Picture this: You're hiring a top-tier international employee, and everything seems to be going smoothly. But then — bam!
You get hit with a USD 6,000 offboarding fee when the employee leaves. Maybe you also paid a USD 1,000 setup fee just to get them onboarded.
Sounds ridiculous? Unfortunately, these hidden costs are all too common in the Employer of Record (EOR) industry.
Some EOR providers claim "no hidden fees" but still sneak them into the fine print. Others simply avoid discussing them upfront.
Many businesses have found this out the hard way, only learning about these surprise costs after committing to an EOR service provider to assist in their global expansion.
At RemoFirst, transparency is at the core of what we do. Our mission is to make global employment cost-effective and straightforward, ensuring companies can access great talent anywhere in the world without financial surprises.
Let's take a closer look at the hidden fees in EOR pricing that many providers won't tell you about — and the steps you can take to protect your business.
Key Takeaways:
- Hidden fees are prevalent in the EOR industry: Many providers claim flat-rate pricing but include surprise charges for setup, termination, compliance, and more.
- Understanding your EOR contract is critical: Vague terms like "additional administrative charges may apply" can lead to unexpected costs.
- Transparency matters: Choosing an EOR with upfront, transparent pricing, like RemoFirst, helps companies avoid unnecessary financial strain.
8 Hidden Fees EORs Won't Tell You About
While some providers claim to offer a simple, flat fee, the reality is that they often stack hidden charges along the way.
These fees can quickly inflate the cost of global employment, catching companies off guard and leading to the hassle of unexpected expenses.
Here are some of the most common hidden EOR fees that many businesses don't realize they're signing up for:
1. Setup Fees
Want to onboard a new hire? Some EORs charge a setup fee per hire, ranging from a few hundred to over a thousand dollars, to even start the employment process.
This is essentially a pay-to-play fee, meaning you're charged simply for the privilege of using their Employer of Record services.
What's worse, some providers don't communicate these fees upfront, making them an unwelcome surprise after you've already committed to the platform. Over time, these costs add up, especially for companies planning significant global hiring.
2. Termination Fees
Offboarding is another spot where EORs love to sneak in hidden fees. A company we recently talked with that was looking to switch EOR vendors was going to be charged USD 6,000 in termination fees of employees!
Given that employment changes are inevitable in any business, these fees create an unfair penalty. We think that whether an employee resigns or needs to be let go, offboarding should be a seamless, predictable process — not an opportunity for an EOR partner to charge exorbitant fees.
3. Compliance Fees
Negating compliance risks with local labor laws is essential — but some providers treat it as an add-on service rather than a core part of their offering. This means businesses pay extra for something they may have assumed was included in the standard package.
In some cases, EORs charge per compliance-related action, such as document verification, employment contract modifications, or regulatory filings. These incremental charges create an unpredictable cost structure and make it difficult for companies to budget accurately.
4. Benefits Administration Fees
Want to offer your employees healthcare, retirement plans, or other employee benefits? Many EORs charge separate administration fees on top of the actual cost of benefits themselves.
That means you're not just paying for the benefits package; you're also paying the EOR an extra fee to handle the paperwork.
These fees can be incredibly frustrating for companies that assume benefits management was already baked into the standard EOR service.
5. Currency Conversion or Wire Transfer Fees
International payroll involves currency exchanges and transfer fees, which some EORs mark up significantly. While a small percentage may seem negligible, these costs add up over time, especially for companies with employees in multiple countries.
Some EORs even charge different rates for different payment methods, making tracking the actual payroll cost difficult. Without transparency in exchange rates and transfer fees, businesses can spend thousands more than they budgeted.
6. Offboarding Fees
Beyond termination fees, some EOR providers sneak in additional offboarding costs, covering everything from final payroll processing to document handovers.
These administrative fees sometimes come as a surprise the first time a company needs to offboard an employee, adding unexpected costs to the process.
A transparent EOR should include offboarding as part of its core service, ensuring companies can make employment transitions smoothly and without financial penalties.
7. Platform Admin Seat Fees
Do you want multiple in-house human resources or finance team members to access the EOR platform? Some providers charge extra for additional admin seats.
This means companies must pay for members of their own internal teams to manage payroll, compliance, or reporting functions within the platform.
