PEO vs EOR: What's the Difference?

PEO and EOR are often confused, especially by companies hiring across state lines or internationally. Both models can support employment administration, but they are designed for different situations.

A PEO, or Professional Employer Organization, typically supports companies that already have their own legal employer entity. Under a co-employment relationship, the PEO helps administer payroll, benefits, HR support, compliance resources, and workers' compensation.

An EOR, or Employer of Record, becomes the legal employer for workers in a location where your company may not have its own entity. EORs are commonly used for international hiring or situations where a company wants to employ someone in a country or region without setting up a local entity.

A PEO may be the right fit if:

• You have employees in the United States
• You have or will maintain your own legal entity
• You want payroll, benefits, HR, and compliance support
• You are scaling your workforce domestically

An EOR may be the right fit if:

• You want to hire in a country where you do not have an entity
• You need a fast international hiring solution
• You are testing a new market
• You are not ready to establish a local subsidiary

The simplest way to think about it: a PEO helps support your existing employment infrastructure. An EOR can help employ workers where you do not have infrastructure yet.