,940 | $41,940 |
| 10 | $23,880 | $71,880 | $83,880 |
| 20 | $47,760 | $143,760 | $167,760 |
An entity pays off when its set-up spread over the horizon plus its yearly running cost is below the fees line for your headcount. Statutory employer charges are owed either way and are not in this table.
What the entity route involves, country by country
Onboarding through an EOR against the registrations an entity needs.
| Country | EOR onboarding | Employer on-cost | The entity route, as researched on the country page |
|---|---|---|---|
| IN India | 1–3 days | +5.6% | For one to five employees, an EOR is generally faster and can be cheaper than setting up an entity in India. A private limited entity through the SPICe+ process becomes worth comparing when headcount is expected to grow substantially over several years or the business needs direct GST, import-export registration, and full payroll control. Incorporation timelines and costs vary and no single official source checked established a national benchmark, so this is qualitative decision guidance rather than a quoted threshold. |
| PH Philippines | 2 days | +14.3% | A Philippine subsidiary means SEC incorporation, then BIR, SSS, PhilHealth, Pag-IBIG and DOLE registrations, a regional minimum wage set by the region where the entity sits, and bi-monthly payroll. Statutory employer charges are low and capped, so the entity question is about time and compliance rather than contributions: providers can onboard in days, and some add a liability or administration percentage on top of the fee (Deel lists 0.60%). Beyond roughly ten hires, or when the team needs PEZA incentives, a local entity starts to pay off. |
| CA Canada | 1 day | +8.1% | Opening a local entity in Canada or Ontario is fast and relatively inexpensive, but requires setting up local payroll registrations with the CRA, WSIB, and Ontario Ministry of Finance. For a small team, an EOR is significantly faster and removes ongoing statutory employer compliance burdens. |
| MX Mexico | 2–5 days | +29.8% | Opening a Mexican legal entity (S.A. de C.V.) plus employer registration with IMSS and INFONAVIT typically takes 3-6 months (Oyster: hiring via EOR takes "as little as 48 hours, without setting up a local entity that typically takes three to six months"; Deel cites 4-5 months for full incorporation), versus 2-5 business days through an EOR. Once headcount in Mexico is likely to stay above roughly 8-10 employees on a multi-year basis, the amortized cost of a local entity and in-country payroll provider usually undercuts per-employee EOR fees. |
| NL Netherlands | 2–4 days | +26.0% | An EOR is the simplest route for a first hire in the Netherlands. A Dutch BV needs no minimum share capital (from €0.01 since the 2012 Flex-BV reform) but requires a notarial deed and Chamber of Commerce (KVK) registration, with typical all-in incorporation costs of roughly €500–2,500 in notary and registration fees. Opening an entity is generally worth evaluating once headcount is sustained (several employees, ongoing local operations) rather than for a single opportunistic hire. |
| SG Singapore | 1–2 days | +17.2% | A Singapore Private Limited (Pte Ltd) starts to make more sense than an EOR once headcount, a local resident director you can appoint, or a need for local banking/IP ownership go beyond one or two hires. ACRA registration itself is fast and cheap by regional standards (a S$15 name-application fee plus a S$300 incorporation fee, with straightforward applications typically approved in 1-3 business days), but you still need a resident director, a company secretary and a registered office, so ongoing compliance overhead - not the setup step - is usually what tips the decision back toward an EOR for a first hire. |
| GB United Kingdom | 7 days | +16.4% | A UK limited company can be registered at Companies House in a day for a nominal fee; the real work is PAYE registration, a workplace pension scheme with automatic-enrolment duties, employers' liability insurance and monthly RTI filings. Two levers favour an entity once the team grows: an own company with a pay bill under GBP 3 million pays no Apprenticeship Levy, and it keeps the Employment Allowance for itself. For one to five hires, or a first UK employee before an office exists, the provider route is faster and carries the pension and HMRC administration. |
| IE Ireland | 1–2 days | +12.8% | An EOR can onboard an employee in Ireland in 1-2 business days, versus roughly 2 months to incorporate and register a local entity with the Companies Registration Office (CRO) per Deel's guide, so an entity is rarely worth it for a handful of hires. Opening a local entity typically only pays off once Irish headcount is large and durable enough (commonly cited around 5-10+ employees, an industry rule of thumb rather than an official threshold) to absorb payroll, tax and compliance overhead that EOR fees otherwise cover per employee. |
| DE Germany | 4 days | +22.3% | A German GmbH needs EUR 25,000 of share capital (half paid in), a notarised deed, commercial-register entry, and then registrations with a health fund, the pension insurer, the accident insurer and the tax office; count several weeks and a local payroll provider. The stronger argument for an entity is the leasing law: an EOR hire is a leased worker who must be moved after 18 months with the same client, and after nine months the equal-pay rule ties pay and conditions to your comparable staff. For a permanent German team the entity is the destination; the EOR is the bridge for the first year and for one-off hires. For scale, one provider prints its own estimate: Deel's Germany guide (read 19 September 2026) puts a German entity at EUR 61,446 in one-off costs and EUR 45,187 a year, against an EOR service fee of EUR 6,250 per employee per year. That is a provider's sales figure, not an official or independently checked cost; ask your adviser for a written quote. |