These fees create an unnecessary barrier to collaboration and increase costs for businesses that need multiple stakeholders involved in employee management.
8. Fees on Bonuses, Commissions, and Expense Reimbursements
Do you think you can easily pay employees bonuses, commissions, or reimburse expenses?
Not so fast.
Some EORs charge a percentage-based fee on these payments, meaning that every extra dollar you pay your employees also adds to their bottom line — and subtracts from yours.
At RemoFirst, we believe in full transparency. The only additional cost a client could incur is if information is submitted late and needs to be processed within the payroll cycle. Otherwise, what you see is what you get.
We keep pricing simple and straightforward — so you can focus on growing your business, not worrying about extra fees.
How to Avoid Hidden EOR Costs
The key to avoiding unexpected fees? Transparency. Everything should be clearly spelled out before you sign any contract. Here's how you can protect yourself from hidden costs:
Ask About All Fees Upfront
During your EOR demo, ask specific questions such as:
- Are there any setup or onboarding fees per employee?
- Do you charge for terminating an employee?
- Are compliance and benefits administration included, or are they separate?
- How do you handle currency conversions and international payroll transfers?
- Are there any fees for bonuses, commissions, or reimbursements?
- Do you charge for additional admin seats on your platform?
Read the Fine Print
Employer of record agreements can be lengthy, but take the time to review all the costs outlined in the contract.
Here are a few vague terms you might find in contracts that can be a sign of hidden fees:
- "Additional administrative charges may apply" – This phrase is intentionally broad and could encompass a range of unexpected fees, from payroll processing to compliance documentation.
- "Subject to change" – This wording allows the provider to increase prices or introduce new fees without prior notice, leaving businesses vulnerable to cost fluctuations.
- "As needed" or "On a case-by-case basis" – This suggests that certain services (such as compliance audits or tax filings) may incur additional, unpredictable fees.
- "Local employer obligations" – Legal compliance with local employment laws is essential, but some EORs use this term to justify passing unexpected costs onto clients without detailing what those obligations include.
- "Governmental or regulatory fees" – Some providers use this term to charge for mandatory employer contributions, tax filings, or social security payments, even though it would be reasonable to expect these fees to be accounted for in their pricing model.
- "Processing fees" – This can apply to various aspects of payroll, benefits administration, or even employee reimbursements, often leading to hidden markups.
- "Customization or special requests" – If an EOR offers "custom" solutions, be sure to ask what falls under this category. Otherwise, you may be charged for routine services that you might assume are included.
- "Compliance support" – Some EORs charge extra to ensure compliance with local labor laws, even though this is one of the main reasons companies use an EOR in the first place.
- "End-of-contract fees" – Termination fees may be buried under vague wording, requiring companies to pay unexpected costs when ending an employment arrangement.
- "Premium support" – Some EORs charge extra for faster response times or more hands-on customer support despite advertising full-service assistance. That’s okay if they do, but those costs should be clearly spelled out!
Choose a Transparent EOR Provider
Some EORs operate with clear pricing, spelling out exactly what you'll pay before you sign. RemoFirst is one of them. We're built to be cost-efficient and upfront about every charge.
How RemoFirst Operates With Transparency
We make pricing simple and upfront:
- Flat, predictable pricing starting at USD 199 per employee per month, varying by country, but clearly communicated upfront in advance.
- No hidden fees — you'll know exactly what you're paying before you sign.
- Flexible pricing options to find common ground and lower costs whenever possible.
- Discounts for eligible startups, helping companies expand globally without financial strain.
- Optional additional services such as background checks, equipment provisioning, and health insurance benefits are available, but you’ll only incur costs if you choose to add them. And you’ll know what they are before making a commitment.
Employing global talent should be easy and cost-efficient. That's why we focus on radical transparency, so you can grow your business without worrying about hidden fees.
Ready to Employ Globally with Confidence?
We’ve got you. Like we said, at RemoFirst we are all about being upfront about costs so there are no “gotcha” moments when you look at your bill.
We believe in acting as your partner, not just a provider, and want to help you with your international hiring needs today and two years from now. Basically, we’re not looking to make a quick sale, we’re interested in building a long-term relationship as your EOR of choice.
Book a demo today and we’ll walk you through how RemoFirst can help you grow your global team without the frustrating unexpected costs.
