EOR, AOR, and PEO differences

Choosing the right hiring model depends on who becomes the legal employer, where compliance responsibility sits, and whether you already have a local entity.

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EOR

Employer of Record

Best for

Hiring employees in countries where you don't have a local entity.

An Employer of Record becomes the worker's legal employer on paper. The EOR handles local employment compliance—such as payroll, taxes, statutory benefits, and locally required employment terms—while you manage the person's day-to-day work.

Key Points

EOR is the legal employer
Enables hiring without opening a local entity
Manages local payroll, tax filings, and statutory benefits
You retain work direction and performance

AOR

Agent of Record

Best for

When you need an authorized agent to manage a specific compliance or administrative scope.

An Agent of Record acts as an authorized representative for defined functions (for example, managing process and documentation, coordinating compliance steps, or administering payroll as an agent). In most structures, the AOR is not the legal employer—the legal employer may remain you or another party depending on how engagement is set up.

Key Points

Typically not the legal employer
Operates under a defined scope (acts as your agent)
Often used for contractor/staffing administration
Compliance responsibility depends on the structure

PEO

Professional Employer Organization

Best for

Companies with an existing local entity that want to outsource HR operations.

A Professional Employer Organization supports employment through a co-employment model (most commonly in the US). You keep your entity and maintain control of business operations and employment decisions, while the PEO helps administer payroll, HR processes, and often benefits.

Key Points

You have (or need) a local entity
Uses a co-employment model (jurisdiction-dependent)
PEO typically supports payroll, HR administration, and benefits
You remain responsible for day-to-day management

EOR

Employer of Record

Best for

Hiring employees in countries where you don't have a local entity.

An Employer of Record becomes the worker's legal employer on paper. The EOR handles local employment compliance—such as payroll, taxes, statutory benefits, and locally required employment terms—while you manage the person's day-to-day work.

Key Points

EOR is the legal employer

Enables hiring without opening a local entity

Manages local payroll, tax filings, and statutory benefits

You retain work direction and performance

AOR

Agent of Record

Best for

When you need an authorized agent to manage a specific compliance or administrative scope.

An Agent of Record acts as an authorized representative for defined functions (for example, managing process and documentation, coordinating compliance steps, or administering payroll as an agent). In most structures, the AOR is not the legal employer—the legal employer may remain you or another party depending on how engagement is set up.

Key Points

Typically not the legal employer

Operates under a defined scope (acts as your agent)

Often used for contractor/staffing administration

Compliance responsibility depends on the structure

PEO

Professional Employer Organization

Best for

Companies with an existing local entity that want to outsource HR operations.

A Professional Employer Organization supports employment through a co-employment model (most commonly in the US). You keep your entity and maintain control of business operations and employment decisions, while the PEO helps administer payroll, HR processes, and often benefits.

Key Points

You have (or need) a local entity

Uses a co-employment model (jurisdiction-dependent)

PEO typically supports payroll, HR administration, and benefits

You remain responsible for day-to-day management

Which one should you choose?

Choose EOR if you want to hire internationally without setting up a local entity.
Choose AOR if you need an authorized agent to manage a defined compliance or administrative scope.
Choose PEO if you already have a local entity and want HR/payroll/benefits support.

Quick Comparison

Service Type

EOR

Employer of Record

AOR

Agent of Record

PEO

Professional Employer Organization

Legal & Entity

Who is the legal employer?

The EOR

Usually you or another party (AOR is an agent)

You (with co-employment support)

Do you need a local entity?

No

Depends on the arrangement

Yes (typically)

Best For

International employee hiring without entity setup

Agent-led compliance/admin for a defined scope

HR/payroll/benefits support when you already have an entity

Hire with the right model

Whether you need an EOR, AOR, or PEO, we’ll help you choose the right setup for your team, your business, and risk tolerance.

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FAQ

What is the main difference between EOR, AOR, and PEO?

The biggest difference is who is the legal employer and how responsibilities are allocated.

EOR: the provider is the legal employer (commonly used when you don’t have a local entity).
PEO: co-employment support (commonly used when you do have a local entity).
AOR: an authorized agent for a defined scope; the legal employer depends on the engagement structure.

When should I use an EOR?

Use an EOR when you want to hire employees in a country where you don’t have a local entity, and you want the provider to manage local employment compliance (payroll, taxes, statutory benefits, employment documentation).

When should I use a PEO?

Use a PEO when you already have a local entity and want help managing HR administration, payroll processes, and often benefits—typically through a co-employment model (jurisdiction-dependent).

When should I use an AOR?

Use an AOR when you need an authorized agent to manage a specific administrative/compliance scope (for example, documentation workflows, coordination with local partners, or program administration). AOR responsibilities vary based on the contract and jurisdiction.

Do I need a local entity for these options?

EOR: typically no. 

PEO: typically yes. 

AOR: depends on how your engagement is structured and what the AOR covers.

Who manages payroll and taxes?

EOR: usually managed by the EOR as the legal employer 

PEO: typically administered by the PEO, with responsibilities shared 

AOR: may administer payroll as an agent depending on scope; the legal employer remains accountable for statutory obligations unless contractually transferred where permitted

Who is responsible for compliance and employment risk?

Responsibility depends on the model and what each party controls. 

EOR: provider holds employer-of-record obligations; you retain day-to-day management responsibilities 
PEO: shared responsibilities; you remain responsible for business operations and employment decisions 
AOR: limited to the defined agency scope; core employer liability usually remains with the legal employer

How quickly can we get started?

Timelines vary by country and worker type. In general, EOR and AOR setups can start quickly once worker details and required documentation are available; PEO timing often depends on entity readiness and benefits enrollment.

What information do you need to recommend the right option?

Usually: countries, employee vs contractor, start date, headcount, whether you have a local entity, and any needs around benefits, equity, or data/security requirements.