| AU Australia | 2 days | +18.0% | An Australian proprietary company registers with ASIC in a day, but employing means an ABN, PAYG withholding registration, a superannuation clearing house or Payday Super setup, a workers compensation policy in each state where staff sit, and payroll tax registration in any state where grouped wages pass the threshold. A small subsidiary with under AUD 1.2 million of NSW wages pays no payroll tax at all, which is the biggest cost difference against an EOR quote. Below roughly 8 to 10 hires the provider route is faster and keeps the multi-state compliance on their side; above that, the payroll-tax saving alone can fund the entity. |
| ES Spain | 4 days | +32.2% | Below roughly 5-10 employees, or for a first hire testing the Spanish market, an EOR is almost always cheaper and faster than incorporating. A Sociedad Limitada (SL) now needs as little as EUR 1 in share capital (Ley 18/2022 reform, down from EUR 3,000) but still takes several weeks for notary, Registro Mercantil, NIF and Seguridad Social employer registration, plus ongoing local payroll/accounting overhead — worth it once headcount, local benefits customization, or long-term commitment make the EOR per-employee fee less economical than running your own entity. |
| IT Italy | 3 days | +37.4% | An Italian S.r.l. needs a notarial deed, share capital, INPS and INAIL registrations, a chosen collective agreement and a licensed payroll professional (consulente del lavoro) before the first payslip. Employer charges then depend on the entity's own sector code and headcount, so a small subsidiary with 5 or fewer staff would pay slightly less FIS and no CIGS. Some providers bill one-off onboarding items in Italy, such as the mandatory pre-hire medical check and safety training, and charge extra for Quadro and Dirigente grades (supplementary health and pension funds). For a first hire or a team under ten, an EOR is faster and avoids running Italian payroll compliance in-house. |
| PL Poland | 5 days | +21.0% | A Polish sp. z o.o. can be registered online in days with PLN 5,000 of share capital, but the running cost is the payroll apparatus: ZUS and tax-office registrations, a licensed payroll provider, monthly ZUS DRA filings, PPK administration, and the PFRON levy once the entity reaches 25 full-time equivalents. A brand-new entity with fewer than 10 insured people pays the flat 1.67% accident rate rather than 0.67%. Providers hiring remotely in Poland also bill a pre-employment medical check and a monthly remote-work allowance the Labour Code requires for home-based staff; ask for both figures with the quote. For one to ten hires the EOR route is faster and keeps the PFRON and PPK mechanics on the provider's side. |
What the instrument compares, and what it does not
The Employer of Record side is fully published: the provider’s fee per employee per month, times headcount, times years. The entity side is yours: no authority prints the cost of running a foreign company, so the instrument takes your adviser’s set-up and yearly figures and puts them next to the fees. Statutory employer charges appear in a separate column because they are paid on both routes and cancel out of the decision.
The fees to beat
At the cheapest published fee (RemoFirst, $199) an entity must run for under $2,388 a year per employee to win; at Deel’s $599 the bar is $7,188; at Oyster’s or Remote’s $699 it is $8,388. Ten employees through Deel cost $71,880 a year in fees. The headcount table shows these lines at 1, 3, 5, 10 and 20 people; the year-by-year table in the instrument shows when the cumulative fees pass the entity’s set-up.
Beyond the arithmetic
Three things push the decision before the numbers do. Speed: the country pages record EOR onboarding of one to seven days, while an entity needs registrations with several authorities before the first payslip. Exit: providers that state their terms (RemoFirst, Playroll, Remote) let you stop within a month; an entity is wound down, not cancelled. Law: Germany caps the staff-leasing model at 18 months per client, so a German EOR is a bridge by construction. Read the entity notes in the country table before you trust a break-even alone.
Get the EOR quote before you pay for an entity.
Ask for the fee at your headcount, the exit terms and the deposit; put them next to your adviser's entity quote in the instrument above.
Disclosure Some provider links are affiliate links; they never change the numbers on this page. Details
Questions people ask before booking a demo
- At what headcount does an entity become cheaper than an EOR?
- When the entity's yearly cost (set-up divided by your horizon, plus running costs) is below your yearly EOR fees: $2,388 per employee at RemoFirst, $7,188 at Deel, $8,388 at Oyster or Remote. If your adviser quotes $30,000 a year all-in to run a German GmbH, the break-even is 13 employees at RemoFirst's fee, 5 at Deel's and 4 at Remote's. The instrument computes it for your numbers.
- Does an entity save the statutory employer charges?
- No. Pension, health, unemployment and accident contributions are owed by whoever employs the person, at the same rates: +22.3% in Germany, +12.8% in Ireland, +37.4% in Italy at the example salaries. The country pages list each line with its official source. The fee is the only line an entity removes.
- How long can an EOR employ someone in Germany?
- German staff-leasing law (AÜG) limits the assignment of a leased employee to the same client to 18 months unless a collective agreement provides otherwise, and an EOR in Germany is a licensed staff-leasing company. Plan the entity, or a change of set-up, before month 18.
- How much does it cost to set up a foreign entity?
- No authority publishes it as one figure: it is the sum of incorporation, share capital where required, registrations, a registered office, local payroll and accounting, and it varies by adviser and city. This site does not estimate it. The country table describes what each entity route involves; ask an adviser for a written yearly figure and enter it above.