EOR fees, line by line
EOR pricing looks simple at first—$49 or $99 per employee per month. But the real cost includes platform fees, per-payout charges, foreign exchange markups, payment delays, and hidden administrative costs. For contractors (not employees), these fees are completely unnecessary. Here's exactly what you're paying for and how it compares to direct contractor management.
The fee breakdown
1. Platform fee (per-seat)
Typical cost: $49-99 per person per month
This is the base fee for using the EOR platform. It covers payroll processing, benefits administration, compliance monitoring, and platform access. For employees, this makes sense. For contractors, you're paying for services you don't need.
Example: 10 contractors × $49/month = $490/month = $5,880/year
2. Per-payout fees
Typical cost: $3-10 per payment
Some EORs charge per payment on top of the monthly platform fee. If you pay contractors twice a month (milestone + final payment), that's 2 fees per contractor per month.
Example: 10 contractors × 2 payments/month × $5/payment = $100/month = $1,200/year
3. Foreign exchange (FX) markup
Typical cost: 1-3% above mid-market rate
EORs convert your USD/EUR into local currency for payouts. They typically charge 1-3% above the mid-market exchange rate. This is hidden in the conversion—you won't see it as a line item.
Example: $50,000/month in contractor payments × 2% FX markup = $1,000/month = $12,000/year
4. Payment delays (opportunity cost)
Typical delay: 3-5 business days
Your money sits in the EOR's account for 3-5 days before reaching your contractor. If you're paying $50k/month in contractor costs, that's $50k tied up in float. At 5% annual interest, that's $208/month in opportunity cost.
Compare to Wise: Payments arrive in 1-2 days, sometimes same-day.
5. Setup and termination fees
Typical cost: $500-2,000 per country (one-time)
Some EORs charge setup fees per country or per employee. Termination fees can apply if you leave before a minimum commitment period (usually 12 months).
Example: $1,000 setup fee for 3 countries = $3,000 upfront
6. Administrative overhead
Hidden cost: 2-5 hours per month
You still need to approve invoices, review payroll, answer contractor questions, and coordinate with the EOR support team. This takes time—usually 2-5 hours per month for a team of 10 contractors.
Example: 3 hours/month × $100/hour = $300/month = $3,600/year
Total cost example: 10 contractors
Let's calculate the real cost of managing 10 contractors through an EOR vs direct management:
| Cost Type | EOR (Deel/Remote) | Kontrable + Wise |
|---|---|---|
| Platform fee | $490/mo ($49 × 10) | $99/mo (flat) |
| Per-payout fees | $100/mo ($5 × 20) | $0 |
| FX markup (2%) | $1,000/mo | $75/mo (0.5% Wise) |
| Payment delays | $208/mo (opportunity cost) | $0 (1-2 day transfers) |
| Admin time | $300/mo (3 hrs) | $100/mo (1 hr) |
| Total monthly | $2,098 | $274 |
| Annual savings | $21,888/year |
Bottom line: For 10 contractors paying $50k/month total, you save $1,824/month ($21,888/year) by using direct contractor management instead of an EOR.
What you're actually paying for
EORs provide valuable services—for employees. Here's what you get with an EOR vs what you need for contractors:
EOR services (for employees)
- • Payroll processing with tax withholding
- • Benefits administration (health, pension)
- • Employment contracts and compliance
- • Local entity representation
- • Statutory employer contributions
- • Termination and severance handling
Contractor needs (what you actually need)
- • Contractor agreements (not employment contracts)
- • Milestone and invoice tracking
- • Payment recording and proof
- • Document storage (W-9, W-8BEN)
- • 1099 generation (U.S. only)
- • Audit trail for accounting
If you're working with true independent contractors, you don't need payroll, benefits, or local entity services. You just need to organize contracts, track work, and record payments. That's what Kontrable does—for $99/month instead of $2,000+/month.
Hidden costs to watch for
Minimum commitments: Some EORs require 12-month contracts. If you leave early, you pay termination fees or forfeit prepaid amounts.
Per-country setup: Adding a new country can cost $500-2,000 in setup fees, even if you're only hiring one person there.
Currency conversion timing: EORs lock in FX rates when you fund the payment, not when it's sent. If rates move against you, you pay more.
Support tiers: Basic support is included, but priority support, dedicated account managers, and custom integrations cost extra.
Common questions
Why do EORs charge per-seat fees for contractors?
Most EORs are built for employees, not contractors. They charge per-seat because they're providing payroll infrastructure, benefits administration, and compliance services. But if you're working with true contractors, you don't need those services—you're just paying invoices.
What are 'local employer costs' in EOR pricing?
These are mandatory employer contributions like social security, health insurance, pension, and other statutory benefits required by local law. These only apply to employees, not contractors. If you're hiring contractors, you shouldn't be paying these costs.
Can I negotiate EOR fees?
Sometimes, especially at higher volumes (50+ employees). But for small teams (5-25 people), you're usually stuck with standard pricing. That's why direct contractor management can save so much—you're not negotiating, you're just using a different model.
Are there setup fees for EORs?
Some EORs charge $500-2,000 per country for setup. Others include it in the monthly fee. Always ask about setup costs, termination fees, and minimum commitments before signing.
Calculate your savings
Want to see exactly how much you'd save by switching from an EOR to direct contractor management? Use our cost calculator:
Quick calculation formula
Current EOR cost: (Number of contractors × $49) + (Payments per month × $5) + (Monthly payout total × 2%)
Kontrable cost: $99 + (Monthly payout total × 0.5% Wise fee)
Monthly savings: Current EOR cost - Kontrable cost