The short answer
A US PEO if you’re hiring US employees. An EOR if you’re hiring anyone outside the United States.
The two products do different things in different legal jurisdictions, and you can’t substitute one for the other.
If you already have a US PEO like TriNet or Justworks, and someone just asked you to hire in Berlin, your existing PEO can’t make that hire. You need an EOR, also called a global PEO.
Safeguard Global pioneered the EOR category in 2009 and now serves 1,500+ organizations across 187 countries. Onboarding runs one to two weeks in most markets.
A US PEO cannot be the legal employer of a German worker, because German law requires a German legal employer with German registration, German payroll, and German employment contracts. The US PEO is not, and cannot become, that entity.
PEO vs EOR at a glance
| PEO | EOR (Global PEO) | |
| Where it works | United States only | 187 countries |
| Legal employer | The PEO, co-employer with you | The EOR, sole legal employer in-country |
| Time to hire | 1 to 2 weeks | 1 to 2 weeks |
| Setup cost | $0, per-employee fee only | $0, per-employee fee only |
| Ongoing cost | Per-employee fee plus a percentage of payroll | $400 to $700 per employee per month, typically around $599 |
| Compliance | PEO handles US compliance | EOR handles local compliance |
| Examples | ADP TotalSource, TriNet, Justworks, Insperity, Sequoia | Safeguard Global, Globalization Partners, Multiplier, Deel, Remote, Oyster, Justworks International |
A US PEO is a co-employment arrangement specific to US law. An EOR is the sole legal employer of your worker through its own legal entity in the country. Global PEO and EOR are interchangeable terms for the international product.
Which one do you actually need?
If you’re hiring outside the US and don’t have a local entity, you need an EOR. The only exception is 20 or more employees in a single country with a long-term commitment, in which case you start with the EOR and plan toward entity setup.
When NOT to use an EOR
This is the part most providers won’t tell you.
Don’t use an EOR if you’re hiring US employees. A PEO is the right tool. EORs can technically operate in the US, but the cost is higher and the structure is wrong for domestic hiring.
Don’t use an EOR if you already have an entity in the country. Run payroll yourself or through a local provider. The EOR fee buys you the legal employer relationship through their entity, and that’s value you don’t need once you have your own.
Don’t use an EOR at a scale of 20 or more employees in one country. Eventually the per-employee monthly fee crosses over the cost of running your own entity. The exact breakpoint depends on the country, but plan to evaluate entity setup once you’re around 20 people in one place.
Don’t use an EOR to “test” whether you should hire a contractor. An EOR is for employment, not contractor management. If someone is working full time on a contract basis, the real question is whether they should be employed, not whether you should run them through an EOR.
Don’t use an EOR if your “hire” is actually a vendor. An EOR is for employees. Vendors are vendors.
How much does each one cost?
| Factor | PEO | EOR | Entity Setup |
| Setup cost | $0 | $0 | $15,000 to $25,000 or more, Germany example |
| Monthly fee | Per-employee fee plus a percentage of payroll | $400 to $700 per employee, typically around $599 | None, you run it |
| Annual ongoing | Variable, based on payroll volume | $4,800 to $8,400 per employee | $20,000 to $40,000 in local accounting, payroll, and HR compliance |
| Time to first hire | 1 to 2 weeks | 1 to 2 weeks | 3 to 12 months |
| Compliance burden | Low, PEO handles US | Low, EOR handles local | Full, you’re the employer |
The break-even on entity versus EOR is roughly 20 employees in a single country, depending on the country.
Common mistakes
Mistake 1. Calling your PEO and asking about international hiring. Your PEO will hand you off to a partner. That partner is rarely the strongest option in the market, and you’re paying through a contractual middle layer. Better to start with an established EOR directly. Safeguard pioneered this category and works with companies that outgrew their US PEO’s international option.
Mistake 2. Hiring a contractor in another country because it’s faster. It’s faster until it isn’t. In Germany, misclassification can trigger retroactive liability for unpaid employer and employee social security contributions, generally going back up to four years, and up to 30 years in intentional cases, plus surcharges, fines, and possible criminal exposure. Combined statutory social security contributions run around 40 percent of wages, and in 2026 can exceed that before contribution ceilings and case-specific adjustments. The cost of doing it wrong is much higher than the cost of an EOR.
Mistake 3. Setting up an entity before you know whether you’re staying. Entity setup takes months and costs serious money. If you’re not certain you’ll have 20 or more employees in that country in two to three years, an EOR is the safer call.
Mistake 4. Assuming “Global PEO” means a US PEO with international features. It doesn’t. Global PEO is industry marketing for EOR. They’re the same legal product. If you’re being sold a Global PEO, ask who the legal employer is. The answer should be the provider, through their local entity.
Mistake 5. Comparing EOR providers on price alone. The legal substrate matters more. A provider with direct entities in your target country and 15 or more years of operating experience gives you fewer layers of accountability and more compliance muscle when something goes sideways. Pioneer-era providers have seen the edge cases newer entrants haven’t.
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